MNI BRIEF: Fed's Goolsbee Sees Jobs Risk From Tight Policy

Chicago Fed President Austan Goolsbee on Friday warned full employment may be at risk if the Federal Reserve stays too restrictive for too long. But he did not voice outright support for interest rate easing at the next Fed meeting in September or comment on the size of any potential cut. "I've been saying to you for a long time and publicly that we never want to overreact to any one month's numbers," he said in an interview with Bloomberg TV after a surprise jump in the U.S. unemployment rate to 4.3%.

But he noted that "the real fed rate is as high as it's been in decades and as inflation falls, that gets tighter. If we stay restrictive for too long, we're going to have to think about the employment side of the mandate." (MNI INTERVIEW: Fed Should Avoid Rushing Into Rate Cuts-George)

"The most important thing is to look at the throughline. What will determine the action is we don't want to tie our hands. Now, we're going to get a lot of information between now and the next meeting. And what will determine the size for the (September FOMC meeting) -- if there is action at all -- will be the conditions," Goolsbee said. "As is historically true, when conditions warrant a cut, they tend not to be one individual cut."