Fed’s Goolsbee signals multiple rate cuts ahead as focus shifts to employment

Chicago Fed President Austan Goolsbee suggested at an event overnight that Fed will likely implement “many more rate cuts over the next year” as it shifts its focus from inflation to employment concerns.

Goolsbee further noted that a proactive approach is necessary to avoid potential disruptions in the labor market. “It’s just not realistic to wait until problems show up,” he said, highlighting the need for Fed to avoid being “behind the curve” in managing economic risks.

While the timing of the initial rate cut may be less critical, Goolsbee stressed the importance of a “longer-arc view” to ensure favorable conditions for both inflation and employment. He pointed out that “rates need to come down significantly going forward” to maintain economic stability.