Federal Reserve Bank of Chicago: economy may be on promising trajectory

(MENAFN) Austan Goolsbee, the president of the Federal Reserve Bank of Chicago, expressed on Monday that the economy may be on a promising trajectory, often referred to as the "golden path" in economic terms. This concept aligns with the idea of a "soft landing," where the Federal Reserve effectively addresses inflation without precipitating a severe economic downturn. Goolsbee shared his views in an interview with The Associated Press, noting that historically, significant reductions in the inflation rate have been accompanied by major recessions. Despite this, he remains optimistic about the possibility of achieving a more substantial soft landing than commonly anticipated.

Goolsbee, however, tempered his optimism by stating that he has not definitively predicted this scenario. While he did not disclose his stance on the future trajectory of the Fed's key short-term interest rate, he refrained from commenting on the timing of any potential rate cuts.

The optimism expressed by Goolsbee aligns with a growing sentiment among analysts who increasingly believe that the Federal Reserve's next move will likely be a rate cut rather than an increase. Investors on Wall Street are signaling minimal expectations for a rate hike in the upcoming Fed meetings in December or January. Looking ahead, market indicators suggest a 28 percent probability of a rate cut in March, a figure that has doubled in perceived likelihood over the past month. Additionally, there is roughly a 58 percent chance of a rate cut in May, underscoring the evolving dynamics and expectations within the financial markets.


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