Fedās Goolsbee says āmore sniffingā may be needed before rate cuts
Chicago Federal Reserve Bank President Austan Goolsbee speaks at the Council on Foreign Relations in New York, U.S., February 14, 2024.Ā
Staff | Reuters
āIf you take a broad view, inflation got way above where we were comfortable with and itās down a lot,ā he said.
The first three readings for this year indicate covering the remaining distance to 2% āmay not be as rapid,ā he added.
That āstallingā merits further investigation on the direction of the economy before the Fed moves to cut rates, said Goolsbee, whoĀ is a nonvoting member this year of the rate-setting Federal Open Market Committee.
He described himself as a āproud data dog,ā andĀ pointed to what he says is āthe first rule of the kennel.ā
āIf you are unclear, stop walking and start sniffing,ā he said. āAnd with these numbers, we need to do more sniffing.ā
āWe want to have confidence that we are on this path to 2[%],ā he said. āThatās the thing we have got to pay attention to.ā
Housing inflation is a key area to watch, Goolsbee said.
āThatās the one that has not behaved as we thought it would,ā he said.
Shelter costs, which make up about one-third of the weighting in the CPI, rose 5.7% in March from a year ago.Ā
āThe market rent inflation is well down, but it hasnāt flowed through into the official measure,ā he said. āIf it doesnāt ā I still think it will ā but if it doesnāt, I think weāre going to have a hard time. Itās definitely going to be more difficult to get to 2% overall if we do not see progress.ā
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