St. Louis Fed President Alberto Musalem stated that he judges it necessary to "soon" further tighten monetary policy. He outlined two inflation scenarios, with the one he considers more likely being: inflation will remain too high unless the Federal Reserve raises rates further. The second scenario, which he deems less likely but still possible, is: no further rate hikes are needed, potentially accompanied by falling energy prices, lower shipping costs, a sharp pullback in AI and data center spending, or a sudden tightening of financial conditions leading to a slowdown in consumer spending.