Fed's Goolsbee (2027 voter) says inflation is "the topic of the moment"; would be wrong to only think rate cuts are before the Fed; we have to pay attention to inflation rate when price pressures mounting
- Fed balance sheet can be smaller, but unclear it needs to be.
- Open to consider Warsh ideas about changing Fed communications.
Context
Fed's Goolsbee emphasizes the critical nature of inflation in current discussions, indicating that rate cuts should not be assumed to be imminent without considering inflationary pressures. His comments suggest a more cautious approach towards future monetary policy, which could influence rate expectations and impact the USD significantly as market participants recalibrate their outlook on Fed actions depending on inflation dynamics.
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