MNI BRIEF: Fed Risks Soft Landing If It Doesn’t Cut - Goolsbee
MNI (WASHINGTON) - Chicago Fed President Austan Goolsbee on Thursday said the Federal Reserve might need to ease interest rates soon in order to avoid an unwanted sharper deterioration in the labor market.
The labor market is “definitely an area of concern," while "you're finally starting to see the declines of housing inflation that we've been anticipating and improvements on the services side too," said Goolsbee in an interview with Yahoo Finance! The Chicago Fed chief said the real fed funds rate adjusted for inflation has been as high as it has been in decades and it only increases as inflation declines. "Let's just make decisions about restrictiveness by choice. Let's not back our way into it. That's my view."
Asked whether officials risk their inflation battle without a significant rise in unemployment, Goolsbee said: “Yes.” (See: MNI INTERVIEW: Fed Cuts Near, Hiring Weaker Than Appears - Wilcox)