Fed Goolsbee sees solid inflation performance, expects lower rates in future

Published 31/01/2025, 16:24
© Reuters.

Investing.com -- Austan Goolsbee, President and CEO of the Federal Reserve Bank of Chicago, shared his views on the recent personal consumption expenditures (PCE) data during an interview on CNBC. The PCE core reading was 0.2%, matching predictions.

Goolsbee expressed satisfaction with the current inflation data, indicating it was slightly better than anticipated. He expressed confidence that the economy is on track for a 2% inflation rate.

He further discussed the potential impact of policy uncertainties on price levels. He suggested that in times of uncertainty, there should be a slowdown in adjusting rates toward neutrality. He noted that there have been several months of solid inflation performance, hovering around 2%.

Looking ahead, Goolsbee anticipated that interest rates would be lower 12 to 18 months from today. He also described the job market as stable and close to full employment.

Goolsbee also touched on the potential impacts of policy uncertainty on the Federal Reserve. He suggested that a one-time increase in tariffs is theoretically temporary and may not require a policy response.

The Chicago Fed chief described the underlying economy as on an ’excellent path’. He expressed no concern about slowing the pace of rate cuts and moving cautiously toward neutral rates. He agreed with the sentiment of not rushing to adjust policy.

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