Fed’s Goolsbee Suggests Potential for Additional Rate Cuts if Inflation Remains Steady
Federal Reserve Bank of Chicago President Austan Goolsbee expressed optimism regarding November’s Consumer Price Index (CPI) report, but emphasized the need for more consistent progress before considering a rate cut during his appearance on ‘The Claman Countdown.’
The possibility of further rate cuts may soon be on the table, according to Goolsbee, but only if economic indicators continue to show sustainable improvement.
“There was a lot to like in this [consumer price index] report, for sure,” Goolsbee stated 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 be back on that golden path. Rates could come down.”
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Goolsbee praised November’s inflation data, highlighting that the Bureau of Labor Statistics reported a 0.2% increase in the Consumer Price Index over the two months from September to November, with a year-over-year rise of 2.7%. This data reflects a delayed reporting window due to the recent government shutdown and does not include the typical one-month change from October to November.
Austan Goolsbee at the Kansas City Federal Reserve’s Jackson Hole Economic Policy Symposium in Moran, Wyoming, on Aug. 21. (Getty Images)
Both figures fell short of economists’ expectations, who had predicted a 0.3% monthly increase and a 3.1% year-over-year rise, according to LSEG.
Recently, Fed policymakers announced the third interest rate cut of the year, lowering the benchmark federal funds rate by 25 basis points to a new range of 3.5% to 3.75%. This decision follows similar cuts in September and October, marking the first reductions of 2025. Notably, Goolsbee voted against the latest rate cut, as reported by Reuters.
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“If we get stabilized, full employment and we’re on a path to 2% [inflation], I would be comfortable with rates being a fair bit below where they are today,” Goolsbee explained. “I just am uncomfortable front-loading the rate cuts before we’re sure that we’re actually back headed to 2%.”
Addressing concerns about the U.S. job market and the rising unemployment rate, which has reached its highest level since September 2021, Goolsbee discussed how the central bank might navigate the challenges of inflation and labor market dynamics.
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“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 noted.
“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 blips in inflation are not stallouts, they’re not going the wrong way, they are going to truly prove to be transitory.”
Federal Reserve Bank of Chicago President Austan Goolsbee expressed optimism regarding November’s Consumer Price Index (CPI) report, but emphasized the need for more consistent progress before considering a rate cut during his appearance on ‘The Claman Countdown.’
The possibility of further rate cuts may soon be on the table, according to Goolsbee, but only if economic indicators continue to show sustainable improvement.
“There was a lot to like in this [consumer price index] report, for sure,” Goolsbee stated 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 be back on that golden path. Rates could come down.”
NAVARRO WARNS U.S. ECONOMY IN ‘PERILOUS SITUATION’ AS SUPREME COURT WEIGHS TRUMP TARIFF POWERS
Goolsbee praised November’s inflation data, highlighting that the Bureau of Labor Statistics reported a 0.2% increase in the Consumer Price Index over the two months from September to November, with a year-over-year rise of 2.7%. This data reflects a delayed reporting window due to the recent government shutdown and does not include the typical one-month change from October to November.
Austan Goolsbee at the Kansas City Federal Reserve’s Jackson Hole Economic Policy Symposium in Moran, Wyoming, on Aug. 21. (Getty Images)
Both figures fell short of economists’ expectations, who had predicted a 0.3% monthly increase and a 3.1% year-over-year rise, according to LSEG.
Recently, Fed policymakers announced the third interest rate cut of the year, lowering the benchmark federal funds rate by 25 basis points to a new range of 3.5% to 3.75%. This decision follows similar cuts in September and October, marking the first reductions of 2025. Notably, Goolsbee voted against the latest rate cut, as reported by Reuters.
Allianz chief economic advisor Mohamed El-Erian joins the ‘Word on Wall Street’ panel on ‘Mornings with Maria’ to discuss Japan’s rate hike, market volatility, stubborn inflation, and what to expect from the Fed in 2026.
“If we get stabilized, full employment and we’re on a path to 2% [inflation], I would be comfortable with rates being a fair bit below where they are today,” Goolsbee explained. “I just am uncomfortable front-loading the rate cuts before we’re sure that we’re actually back headed to 2%.”
Addressing concerns about the U.S. job market and the rising unemployment rate, which has reached its highest level since September 2021, Goolsbee discussed how the central bank might navigate the challenges of inflation and labor market dynamics.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Navellier & Associates founder and CIO Louis Navellier discusses Paramount’s bid for Warner Bros. Discovery and evaluates potential Federal Reserve Chair nominees on ‘Mornings with Maria.’
“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 noted.
“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 blips in inflation are not stallouts, they’re not going the wrong way, they are going to truly prove to be transitory.”
