Chicago Fed’s Goolsbee explains dissent on rate cut decision
Chicago Fed President Austan Goolsbee said Friday that he voted against the central bank’s recent quarter-point rate cut because he believed waiting for more economic data would have been more prudent.
Goolsbee was one of three officials who dissented in the Federal Reserve’s 9-3 vote on Wednesday to lower the benchmark interest rate to the 3.5% to 3.75% range.
"We should have waited to get more data, especially about inflation," Goolsbee said, noting that delaying until early next year would have provided policymakers with updated government statistics, including key reports coming next week.
The Fed president emphasized that waiting posed little additional risk to a job market that appears to be "only moderately cooling." He added that there was "little to suggest a deterioration of the labor market so rapid that we could not have waited for the data to come in the early months of next year before deciding to act."
Kansas City Fed President Jeffrey Schmid also dissented in favor of holding rates steady, while Fed Governor Stephen Miran argued for a larger half-point cut.
Goolsbee pointed out that inflation has remained above the Fed’s target for four and a half years, with progress stalling for several months. He noted that businesses and consumers in his district continue to identify rising prices as a main concern.
Despite his vote against the current cut, Goolsbee remained "optimistic" that rates could decrease "by a significant amount" next year if incoming data shows inflation returning to the central bank’s 2% target.
Source: Investing.com
