Treasury market decline shows Fed must build inflation credibility, Musalem tells FT

July 31 — This week’s drop in U.S. Treasury prices signals that the Federal Reserve needs to strengthen its reputation on fighting inflation by raising interest rates, St. Louis Fed President Alberto Musalem told the Financial Times.

“Right now, smaller, gradual rate hikes sooner are better — they’re less expensive and less disruptive than waiting and then having to do bigger, sudden moves later,” Musalem said to the FT.

Musalem does not have a vote on the Federal Open Market Committee this year.