Federal Reserve's Mussa Lam: U.S. fiscal deficit could become a financial stability issue

Federal Reserve's Mussa Al-Alam said that the U.S. fiscal deficit is on an unsustainable path and may become a financial stability issue in the future. The current economic situation is good, and the labor market is at or near full employment. There are still some upside risks to inflation, but monetary policy is currently moderately restrictive, and the financial environment is more conducive to economic growth. Some positive trends in inflation have been observed recently, but due to the impact of tariffs, the future inflation outlook is expected to rise. However, it is not yet certain whether tariffs will have a more lasting impact. High profit margins provide companies with room to absorb some of the tariff shock, and a weaker dollar may further push up inflation. Mussa Al-Alam pointed out that the specific impact of tariffs may not be fully apparent until later this year or early next year. (Golden Ten) [Odaily Planet Daily]