Investing.com — Chicago Federal Reserve President Austan Goolsbee said Thursday eh continued to sees lower rates ahead, though cautioned that the pace of cuts may need to slow amid uncertainty about where the rate-cut cycle will eventually end.
“[i]f we look out over the next year or so, it feels to me like rates will end up a fair bit lower than where they are today,” Goolsbee said in prepared remarks for an event at the Central Indiana Corporate Partnership in Indianapolis, Ind., on Thursday.
While the road lower to a neutral rate is paved with uncertainty amid ongoing debate about where rates will ultimately settle, Goolsbee said he sees rates over the next ending up “fair bit lower than where they are today.”
The Fed cut rates in November to a range of 4.5% to 4.75% and is widely expected to deliver another 25bps cut in December.
The Chicago Fed chief also said that a longer view on the economy was needed following recent concerns about upside inflation and stronger labor market.
“My view is that the long arc over the last year and a half shows inflation is way down and on its way to 2 percent. Labor markets have cooled to something close to stable full employment,” Goolsbee said.
As the Fed inches closer toward its dual mandate goals of 2% inflation and maximum employment, Goolsbee believes it would appropriate for the central bank to “move rates to where we think they should settle, too.”