Footsteps of Interest Rate Cut Are Coming! Chicago Fed President Goolsbee Also Made a Statement


Footsteps of Interest Rate Cut Are Coming! Chicago Fed President Goolsbee Also Made a Statement

  en.bitcoinsistemi.com 15 July 2024 18:59, UTC

Chicago FED President Austan Goolsbee stated that he believes that the decrease in price pressures requires lowering interest rates, as supported by the moderate June inflation data announced last week.

Goolsbee expressed concerns that keeping interest rates steady could lead to an overly restrictive policy stance because the inflation-adjusted short-term interest rate rises each month that inflation falls.

Goolsbee described the latest inflation data as “excellent”, saying the figures provided the evidence the central bank needed to ensure it was on track to meet its 2% inflation target. However, he declined to give a specific timeline for the first rate cut.

Chicago FED President emphasized the importance of the recent slowdown in housing inflation, calling it “extremely encouraging.” It is monitoring this category closely to determine the appropriate timing for the central bank to reduce borrowing costs.

“The committee made a statement that we do not expect to reduce interest rates until we are more convinced that we are on the path to 2%,” Goolsbee said in a chat with reporters Thursday. “That’s what the path to 2% looks like in my view.” “

Goolsbee’s comments follow a report released early Thursday that showed a key gauge of consumer prices rose in June at the slowest pace since August 2021. The slowdown has been attributed in part to a long-awaited cooling in housing costs, a component that Goolsbee identified as crucial for the Fed to meet its inflation target.

After the announcement of data showing that inflation decreased in various categories, investors strengthened their predictions that the FED would cut interest rates at its September meeting. Policymakers are scheduled to meet on July 30-31.

Goolsbee, who will serve as an alternate member of the Federal Open Market Committee at the FED’s meeting at the end of this month, emphasized that by keeping interest rates unchanged, the central bank has effectively tightened its policy.

*This is not investment advice.

Leave a Reply

Your email address will not be published. Required fields are marked *

Back To Top