Fed’s Goolsbee calls for a hold on cuts as current rate of inflation is ‘not good enough’
(CNBC): Chicago Fed President Goolsbee cautions against interest rate cuts until inflation decreases.
Chicago Federal Reserve President Austan Goolsbee emphasized the need for caution in implementing interest rate cuts, stating that it is important to wait for inflation to decrease before taking action. Recent data shows inflation above the Fed’s 2% target, with core inflation at 3% in December. Goolsbee highlighted the impact of tariffs on inflation but also noted underlying pressures in the service sector driving prices up. He stressed the importance of vigilance, particularly in addressing housing inflation, which is not tariff-driven. Goolsbee expressed concern over the current 3% inflation rate, stating that it falls short of the Fed’s 2% target and is not a safe level. While Goolsbee believes the Fed may cut rates later in the year, markets expect the Federal Open Market Committee to maintain the current rate until at least June or July. Fed Governor Christopher Waller also spoke at the NABE conference, indicating a more cautious approach towards rate cuts due to positive labor market data.
