Federal Reserve Bank of Chicago President Austan Goolsbee suggested that interest rate reductions could be justified if the U.S. economy continues to cool without signs of overheating. Speaking on Monday, Goolsbee highlighted the importance of carefully monitoring economic data to ensure monetary policy adjustments align with a slowing inflation trend and stable growth.
While inflation remains above the Fed’s 2% target, Goolsbee pointed to evidence that the labor market is easing, and consumer spending growth has moderated. He noted that cutting rates could avoid unnecessary tightening risks if economic conditions warrant it. However, Goolsbee emphasized caution, stating rate cuts should proceed only if overheating risks remain subdued, signaling a continued reliance on data-driven decisions.
The remarks reinforce speculation that the Fed might pivot toward a more accommodative stance in 2024. Goolsbee’s comments reflect a growing debate within the central bank over how to balance inflation control with sustaining economic momentum.
