The Federal Reserve is making moves, with Powell stating on Thursday that there is no rush to cut interest rates, as the economy is not showing signs that require immediate action. Goolsbee, speaking on Friday, expressed comfort in not aggressively moving towards a neutral position. He foresees interest rates being significantly lower in the next 12-18 months, with the condition that progress is made towards the 2% inflation target.
Goolsbee also mentioned that interest rates are likely to decrease in line with recent projections. He emphasized that the current inflation rate is too high to be maintained for a long period. However, he pointed out that strong economic growth does not necessarily mean the economy is overheating. He attributed this to productivity gains in the past year, which allow for faster economic growth without causing additional inflation.
