Fed/Goolsbee: Interest Rates Will Be Slightly Lower Next Year Than They Are Today

Foreks - Chicago Fed President Austan Goolsbee reiterated his support for further interest rate cuts and indicated that he is open to gradual reductions. "In my view, the prolonged stretch over the past one and a half years shows that inflation has fallen significantly and is heading toward 2%. The labor markets have also stabilized close to full employment," Goolsbee stated, adding, "In both areas, things are moving closer to where we want them to be." He also noted that policymakers do not need to bring interest rates down to that point immediately, saying, "However, looking over the next year, it seems to me that interest rates will be a bit lower than they are today." Fed policymakers are set to convene on December 17-18 to potentially lower the policy rate or decide to wait until next year, aiming to resolve their differences at least temporarily. Financial markets assess this as a close meeting, with interest rate futures giving about a 55% probability for a quarter-point cut and a 45% chance that no reduction will take place.