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The policy-setting Federal Open Market Committee should not wait until PCE inflation reaches the 2% target to make interest rate cuts, Chicago Federal Reserve President Austan said Wednesday. Goolsbee.
“Rate cuts should be linked to confidence in being on track toward the goal,” Goolsbee said in a prepared speech at the Council on Foreign Relations in New York. “More data like we've seen in the last six months would point that way, but it's probably too strict.”
He stressed that the central bank is on the right path, as “it is totally clear that inflation is going down,” citing inflation at three-, six- and 12-month annual rates.
His comments come a day after higher-than-expected U.S. consumer price inflation led market participants to push back their expectations for rate cuts later in the year.
But Goolsbee, who does not vote on monetary policy decisions this year, stressed the importance of “raising when the monthly CPI is higher than expected.” He aggregate that inflation expectations have remained under control, underscoring evidence of the Federal Reserve's credibility.
10:03 am Eastern Time: Achieving productivity growth in the pre-pandemic era would be a “huge success.”
Update at 9:58 a.m. ET: Goolsbee does not see an alternative to the US dollar as a reserve currency, especially cryptocurrencies. He noted that international trade, excluding the United States, in US dollars is “surprisingly large.”
This is a developing story. Please check back for updates.
