The president of the Federal Reserve Bank of Chicago, Austan Goolsbee, on Friday explained his vote against the Fed's latest rate cut, saying that it would have been more prudent to wait for more economic data, notably on inflation. Although he says that he is optimistic about a significant decline in rates in 2026, Goolsbee deems it premature to string together further easing while inflation has remained above the 2% target for over four years.
In a CNBC interview, he stressed that the last six months had shown "no progress" on inflation, particularly in services, and criticized the idea that it would be merely transitory. He thus joined Jeffrey Schmid (Kansas City Fed) and Stephen Miran (governor), the two other FOMC members who voted against this week's 25bp rate cut. Goolsbee, who supported the previous cuts in September and October, now believes caution is warranted.
In a statement released by the Chicago Fed, he said that most business leaders and consumers in his district cite prices as their main concern. He believes that the Fed should have waited at least until the first quarter of 2026 before continuing monetary easing. Regarding employment, Goolsbee says that the labor market remains "rather stable," in contrast with other officials such as Jerome Powell, who mentioned possible downward revisions. Other dissenting voices also spoke out: Jeffrey Schmid deems current policy "barely restrictive," while Anna Paulson (Philadelphia Fed), a future voter, says she is more concerned about unemployment than inflation.
