Chicago Federal Reserve President Austan Goolsbee signalled discomfort with delivering another rapid rate cut, warning that policymakers risk front-loading easing before knowing whether the recent rise in inflation is temporary. Speaking in a virtual interview, Goolsbee said inflation has been “steady at best, and by some measures worse,” leaving him uneasy about adding a third consecutive cut in December.
Goolsbee stressed that he is not hawkish over the medium term — he still expects rates to settle “well below” current levels — but he argued that policymakers must get past this current patch of uncertain inflation data. The federal shutdown has also deprived the Fed of key inflation readings, which he said creates more risk on the price front than for the labour market, where alternative data remain available.
His comments highlight the widening divide inside the central bank. Some officials warn the labour market could weaken sharply without more easing; others believe inflation is the more pressing threat. Goolsbee, a voter this year, sided with the majority in supporting rate cuts in September and October, believing then that only one additional cut would be needed for 2025. The delayed September jobs report broadly confirmed his view of gradual cooling in the labour market.
While he values Chair Jerome Powell’s consensus-building approach, Goolsbee said he would not hesitate to dissent in December if he strongly disagrees with the committee: “There’s nothing wrong with dissenting.”
