NICK GOSNELL
Hutch Post
HUTCHINSON, Kan. — Creighton University economist Ernie Goss said that the Federal Reserve may reduce interest rates this year, but it won't be by a lot, all things considered.
"The Fed has sort of indicated maybe two or three rate cuts this year," Goss said. "That would be 75 basis points or three fourths of one percentage point. Unfortunately, in my view, investors out there are saying, oh they are just kidding, they are going to do seven or eight. The only reason we would see seven or eight rate cuts in 2024 would be if the U.S. economy moves into a recession."
Goss isn't sure that will happen, as though growth has slowed, especially in the Midwest, it isn't clear if it has stopped entirely or not.
"At this point in time, it's looking more like very slow growth," Goss said. "That's true across the board, not just coming out of our survey, but other surveys are indicating the economy is slowing down, but still not a recession."
The Fed has also decided to keep things quantitatively the same for a bit.
"Instead of reducing the money supply, which they had been doing, they are going to hold it flat," Goss said. "That just means long term interest rates are not going to go up quite as fast as most economists expected them to go up."
That should at least give some certainty to longer term borrowers for a little while.
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