Austan Goolsbee, president of the Chicago Fed commented today Fed interest rates policy and economy, for CNBC. Here are the highlights from his remarks.
Fed's Goolsbee
āđāļĢāļīāđāļĄāđāļāļĢāļāļāļąāļāļāļĩāļ§āļąāļāļāļĩāđ āļŦāļĢāļ·āļ āļĨāļāļāđāļāđāļāļąāļāļāļĩāļāļāļĨāļāļāđāļāļāđāļĢāđāļāļ§āļēāļĄāđāļŠāļĩāđāļĒāļ
āđāļāļīāļāļāļąāļāļāļĩāļāļĢāļīāļ āļĨāļāļāđāļāđāļĄāđ āļāļēāļ§āļāđāđāļŦāļĨāļāđāļāļāļĄāļ·āļāļāļ·āļ āļāļēāļ§āļāđāđāļŦāļĨāļāđāļāļāļĄāļ·āļāļāļ·āļ- I do not think rates will go back to where they were before the pandemic. I still feel good about a 12 to 18-month path to the neutral interest rate.
- It is possible long rates are rising because growth is expected to be higher, or because markets think the Fed might slow its rate cuts.
- The Fed has to figure out why the 10 year is rising, and keep an eye on long rates.
- I have seen prior moves up in import prices that were just a bump in the road.
- What matters to the Fed is the new months of inflation data that are coming in, the Fed must reach 2%.
- Rates are likely to need to fall over the next year. The Fed is not going to move the inflation goalposts.
- Core PCE is still too high. Policy has nothing to do with the outcome of the election but the condition of the economy.
- If there is disagreement over the neutral rate, it does make sense to start slowing the pace of rate cuts.
- As long as inflation continues to come down, rates will be a lot lower than they are now.
- It's hard to reconcile recent weak jobs reading given storm impacts.
- The basic story of the economy remains falling inflation, and the labor market cooling to full employment
- The current Fed policy is still in restrictive posture.
EURUSD erased most of its today gains after US retail sales data and upbeat in NY Fed; now falling to 1.0533.
Source: xStation5
