Fed's Goolsbee (2027 Voter) says we have been above the target for five straight years, via AP Interview
- There are circumstances where rates can go up and circumstances for a hold, or decrease.
- We have to pay attention to inflation expectations.
- His concern is how long this is going to last.
- The longer it last, if inflation stays up, it pushes cuts out of 2026.
- If inflation does not show improvement, time for optimism gets postponed.
- If saw progress on core inflation, he would be feeling better, even if headline inflation was high.
- We will get inflation to 2%.
- Have had good news on housing inflation.
Context
Fed's Goolsbee's commentary suggests a cautious approach to monetary policy, emphasizing that while interest rate hikes are possible, they are contingent upon inflation trends. His focus on inflation expectations indicates that persistent high inflation could delay anticipated cuts, particularly as the Fed aims to align closer to its 2% target. Given this perspective, the market may need to reassess rate path expectations and risk sentiment in response to ongoing inflation data.
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