Musalem said Federal Reserve policy rates may be hindering progress toward the 2% inflation target, suggesting that raising rates now could prevent the need for more aggressive action later. The Federal Reserve’s target range is currently 3.50% to 3.75%. The remarks have shifted market expectations, with prediction-market pricing indicating a lower likelihood of imminent rate cuts and a possible delay to monetary easing. Investors will watch further comments from Federal Reserve officials, inflation and employment data, and upcoming FOMC (Federal Open Market Committee) meetings for signals on the policy path.