Federal Reserve official Mousailem indicated that interest rates might remain in the 3.50%-3.75% range due to inflation risks driven by high oil prices. He projected core inflation to be slightly below or around 3% by year-end, with potential for further increases. Mousailem emphasized that rising oil prices are impacting service-sector inflation and could necessitate rate hikes if inflation expectations rise. Mousailem also noted that the oil market has faced its third negative supply shock in a year, alongside higher tariffs and stricter immigration rules, which could slow economic growth to 1.5%-2%. These factors contribute to the Fed's cautious stance on interest rates, reflecting concerns over inflationary pressures and economic stability.