The Fed’s Goolsbee says more rate cuts are possible if inflation remains stable
Federal Reserve Bank of Chicago President Austan Goolsbee says there’s a lot to like in the November CPI report but he’d like to see some ‘sustainable’ progress before voting for a rate cut in ‘The Claman Countdown.’
The door to further rate cuts could soon open, according to the president of the Federal Reserve Bank, but only if economic indicators remain stable on their current tracks.
“There was a lot we liked this time [consumer price index] report, sure,” Federal Reserve Bank of Chicago President Austan Goolsbee said in an interview on “The Claman Countdown” Thursday.
“If we continue to get reports like this – I realize it’s just one month, and you don’t want to get too hung up on one month – but that was a good month. And if we get clarity that in fact, we’re back to the 2% inflation target … we can go back to that golden path. Rates can come down.”
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Goolsbee praised the November inflation data, noting that the Bureau of Labor Statistics reported that the Consumer Price Index rose 0.2% in the two months from September to November and 2.7% year-over-year — a release that reflects the delayed reporting window associated with the recent government shutdown and does not include the usual one-month change from October to November.
Austan Goolsbee at the Kansas City Federal Reserve’s Jackson Hole Economic Policy Symposium in Moran, Wyoming, on Aug. 21. (Getty Images)
Both figures came in below the expectations of economists polled by LSEG, which indicated it would increase by 0.3% monthly and 3.1% year-on-year.
Fed policymakers also recently announced their third interest rate cut of the year, voting to lower the federal funds rate by 25 basis points to a new range of 3.5% to 3.75%. The move follows rate cuts of that size in September and October, which was the first of 2025. Goolsbee voted against the latest decision to cut prices, Reuters reported.
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“When we stabilize, we are fully employed and on our way to 2% [inflation]I would be comfortable with prices being a little lower than where they are today. I’m not comfortable front-loading a rate cut before we’re sure we’re back to 2%,” Goolsbee explained on Thursday.
When asked about concerns about the US labor market and the unemployment rate reaching its highest level since September 2021, the Fed president talked about how the central bank can balance inflation with labor market challenges.
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“There’s no clear playbook for what you do. I think most of the labor market measures, other than payroll employment … those have shown stability, a little cooling, but steady,” Goolsbee said.
“And that’s why I say, if I get more certainty like what’s in the CPI…
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