Tue, Jun 18, 2024

USD: Fed’s Goolsbee: 3 Rate Cuts in 2024 Align with My Thoughts

The Chicago Fed President Austan Goolsbee said there will be three rate cuts in 2024 in my opinion, Last 2 months CPI data is higher that is not taken to consideration, Comparing to Last year, This year is inflation is cooling down. Housing market has to comedown then only inflation will be target to 2%. FED has to see Dual Mandate, notonly in Inflation data, look at stable prices and employment. US Dollar index moved down after this speech on more rate cuts in 2024.

USD Index Market Price is moving in Ascending channel and market has reached higher low area of the channel

USD Index Market Price is moving in Ascending channel and market has reached higher low area of the channel

Chicago Fed President Austan Goolsbee stated Monday that three rate cuts in 2024 align with his views, emphasizing the persistent narrative of declining inflation despite recent spikes in January and February.

In an exclusive interview with Yahoo Finance Live, Goolsbee highlighted the continuity of the narrative, asserting that the preceding months were not merely arbitrary.

This sentiment mirrors Federal Reserve Chair Jay Powell’s recent remarks following the decision to maintain interest rates and uphold projections for three rate cuts this year, alongside heightened expectations for inflation and economic expansion.

FED Powell will do tapering in the upcoming meeting as Job data proves a positive mood in the economy.

The decision to maintain the projection of three rate cuts for 2024, despite stubborn inflation figures, contradicts earlier assumptions of a reduction in cuts.

Goolsbee attributed the lingering inflation to housing, emphasizing the necessity for a decline in housing inflation closer to pre-pandemic levels.

While market speculation leans towards a rate cut in June, Goolsbee refrained from confirming a specific timeline, stating that all options remain on the table.

The divergence in views among Fed officials regarding the number of rate cuts persists, with Atlanta Fed President Raphael Bostic advocating for a single rate cut later in the year, emphasizing the importance of patience given the current economic resilience.

Additionally, Governor Lisa Cook advocated for a cautious approach to policy adjustments to ensure sustainable inflation return and maintain a robust labor market.

Goolsbee stressed the importance of balancing the dual mandate of the Fed, focusing not only on inflation but also on employment stability, particularly considering the recent influx of immigrants post-pandemic, which he believes will bolster consumer spending and economic growth.

He also expressed support for slowing the Fed’s balance sheet contraction, suggesting a separate trajectory from rate cuts, emphasizing the need for a gradual approach as reserves become more abundant.

Goolsbee remained noncommittal on the sequence of rate cuts and balance sheet adjustments, suggesting it would be contingent on circumstances.

USD: Fed Officials Bet on Inflation Slowdown, Cautious on Rise

The Chicago Fed President Austan Goolsbee said there will be three rate cuts in 2024 in my opinion, Last 2 months CPI data is higher that is not taken to consideration, Comparing to Last year, This year is inflation is cooling down. Housing market has to comedown then only inflation will be target to 2%. FED has to see Dual Mandate, notonly in Inflation data, look at stable prices and employment. US Dollar index moved down after this speech on more rate cuts in 2024.

USD Index Market Price is moving in box pattern and market has rebounded from the support area of the pattern

USD Index Market Price is moving in box pattern and market has rebounded from the support area of the pattern

Federal Reserve Officials Remain Confident on Inflation Easing, Yet Exercise Caution

Federal Reserve officials reiterated their belief on Monday that U.S. inflation will diminish, particularly with expectations of housing price increases aiding in lowering the overall pace of price rises. However, they also acknowledged an elevated sense of caution surrounding the ongoing debate.

During an event hosted by Harvard University, Fed Governor Lisa Cook endorsed a “cautious” approach to monetary policy easing, emphasizing the persistent high levels of housing-services inflation while highlighting a gradual decrease in new rental lease rates.

In an interview with Yahoo Finance, Chicago Fed President Austan Goolsbee expressed surprise at the persistence of housing inflation but anticipated its eventual decline. He emphasized the need to bring down housing inflation closer to pre-pandemic levels, citing market rents as indicative of progress yet to be fully reflected in overall data.

Despite maintaining the benchmark interest rate range, Fed officials, in their quarterly economic projections, continue to anticipate three quarter-percentage-point rate cuts this year.

Goolsbee aligned with the median projection, expressing confidence that inflation will decrease sufficiently for monetary policy easing to proceed. However, he acknowledged a shift in the tone of the debate due to the slower pace of inflation progress compared to last year.

Inflation Data rise to a higher number this gives the way for tapering assets by FED

While Goolsbee and some others maintain faith in a continued decline in inflation, Atlanta Fed President Raphael Bostic expressed less confidence, reducing his expected rate cuts for the year from two to one. Bostic emphasized the need for vigilance in understanding current inflation dynamics, particularly regarding items experiencing outsized price increases reminiscent of past inflation peaks.

Despite market expectations for rate cuts starting in June, recent projections hint at a potential reduction in monetary easing, reflecting slight shifts in policymakers’ risk assessments towards concerns about higher inflation.

New inflation data due to be released on Friday will be closely monitored, with hopes for accelerated improvement given the current inflation levels surpassing targets.

Cook echoed the sentiment for caution in easing monetary policy, emphasizing the need for a careful approach to ensure the restoration of price stability over time, even as risks to employment and inflation goals move into better balance.

USD: Goolsbee: Housing, the Main Inflation Puzzle

The Chicago Fed President Austan Goolsbee said there will be three rate cuts in 2024 in my opinion, Last 2 months CPI data is higher that is not taken to consideration, Comparing to Last year, This year is inflation is cooling down. Housing market has to comedown then only inflation will be target to 2%. FED has to see Dual Mandate, notonly in Inflation data, look at stable prices and employment. US Dollar index moved down after this speech on more rate cuts in 2024.

USD Index Market Price is moving in Ascending channel and market has fallen from the higher high area of the channel

USD Index Market Price is moving in Ascending channel and market has fallen from the higher high area of the channel

Discussing the inflation outlook, Chicago Fed President Austan Goolsbee stated on Monday that the situation is “a bit murky.”

Key Quotes:

– “The fundamental narrative hasn’t shifted significantly.”

– “The Fed must navigate its dual mandate.”

– “We’re looking for improvement in inflation reduction.”

– “Housing remains the primary enigma in inflation.”

– “The alignment of three cuts in 2024 reflects my stance.”


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