St. Louis Federal Reserve (Fed) President Alberto Musalem claimed that inflation is almost a full percentage point above the Fed’s target, and the labor market is cooling in an orderly way, speaking before the Missouri Athletic Club Speaker Series on Wednesday.

Key takeaways:

Inflation is almost a full pct point above target, labor market cooling in an orderly way.

My baseline outlook is economy grows at or above 2%.

Financial conditions are accommodative, there is deregulation, and fiscal tailwinds.

I see unemployment stabilizing around 4.3% or 4.4%.

Half of excess inflation comes from tariffs, this will fade as year progresses.

Job market is vulnerable to an increase in layoffs, not my base case but it could happen.

Inflation could stay higher for longer, again this is not my baseline.

Policy is balancing appropriately.

Policy is neutral now in real terms.

Government shutdown may have biased CPI downward, and could stay that way through April; PCE inflation a better gauge.

Important to finish the job on inflation.

Bringing inflation down to target will help with consumption and growth, and could lower 10-year rate.

Looking forward to learning what Warsh's priorities might be.

I expect the Fed's commitment to its dual mandate to continue under a new chair.”