Fed’s Musalem says a rate hike is needed ‘soon’

By Michael S. Derby Oct 30 (Reuters) St. Louis Federal Reserve President Alberto Musalem said on Friday he sees an imminent need to raise interest rates to deal with ongoing high levels of inflation. I ​judge that additional firming of monetary policy will be necessary, and ‌soon, Musalem said in the text of a speech to be presented at an event held by the Shadow Open Market Committee, a group that takes stock of Fed actions and policies. Incremental adjustments made earlier are usually less disruptive than larger and abrupt actions taken ‌later, ​he said, adding that moving sooner in smaller steps ⁠while inflation expectations are anchored ⁠has a better chance of succeeding without adverse impact on the labor market or economic growth. Musalem said that inflation remains too high relative to the 2% target with ongoing risks to the upside, and added that it ​was unlikely to ease absent Fed action. He noted that monetary policy is not in a position to lower inflation at the curr