Chicago Federal Reserve President: If trade uncertainty is eliminated, the Federal Reserve can advance the rate cut process
Chicago Federal Reserve President Austan Goolsbee stated that if trade uncertainties are resolved, the Federal Reserve could advance the rate-cutting process. He believes that the fundamentals of the U.S. economy are good, the labor market is strong, and inflation data is performing well. Goolsbee has a dovish stance within the Federal Open Market Committee and expects that the Federal Reserve's policy rate may be significantly lowered in the next 15 months. The Federal Reserve will hold a policy meeting on June 17-18, and investors expect rates to remain unchanged
According to the Zhitong Finance APP, Austan Goolsbee, President of the Chicago Federal Reserve, stated that the fundamentals of the U.S. economy are good, and if the uncertainty surrounding trade policies is resolved, the Federal Reserve can advance the process of interest rate cuts. Goolsbee said on Monday, "I still believe that if we can get through this rough patch, our dual mandate looks good. I think we may be on the right track." It is reported that Goolsbee has voting rights on monetary policy this year and holds a dovish stance in the Federal Open Market Committee (FOMC).
After implementing a series of interest rate cuts at the end of 2024, the Federal Reserve has remained on hold this year. Policymakers are cautious about taking further actions in the short term, emphasizing that the risks posed by President Trump's comprehensive tariff measures to their inflation and employment objectives are rising.
Goolsbee pointed out that if the U.S. economy continues to maintain its current momentum and the tariff measures of the Trump administration ultimately turn out to be less aggressive than initially announced, the Federal Reserve's policy rate is "very likely to be significantly lowered" in the next 15 months.
Goolsbee stated that the labor market remains strong, and the latest inflation data is also performing well. He said, "What I want to say is that the data released so far has almost no direct impact. We do not know if this will still be the case in the next month or two." Goolsbee admitted that, given the experiences during the pandemic, he is hesitant to assert that the impact of tariffs is only temporary.
The Federal Reserve will hold a policy meeting on June 17-18. Futures market data shows that investors are betting that the Federal Reserve will keep interest rates unchanged at the meetings in June and July, and then restart interest rate cuts later this year
