MNI BRIEF: Fed's Goolsbee Sees Rates Fair Bit Lower In A Year
MNI (CHICAGO) - U.S. interest rates are headed "a fair bit lower" by the end of next year, Federal Reserve Bank of Chicago President Austan Goolsbee repeated Friday, adding individual FOMC meetings may see close calls between cutting and not cutting.
"Over the next year if conditions evolve the way they have been and the way they that I expect them to, rates are going to be a fair bit lower than where they are today," he said, declining to "pre-judge" whether he would support a rate cut later this month.
"The inflation rate is almost to where we want it to stop. The unemployment rate is around where we think it's going to settle. Economic growth is around the trend where we think it's sustainable. And the one outlier is that the interest rate that we set is well above where the consensus in the dot plot says it's going to settle down."
The Fed has lowered its benchmark overnight rate 75 bps this year so far to a 4.5%-4.75% range and the median FOMC expectation for its longer run value is 2.9%. (See: MNI INTERVIEW: Three Fed Cuts Before Mid-2025 Pause - Giannoni)