(Bloomberg) -- Federal Reserve Bank of St. Louis President Alberto Musalem suggested US interest-rate cuts could be delayed for some time, saying it’s more likely to take “quarters” not months to see data to support a reduction.

The Fed also needs to consider and explain to the public the possibility of alternative economic scenarios, Musalem said Tuesday in his first speech on monetary policy since taking the helm of the St. Louis Fed earlier this year. Additional rate hikes could be necessary if inflation progress stalls or reverses, he said. 

“I will need to observe a period of favorable inflation, moderating demand and expanding supply before becoming confident that a reduction in the target range for the federal funds rate is appropriate,” he said in remarks prepared for an event in St. Louis. “These conditions could take months, and more likely quarters to play out.”

Fed policymakers last week lowered their projections for rate cuts this year to one, from three estimated in March. They’ve cautioned they need to gain more confidence that inflation is slowing to their 2% target before starting to lower borrowing costs, especially after progress stalled earlier this year.

Musalem didn’t specify his forecast for rates, though his speech suggested he is among the officials that anticipate one or no cuts this year.

Continued Progress

Still, he cited “potential early signs of continued progress on inflation” including “a welcome downshift of inflation in May,” adding “it takes more than one data point to establish a trend.”

The new president also said recent reports have suggested some softening in the US economy. Data on real consumer spending and nominal retail sales that “mostly underwhelmed,” he said, and the May data so far “have been mixed.”

The Fed will be undergoing a review of its monetary policy framework starting late this year, and Musalem highlighted the need for central bankers to consider alternative scenarios for the economic outlook, rather than just the most likely outcome.

“Should evidence of alternative inflation scenarios begin to materialize, I would support an additional firming of monetary policy,” he said.

Musalem, the first Hispanic policymaker to lead a regional Fed bank, began his new role in April. His career included executive roles at Tudor Investment Corp. and the New York Fed.

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