Fed Officials Prioritize Inflation Fight, Signal Caution on Rate Cuts

Overview

• Chicago Fed President Austan Goolsbee said persistent inflation requires vigilance and questioned whether policy is truly restrictive with the real funds rate near its long‑run level.
• Goolsbee said rate cuts this year are not ruled out but would depend on firmer progress lowering inflation.
• He described a pattern of few hires and few layoffs tied to elevated business uncertainty, citing questions after last week’s Supreme Court ruling on tariffs.
• Goolsbee added that recent U.S. growth has been driven by broad consumer spending rather than investment linked to artificial intelligence or data centers.
• Atlanta Fed President Raphael Bostic warned that AI adoption could raise structural unemployment and argued such shifts are better addressed by fiscal policy than by cutting interest rates.