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President Joe Biden has predicted that the Federal Reserve will cut interest rates.
“I can’t guarantee that. But I bet – you can bet – that those rates are going to go down more, because I bet that that little group that sets interest rates, they’re going to go down,” Biden said on Friday. in a speech in Philadelphia, according to media reports, including Bloomberg.
Biden does not say when he thinks the rate cuts might begin.
The process of “carefully” reducing interest rates “can and will begin later this year” provided inflation arrives as expected, Federal Reserve Chair Jerome Powell said Thursday before the Senate Banking Committee , housing and urban affairs.
Powell warned on Wednesday that cutting interest rates too soon could cause harm, Powell said in testimony at the House Financial Services Committee hearing.
“Reducing policy restrictions too soon or too much could result in a reversal of the progress we have seen in inflation and ultimately require even more restrictive policy to bring inflation back to 2%,” according to the text prepared for the Powell’s opening statement.
Cleveland Fed President Loretta Mester said Thursday that she expects the Federal Open Market Committee to move rather slowly in easing policy so as not to surprise markets.