Don’t Rush to Cut: Fed’s Goolsbee Cautions Against Overeager Rate Cuts

Federal Reserve Bank of Chicago President Austan Goolsbee is pumping the brakes on the widespread expectation of a rapid series of interest rate cuts. In a surprising move that separates him from the broader narrative, Goolsbee has voiced his discomfort with “overly frontloading” rate reductions, pushing back against the idea of consecutive cuts through the end of the year.

This stance creates a notable divide within the Federal Reserve, especially when compared to figures like Stephen Miran, a new appointment by Donald Trump. While the pressure to lower borrowing costs is mounting, Goolsbee points to a key economic strength: a “mostly steady and solid jobs market.” He suggests that this stability gives the Fed room to be patient rather than rushing to ease monetary policy.

Goolsbee’s cautionary view isn’t new; he previously linked the need for higher interest rates to potential inflationary impacts from Trump’s trade policies. His latest comments reinforce his belief that the Fed must proceed with caution, ensuring that any rate cuts are a response to genuine economic need, not political pressure. In a time of shifting economic tides, Goolsbee’s message is clear: when it comes to cutting rates, slow and steady might just win the race.