Federal Reserve Bank of Chicago President Austan Goolsbee says there is a lot to like in the November CPI report, but he would like to see more “sustainable” progress before voting on a rate cut on “The Claman Countdown.”
The door to more rate cuts could soon open wider, but only if economic indicators remain sustainable on their current trajectory, according to a Federal Reserve Bank president.
‘There was a lot to like about it [consumer price index] definitely report that,” Austan Goolsbee, president of the Federal Reserve Bank of Chicago, said Thursday in an interview on “The Claman Countdown.”
“If we continue to get reports like this – I realize it’s only one month, and you never want to rely too much on one month – but that was a good month. And if we get clarity that we are in fact going back to the 2% inflation target… we can get back on that golden path. Interest rates could fall.”
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Goolsbee touted the November inflation data, noting that the Bureau of Labor Statistics reported that the Consumer Price Index rose 0.2% over the two months from September to November and 2.7% year over year – a release that reflects a delayed reporting period related to the recent government shutdown and does not include a standard change from October to November.
Austan Goolsbee at the Kansas City Federal Reserve’s Jackson Hole Economic Policy Symposium in Moran, Wyoming, on August 21. (Getty Images)
Both figures fell below expectations of economists surveyed by LSEG, who forecast a monthly increase of 0.3% and a 3.1% increase year-on-year.
Fed policymakers also recently announced the third rate cut of the year, voting to cut the fed funds rate by 25 basis points to a new range of 3.5% to 3.75%. The move follows rate cuts of that magnitude in September and October, the first of 2025. Goolsbee had voted against the last rate cut decision, Reuters reported.
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‘If we stabilize, there will be full employment and we will be on our way to 2% [inflation]I would like it if the rates were a lot lower than where they are now. I just feel uncomfortable bringing forward the rate cuts before we’re confident that we’re actually back on track to 2%,” Goolsbee explained Thursday.
When asked about concerns about the U.S. labor market and the unemployment rate reaching its highest level since September 2021, the Fed president addressed how the central bank could balance inflation and labor market challenges.
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“There’s no obvious playbook of what you do. I think most of the measures of the labor market, other than payroll employment … they’ve been pretty stable, slightly cooling, but pretty stable,” Goolsbee said.
“And that’s why I say, if I get more certainty like what’s in the CPI… I believe that rates can come down quite a bit from where they are now,” he reiterated, “as long as we know that we’re on the path back to 2% and that what we’ve seen are these bursts in inflation are not stagnations, they’re not going in the wrong direction, they’re really going to prove to be transitory.”
