A top official from the Federal Reserve, Alberto Musalem, has stated that the central bank should move towards gradual interest rate cuts following the recent larger-than-usual half-point reduction. Musalem expressed concern that a rapid easing of financial conditions could lead to a surge in demand and prolong the fight against inflation. While he acknowledged the cooling of the labour market, he remains optimistic about the overall economic outlook. However, he cautioned that if the economy weakens more than expected, a faster pace of rate cuts might be necessary. Musalem's comments echo those of other officials who have indicated a willingness to adjust the pace of rate cuts based on incoming economic data. The Fed's latest "dot plot" shows a majority of officials anticipate further rate cuts in the coming months.