Chicago Fed president delivers verdict
In line with the majority view, Federal Reserve Bank of Chicago president Austan Goolsbee said he expects three interest rate cuts this year as officials grapple with balancing inflation and growth.
In a recent interview, Goolsbee aligned himself with the median projection from the Fed’s March policy meeting, stating, “I was at the median for this one.”
Ten policymakers foresee at least three cuts, while nine others anticipate two or fewer. While hesitant to predict the exact timing, Goolsbee highlighted the Fed’s dual mandate to manage inflation and maintain healthy employment levels.
“We’re in this murky period where we’ve got to strike a balance of the dual mandate,” he told Yahoo! Finance.
Last week, Fed officials left interest rates unchanged for the fifth consecutive time, emphasizing the need to monitor inflation to ensure it reaches their 2% target. Despite some recent upticks, Goolsbee believes the overall trend remains positive.
Read more: Fed hears raw reality of rate hike impacts across America
“It seems hard for me to view that the seven months previous to the start of this year were just random,” he said.
The declaration comes shortly after Federal Reserve chair Jerome Powell came under fire from business leaders last week amid rising rates and other economic headwinds.
The Fed raised rates rapidly starting in March 2022 to tackle decades-high inflation, lifting its benchmark rate to the current 5.25%-5.5% range where it has held steady since July.
While the central bank expects to cut rates later this year once inflation is under better control, many Americans are already feeling the impact. One executive at the event described as being in the midst of a “perfect storm”.
Stay updated with the freshest mortgage news. Get exclusive interviews, breaking news, and industry events in your inbox, and always be the first to know by subscribing to our FREE daily newsletter.
