Alberto Musalem said forward guidance is a strategic tool for the Federal Reserve when interest rates are near zero rather than a strict commitment to future policy. The Fed has held rates at 3.50%–3.75% since the beginning of 2026, while inflation remains above its 2% target. Musalem said the stable labor market, with unemployment around 4.2% in recent months, is not generating inflation pressure. He also described monetary policy as neutral or accommodative and financial conditions as quite easy. The Fed is focused on maintaining independence from fiscal policy, while strong growth and investment are influencing the bond market, and Musalem said the central bank’s credibility is not in question. Market pricing indicates a 59% probability of no rate change at the October 28 meeting, with investors watching inflation, labor data and comments from officials including Chair Kevin Warsh through October 2026.