Investing.com -- Chicago Federal Reserve President Austan Goolsbee said on Tuesday that interest-rate cuts may need to wait until 2027, depending on how long oil prices remain elevated.

"It's our job to get inflation back to 2%," Goolsbee said at the Semafor World Economy conference.

Before the Iran war, Goolsbee had expected tariff inflation to recede this year, which would have allowed the Fed to cut rates. He said he thought there could be multiple rate cuts in 2026. However, the longer inflation remains high without showing signs of decrease, the more likely rate cuts will be pushed beyond 2026.

Goolsbee said there are circumstances where rates can go up, circumstances for a hold, or decreases.

"The longer this goes, if inflation stays up, that pushes cuts out of 2026," Goolsbee said. He added that if inflation doesn't show improvement, time for optimism gets postponed.

The Fed official said the central bank will need to wait and see what happens with oil markets. He noted that if the Fed saw progress on core inflation, he would be feeling better, even if headline inflation remained high.

Goolsbee stated that if inflation is at 4%, nobody should be thinking rates should go back to 2%. He added that the Fed has had good news on housing inflation.

Asked about Kevin Warsh, President Donald Trump's nominee for the next Fed Chair, Goolsbee said he has a lot of respect for Warsh and is not nervous as long as people come with the Fed mindset that the law gives the central bank a job about the economy, not electoral politics. He said he thinks Warsh will come with that attitude.