Fed’s Goolsbee cautious on rate cuts despite supporting recent easing

Investing.com -- Federal Reserve Bank of Chicago President Austan Goolsbee expressed caution about aggressive interest rate cuts despite supporting last week’s interest-rate cut.

Speaking at an event in Grand Rapids, Michigan on Thursday, Goolsbee said he backed the recent rate cut because the job market is cooling, but remains hesitant about additional rapid policy easing while inflation remains above target and is moving in the wrong direction.

"If we get data that should show we’re on the path to maintain stable full employment and inflation is likely to be coming back down to 2%, I think rates can go down a fair bit more from where they are even now," Goolsbee said. "But I’m just a little uneasy with too much front loading until we’re sure that’s happening."

The Fed official expressed discomfort with the idea of counting on inflation being transitory and emphasized the central bank’s commitment to its inflation target, stating "we will and must get inflation to 2%."

Goolsbee also highlighted the importance of central bank independence, noting that inflation tends to rise when sitting governments can dictate interest rate decisions to central banks.

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