MNI BRIEF: Fed's Goolsbee Supports Slowing Rate Cuts
MNI (WASHINGTON) - Federal Reserve Bank of Chicago President Austan Goolsbee said Friday he supports slowing the pace of interest rate cuts as rates near neutral, though recent inflation data continue to support "fair bit lower" rates in the next 12 to 18 months.
"I have no problem slowing our pace of cutting, feeling our way to where neutral is, as we're getting closer to neutral," he told CNBC. "If you feel like we're continuing on this path of inflation coming down to 2%, then that to me opens the door for rates to be a fair bit lower than they today once we're 12 to 18 months in the future."
Friday's December PCE inflation report was a little better than expected, giving him "comfort that we're on that path" to 2%. But the Fed will need to work through new tariffs President Donald Trump plans to impose on imports and any retaliatory measures from trading partners "to figure out which part of the inflation is the part that monetary policy should look through, and which part is a sign of the economy." (See: MNI INTERVIEW: Fed Won’t Consider Cuts ‘Til At Least May-Groen)