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The door to more rate cuts could open further soon, according to a Federal Reserve Bank president, but only if economic indicators remain sustainable on their current trajectories.
“There was a lot to like in this [consumer price index] report, for sure,” Federal Reserve Bank of Chicago President Austan Goolsbee said in an interview on “The Claman Countdown” Thursday.
“If we keep getting reports like this — I realize it’s just one month, and you never want to hinge too much on a single month — but that was a good month. And if we get clarity that we are, in fact, headed back to the 2% inflation target … we could back on that golden path. Rates could come down.”
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Goolsbee praised November’s inflation data, noting that the Bureau of Labor Statistics reported the Consumer Price Index rose 0.2% over the two months from September to November and 2.7% year over year — a release that reflects a delayed reporting window tied to the recent government shutdown and does not include a standard one-month October-to-November change.
Both figures came in below expectations of economists polled by LSEG, who projected a 0.3% monthly increase and a 3.1% year-over-year rise.
Fed policymakers also recently announced the third interest rate cut of the year, voting to lower the benchmark federal funds rate by 25 basis points to a new range of 3.5% to 3.75%. The move follows rate cuts of that size in September and October, which were the first of 2025. Goolsbee had voted against the latest rate cut decision, Reuters reported.
“If we get stabilized, full employment and we’re on path to 2% [inflation], I would be comfortable with rates being a fair bit below where they are today. I just am uncomfortable front-loading the rate cuts before we’re sure that we’re actually back headed to 2%,” Goolsbee explained Thursday.
When asked about concerns regarding the U.S. job market and the unemployment rate reaching its highest level since September 2021, the Fed president addressed how the central bank might balance inflation and labor-market challenges.
“There’s not an obvious playbook of what you do. I think that most measures of the job market, other than payroll employment … those have shown pretty steady, cooling mildly, but fairly steady,” Goolsbee said.
“And that’s why I say, if I get more assurance like what’s in the CPI … I believe rates can go down a fair bit from where they are now,” he reiterated, “as long as we know we’re on the path back to 2% and that what we’ve seen these blip ups in inflation are not stallouts, they’re not going the wrong way, they are going to truly prove to be transitory.”
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