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The Federal Reserve may say it's bent on more interest rate hikes this year, but it's much more likely it will need to cut instead, warned Austan Goolsbee, a former adviser to President Barack Obama.

"They want to raise rates; they want to get back to normal. They have said they thought they would raise four times plus this year and I don't think there's any scenario in my mind that they'll be able to do anything remotely like that," Austan Goolsbee, who was chairman of Obama's Council of Economic Advisers from 2010-11, told CNBC's Squawk Box.

Goolsbee, who is now a professor at the University of Chicago's Booth School of Business, said, "It's far more likely that they'll have to reverse themselves as a number of other countries have, like Sweden and others, where they raise the rates thinking it'll be fine and then have to drop it."

The Fed itself fueled market expectations that its previously stated goal of about four interest rate hikes this year wasn't likely to come to fruition, with its post-meeting statement released overnight.

As widely expected, the central bank left rates unchanged but said it was "closely monitoring global economic and financial developments and is assessing their implications for the labor market and inflation, and for the balance of risks to the outlook."

Markets read the Fed's cautious tone on the economy and financial conditions as a sign it was not likely to hike rates in March.

"Growth has been only modest in the US and with the things going on around the rest of the world, I fear that 2016 might be worse than just modest growth," Goolsbee said. "We've had good improvements in the job market, but the GDP (gross domestic product) is still pretty weak."

First Published:Jan 28, 2016 7:54 AM IST