MNI BRIEF: Fed's Goolsbee Sees Rates Near Peak

U.S. interest rates are near their peak and soon the debate will shift to how long they'll stay there, Federal Reserve Bank of Chicago President Austan Goolsbee said Monday.

"It's certainly possible" rates won't need to go any higher, he said. "Pretty soon the question is going to stop being how much more are they going to raise and it's going to transform into how long do we need to hold rates at this kind of restricted level to feel convinced that we're back on this path to 2%."

The FOMC last week opted to wait for more data before deciding whether a last quarter-point increase in the cycle might be needed to tame inflation. A majority of officials saw rates ending the year slightly higher at 5.5%-5.75% and just 50 bps of rate cuts next year. (See: MNI FED WATCH: Proceeding Carefully To Peak Rates)

"We'rejustgoingtohavetoplaybyearhowmuchisstillcomingdownthepikeversushowmuchwasexpectedandwasalreadyinthere. But Ithinkwe'regettingclosetothisspotwhereit'sgoingtobemoreaboutthehowlongweholdratherthanhow high we go." Fed officials expect to keep rates at peak "a little longer" than markets expect, Goolsbee added, noting the September dot plot shows rates "holding well into next year."