TechFlow news, according to Jinshi Data, Chicago Fed President Austan Goolsbee said policymakers should cut interest rates if U.S. inflation continues to fall toward the 2% target. In an interview, he stated, "We're on a path toward 2% inflation, and if we keep rates steady while inflation is coming down, that's tightening—so we should make the decision to ease."
Before Goolsbee’s remarks, the Fed’s preferred inflation gauge—the PCE index—rose just 0.1% month-on-month in May, the lowest level in six months. Goolsbee noted that although unemployment remains low, warning signs are emerging in the labor market, and inflation appears to be moving back toward target.
He also mentioned that the Fed has kept interest rates high since July last year and will need to see more evidence that inflation is sustainably heading toward the 2% goal before lowering borrowing costs. Goolsbee will temporarily hold voting rights for the Cleveland Fed president at the July meeting.
