New Hawkish Signal: Goolsbee Hints at Long-Term Rate Cut
Chicago Federal Reserve President Austan Goolsbee said an interest rate cut could not come until 2027, depending on how long oil prices remain high and inflation remains sticky. Speaking to the AP at the Semaphore World Economy conference on Tuesday (April 14), Goolsbee emphasized the Fed's mandate is to bring inflation back to 2%.
Goolsbee said before the Iran war that he expected tariff-related inflation to ease this year, opening up room for a cut. He even saw the possibility of another cut in 2026. However, if inflation doesn't fall and instead remains high, he believes it would "realistically" push the cut timeline beyond 2026.
For the market, this message reinforces the energy-sensitive "higher for longer" scenario: as long as oil remains high and inflation struggles to fall, the room for monetary policy easing is potentially constrained. The variables market participants will be monitoring are primarily the path of inflation to 2% and the duration of energy price pressures.
Source: Newsmaker.id
