- ORIGINAL NEWS
Fed’s Goolsbee says ‘more sniffing’ may be needed before rate cuts
- SUMMARY
Federal Reserve Bank’s Austan Goolsbee warns that the path to its target inflation rate of 2% has become more challenging, particularly in 2024.
Despite a significant drop from its pandemic peak, inflation remains stubbornly high, with the consumer price index rising 3.5% annually in March 2023.
Goolsbee emphasizes that the Fed needs to take a cautious approach before cutting interest rates.
He refers to himself as a “proud data dog” who believes in the importance of thorough analysis.
The Fed will continue to monitor economic indicators, such as housing inflation, which remains elevated.
If market rent inflation does not decline to align with official measures, it could hinder the Fed’s efforts to achieve its inflation target.
Housing costs carry significant weight in the consumer price index, and their continued increase poses a challenge to bringing overall inflation down to 2%.
Goolsbee stresses that the Fed will take its time to assess the economic situation and gather sufficient data before making any policy changes.
- NEWS SENTIMENT CHECK
- Overall sentiment:
negative
Positive
“During a session at the Society for Advancing Business Editing and Writing annual conference, Goolsbee declared, “We’re going to get to 2%.””
“Goolsbee expressed confidence in the economy’s path towards 2% inflation, emphasizing the need to remain vigilant”
“Goolsbee acknowledged the decline in market rent inflation, expressing hope that this trend will continue.”
Negative
“Austan Goolsbee, president of the Federal Reserve Bank of Chicago, stated on Friday that reaching 2% inflation in 2024 would be quite challenging.”
“Goolsbee raised concerns that decreasing rates may be difficult as inflation remains persistent above the Fed’s goal, despite falling from its peak of 9.1%.”
“He acknowledged that the progress may not be as swift as anticipated, suggesting a potential difficulty in achieving the target. “
“Goolsbee expressed concerns about housing inflation and its potential impact on the overall inflation rate.”
“However, he emphasized that if these expectations are not met, achieving a 2% inflation rate could prove challenging.”