Chicago Fed President Austan Goolsbee emphasized a cautious stance on monetary policy, citing the high level of uncertainty surrounding the economic outlook.
Speaking on CNBC, Goolsbee said “everything’s always on the table,” but that the bar for further action is “a little higher” until more clarity emerges.
He flagged the stagflationary effects of trade policy shifts as a key concern, calling such an environment “the central bank’s worst situation,” and adding that policymakers will need to closely assess how much tariffs push prices higher.
While markets are pricing in two Fed cuts this year, likely starting in September Goolsbee avoided committing to any timeline.
He stressed the need for flexibility, saying, “I don’t like even mildly tying our hands at the next meeting.” Still, he maintained that, heading into April 2, inflation appeared to be easing and the labor market was stable, conditions under which interest rates could “come down a fair amount” over the next 12 to 18 months.
