CHICAGO—Austan Goolsbee, president of the Federal Reserve Bank of Chicago, said he feels a “little uneasy” with any big interest rate cuts by the Fed, which is set to meet at the end of this month.
Goolsbee is a voting member of the Federal Open Market Committee (FOMC).
“I still think we’re going to end up with rates down a fair amount from where they are now,” Goolsbee told WISN 12’s “UPFRONT,” which is produced in partnership with WisPolitics. “The question of does that mean we should frontload and do all the cuts immediately while inflation is going the wrong way? Inflation is rising. We’ve been four-and-a-half years above 2%, which is what the Fed has said we want to get to. We’ve been four, four-and-a-half years now above 2, and it’s drifting up. So, I’m a little uneasy saying, hey, let’s just start doing all the cuts now.”
The Task by Law
“Our task by law at the Fed is to maximize employment and stabilize prices,” Goolsbee added during the program. “That’s our sacred dual mandate we call it, and that’s all we’re supposed to be thinking about. We’re definitely not supposed to be thinking about what the politicians say. There’s nothing in there that says make sure the stock market is happy. None of that is on there. It’s to maximize employment and stabilize prices, and people take it very seriously.”
Goolsbee said he recently visited Wisconsin, touring companies such as SC Johnson and Molson Coors.
“I was very interested when we made this trip to Molson Coors and SC Johnson, trying to understand how are tariffs and how is the supply chain holding up when there are a lot of pressures coming at it, and where are we in the business cycle?” he told WISN. “Does it feel like there might be layoffs? Does it feel like people are hiring? What’s going to be happening with inflation and prices?”
President Not on the FOMC
Asked about President Trump’s pressure on Federal Reserve Chairman Jerome Powell to lower interest rates faster, Goolsbee responded, “The first thing that goes through my mind is that person’s not on the FOMC. If you go to the FOMC meeting, the law tells us what we’re supposed to be listening to. Anybody not in the committee can have an opinion, and I try to embrace and explore the arguments that they’re making, but a world in which there can be political interference from a sitting administration with what the interest rate should be, that’s a big mistake. That’s the nature of central bank independence.”
