Alberto G. Musalem was named the new president of the St. Louis Federal Reserve, but he won’t get a chance to make a big mark on U.S. monetary policy until 2025.
Musalem was chosen after a five-month search following the resignation of former president James Bullard last summer. He begins his new job on April 2.
The new St. Louis Fed president won’t be a voting member this year of the rotating panel that sets U.S. interest rates. The St. Louis Fed takes its turn as a voting member in 2025.
Musalem, now an adjunct professor at Georgetown University, has a long resume.
He is a former top official at the New York Fed and co-founded Evince Asset Management in 2018. He also was global head of research at Tudor Investment Corp. and worked at the International Monetary Fund as an economist earlier in his career.
Musalem has extensive experience in U.S. and global financial markets, bringing an expertise lacking among many other senior Fed officials.
Born in Bogota, Colombia, Musalem emigrated to the U.S. when he was young. He holds degrees in economics from The University of Pennsylvania and the London School of Economics.
Bullard, Musalem’s predecessor at the St. Louis Fed, left last August to become dean of a new business school at Purdue University.
Bullard was a very outspoken president who was the first senior Fed official to warn about rising inflation in 2021. He constantly urged the central bank to raise interest rates aggressively, and eventually his approach was widely adopted by other senior officials.
The Fed is likely done raising interest rates given a big slowdown in the rate of inflation, with most economists predicting rate cuts later in the year as the economy softens.
The annual rate of inflation has decelerated to 3.1% from a 40-year peak of 9.1% in 2022, though it’s still shy of the Fed’s 2% target.
How close the Fed gets to its goal this year will determine how much it cuts interest rates.
A sharper-than-expected slowdown in the economy could also spur the central bank to reduce borrowing costs. Fed officials don’t want to keep rates so high as to cause a recession.
During the search for a new president, longtime St. Louis Fed executive Kathleen O’Neill has served in an interim role.
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