Goolsbee Sets a 2% Inflation Threshold for Fed Rate Cuts

Overview

• Chicago Fed President Austan Goolsbee said the Federal Reserve should not cut interest rates until inflation convincingly returns to the 2% target.
• He called roughly 3% inflation unacceptable and pointed to producer price data as a better lens for services inflation.
• Recent consumer price figures offered some encouraging signs yet still raised concerns, keeping officials cautious on the timing of any easing.
• Payroll data indicate a still-robust labor market with only modest cooling, reinforcing a patient stance on policy.
• Goolsbee said tariff-driven price pressures have likely peaked, as markets weigh mixed signals and President Donald Trump nominates Kevin Warsh to lead the Fed.