Fed's Harker: Rate Cut May Not Come Until 2027

BlockBeats News, April 15th - Federal Reserve Bank of Chicago President Gulsbee said Tuesday that if the Iran war leads to a long-term high oil price, thereby slowing down the process of inflation falling back to the Fed's 2% target, the Fed may not cut interest rates until 2027.

Gulsbee said during the Semafor World Economic Conference: "I originally thought that there might be multiple rate cuts in 2026; but if this situation continues and we still do not see inflation coming down and inflation remains high, in reality, this will postpone the timing to after 2026. Our responsibility is to pull inflation back to 2%."

Gulsbee was once a more optimistic member within the Fed, believing that tariff-driven inflation would fall back this year, allowing the Fed to resume rate cuts. However, his confidence has now waned. He said: "In some cases, interest rates may rise; in other cases, this is all proven to be temporary - once the oil price shock in the Middle East is resolved and inflation falls again, it seems we are returning to our 2% target, and then rate cuts will also be back on the agenda." (Krypton Capital)