Last week, the Fed announced its March interest rate decision. As expected, the Fed kept interest rates unchanged, while Fed Chairman Jerome Powell signaled that they would be cautious about rate cuts as long as inflationary pressures persist.
Powell, indicating the possibility of a two-pronged approach regarding interest rates, stated that the issue of raising interest rates was also discussed at the last meeting.
At this point, Chicago Fed President Austan Goolsbee said that future decisions would depend on the course of the war in the Middle East.
Speaking to CNBC, Goolsbee raised the possibility of an interest rate hike.
He said that depending on the course of the war in the Middle East, the Fed may need to raise interest rates or return to rate cuts.
“Depending on the circumstances, we may have to raise interest rates.”
At this point, if inflation remains under control, we may return to a situation where we can make multiple interest rate cuts throughout the year.
However, I also foresee situations where we may need to raise interest rates if inflation gets out of control and goes in a different direction.”
“I Expect Four Interest Rate Cuts!”
Stephan Miran, the most moderate Fed member besides Goolsbee, also made important statements.
Speaking to Bloomberg, Federal Reserve Board member Stephan Miran said they should not make policy decisions based on short-term news.
Arguing that it was too early to assess the current situation, Miran suggested that interest rate decisions could go either way.
At this point, Miran stated that he maintains his expectation of interest rate cuts this year, but that interest rate hikes are also possible.
“I expect four interest rate cuts this year.”
However, interest rate hikes may be necessary if a second wave of inflation or wage increases emerges. For now, I don’t think there’s any need to consider raising interest rates.”
*This is not investment advice.
