Fed right to cut rates to support job market, Musalem says

By Michael S. Derby

NEW YORK (Reuters) -Federal Reserve Bank of St. Louis President Alberto Musalem said on Thursday the U.S. central bank has been right to cut interest rates to help the job market.

The cuts have been “appropriate” but “we have to be very careful to continue to lean against above-target inflation, while continuing to provide some insurance” to the employment sector, he said at a gathering of the Fixed Income Analysts Society in New York.

“Monetary policy is somewhere between modestly restrictive and neutral, and it’s getting close to neutral in terms of financial conditions,” Musalem said.

His assessment that financial conditions are helping the economy is based on a broad-based read on markets and credit availability, Musalem said. These conditions “are rather suppor