Fed’s Musalem: Persistent Supply Shocks Risk Second-Round Effects

Musalem's framing matters because it treats supply shocks as a persistent inflation source rather than a transitory one, which keeps the bar for easing higher than markets sometimes assume. The distinction between supply-driven and demand-driven inflation is doing real work here: if officials see only part of price pressure as supply-related, the residual is the part policy is expected to address. For crypto and RWA markets, the practical channel is the rate path and dollar liquidity, not the inflation debate itself. Whether other Fed voices echo this emphasis is the open question.