Chicago Fed President Austan Goolsbee said Friday that despite the increased risks, he still believes interest rates in the card are lower.
Two days after he and his colleagues spoke again Voting to keep short-term interest rates stableGoolsbee told CNBC that he has been hearing more concerns about the impact of tariffs in the region and its potential to increase prices and growth rates.
Central bankers have cleared some of these things in policy terms, and I do need to wait for some things,” Central bankers have cleared all of them in policy terms.Squawk Box“Interview.” I’m talking to businessmen and civic leaders in the area, and over the past six weeks these conversations have been decided, anxious, suspended, waiting for capital projects, capital expenditures, etc. until they figure out tariffs, other fiscal policies. ”
Still, Goolsbee said he still expects a future tax cut, even if the Fed is waiting, as it plays a role in President Donald Trump’s tariff plan and issues of deregulation and tax cuts.
“If we can continue to make progress on inflation in the long run, I believe the 12-18-month rate from now will be lower than today,” he said.
New York Fed Chairman John Williams made separate speeches Friday morning, pointing to the high level of uncertainty surrounding decision-making and economic trends, especially inflation.
“Recent data (both hard or soft) sends mixed signals. Measures of policy uncertainty have increased dramatically in recent months,” Williams said in a speech in Nassau, Bahamas.
Both policymakers voted among other members of the Federal Open Market Committee to keep the short-term Fed funding rate between 4.25% and 4.5%. In a statement after the meeting, the FOMC stated that “the uncertainty in the economic outlook has increased”, the Chairman and Chairman Jerome Powell The term “uncertainty” was used 10 times in his postal press conference.
A question raised in recent days is The U.S. economy is stagnatingOr slow growth and rising inflation.
“Tariffs, raise prices and lower outputs. So it’s a stagnant impulse, which is different from saying it’s stagnant,” Goolsbee said. “Unemployment is only 4% and inflation is in 2s. So the hard data we started is not the stagnation of the 1970s. It’s just… the unsettling environment is when moving in the wrong direction.”
FOMC conference participants continued their forecasts until two cuts in 2025. However, the market believes that the Fed will be more aggressive, equivalent to a third of a percentage point price. CME group data.
