Federal Reserve Officials Discuss Rate Cuts

Federal Reserve Chair Jerome Powell has indicated that more interest rate cuts are likely in the near future, suggesting that the current economic trends and dynamics support this move. He emphasized that while rates may decrease significantly over the next 12-18 months, this is contingent on achieving progress toward the Fed's 2% inflation goal. Chicago Fed President Austan Goolsbee corroborated this outlook, forecasting a quarter-point cut by the end of this year and an additional full percentage point reduction by next year, consistent with earlier projections. Both officials noted that elevated borrowing costs could lead to higher unemployment if maintained. The Fed is closely monitoring inflation and labor market conditions before making any immediate decisions, with a focus on a stable economic state. Goolsbee reiterated the importance of not tying the Fed's hands while acknowledging market responses to rumors and speculation.