President Biden predicts Federal Reserve will cut interest rates
President Joe Biden predicted that the Federal Reserve will cut interest rates.
“I can’t guarantee it. But I bet — you betcha — those rates come down more, because I bet you that that little outfit that sets interest rates, it’s going to come down,” Biden said Friday in a speech in Philadelphia, according to media reports, including Bloomberg.
Biden not specify when he thought the rate cuts might start.
The process of "carefully" reducing interest rates "can and will begin over the course of this year" provided inflation comes in as expected, Federal Reserve Chair Jerome Powell said Thursday before the Senate Committee on Banking, Housing & Urban Affairs.
Powell warned on Wednesday that cutting interest rates too soon could cause damage, Powell said in his testimony at the House Financial Services Committee hearing.
"Reducing policy restraint too soon or too much could result in a reversal of progress we have seen in inflation and ultimately require even tighter policy to get inflation back to 2%," according to prepared text for Powell's opening statement.
Cleveland Fed President Loretta Mester on Thursday said she's expecting the Federal Open Market Committee will move quite slowly in easing policy, so as not to surprise the markets.