Internet reports that Federal Reserve official Musalem expressed doubts about further interest rate cuts, contrary to the general expectation in financial markets that the Federal Reserve will continue to reduce borrowing costs this year. Musalem said he supported a 25 basis point rate cut last week because he believed risks to the labor market had increased. But with inflation nearly a percentage point above the Fed's 2% target, further interest cuts could mean excessive complacency about rising prices. "If the public starts to doubt whether inflation can return to the 2% target, the job of restoring price stability will become more difficult and could cost the economy higher." Traders 'bets suggest the Fed will cut interest rates by another 50 basis points at its remaining two meetings this year. In addition, his views also contradict those of Milan, the new governor of the Federal Reserve. Milan opposed a small rate cut at last week's meeting and advocated a larger rate cut.