The Fed's Musalem is speaking and says:Fed’s goals are in tensionInflation running high, labor market showing signs of potential weaknessBalanced approach on monetary policy only works if inflation expectations are anchoredLess able to respond to short-term labor market fluctuations if inflation expectations become unanchoredRight now inflation expectations a little elevated up to 2 years outLong-term inflation expectations are anchoredinflation materially above target.Labor market looks at full employment, could we getExpect tariff impact on inflation to fade by 2nd half of 2026.Only 10% of inflation we are seeing is tariffsExpects labor market. In some orderly wayprices to stop increasing due to tariffs after mid 2026. There are material risks around baseline expectations. Inflation could rise more, labor market could weaken more.Supported September rate cut as insurance against labor market weakening.Policy is between modestly restrictive and neutral.Financial conditions are accommodative.Open-minded on potential further rate cuts as further insurance.Believe we should tread with caution.Limited room for more easing before policy gets overly accommodative.Monetary policy should continue to lean against inflationExpects 4Q GDP to be healthyGDP growth is likely to be close to potential for the year. Data suggst all households are spending.Anecdotes shall low income households stretching to do soConsumer spending by some groups like Hispanics has softened.Cutting back on spending because of inflation, not from job market.Really important to achieve 2% inflation goal.Overall, he’s more dovish than hawkish—willing to cut rates to protect the labor market—but his caution on inflation means he’s not strongly dovish. He’s positioning himself as a measured dove rather than an aggressive one. This article was written by Greg Michalowski at investinglive.com.