Federal Reserve official Moussalem stated on Friday that, given the inflation rate has persistently remained above the Fed's 2% target, he is reluctant to support further interest rate cuts.

Moussalem expressed his agreement with the Fed's decision this week to hold rates steady, believing that with the target rate in the 3.5% to 3.75% range, it is no longer high enough to significantly restrain the economy. He argued that persistent price increases should prevent the Fed from cutting rates to support the economy.

"Given that inflation is above our target and the risks to the economic outlook are roughly balanced, I believe it is not appropriate at this time to lower rates into accommodative territory," Moussalem said.

Moussalem also pointed out that attempting to ease labor market pressures by cutting the short-term rates controlled by the Fed could be counterproductive. He stated that such a move might spark concerns about future inflation and push up long-term rates, which are a key factor in determining mortgage costs and corporate borrowing costs.