Watch CNBC's full interview with St. Louis Fed President Alberto Musalem

Inflation Analysis - Inflation is running around 3%, approximately 1% higher than the Fed's 2% target [3][4] - Tariffs' impact on inflation is expected to fade in 2 to 3 quarters, but there's a reasonable possibility of persistence [5] - Companies closer to the importer are passing on almost everything, while those closer to the consumer are having difficulty passing through costs [29] - The impact of tariffs is being shared by exporters, importers, consumers, and intermediate goods [30] - So far, there has been a muted impact on core goods and services, with some higher services inflation [30] Labor Market Assessment - The labor market is seen as stable around full employment, with an unemployment rate at 42% [11] - There is slightly more than one vacancy for each person unemployed and looking for a job [12] - Demand for labor has declined, but so has the supply [13] - The break-even pace of employment is expected to be sub 50 thousand this year due to lower immigration flows [14] Monetary Policy Stance - The Fed has a dual mandate: price stability and full employment, requiring a balanced approach [6][7] - The speaker is weighing the fact that inflation is almost 1% above target against a labor market at full employment but with downside risks [8] - A 50 basis point cut is unsupported by the current state and outlook for the economy [33] - Central bank independence is very important for better economic outcomes [23][24]