FILE PHOTO: St. Louis Federal Reserve Bank President Alberto Musalem chats on the sidelines of a monetary policy conference at Stanford University’s Hoover Institution in Palo Alto, California, U.S., May 9, 2025. REUTERS/Ann Saphir/File Photo

WASHINGTON (Reuters) -St. Louis Federal Reserve President Alberto Musalem said he was open to further interest rate cuts but the Fed must be cautious and keep rates high enough to continue to lean against inflation that remains roughly a percentage point above the central bank's 2% target.

"Monetary policy is now somewhere between modestly restrictive and neutral," Musalem, a voter on interest rate policy this year, said at Washington University in St. Louis. "I am open minded to future potential reductions in interest rates. I do believe we need to move cautiously because the room between now and the point where policy becomes overly accommodative is limited."