Fed’s Goolsbee Says Fall Decisions ‘Live’ as Inflation Outlook Splits

Chicago Federal Reserve President Austan Goolsbee said the central bank’s rate-setting meetings this fall will be "live," underscoring that officials could shift policy at each gathering as new data arrive. Goolsbee, speaking at a monetary-policy luncheon on 13 August, stressed that policymakers are not committed to a predefined path for interest rates. Goolsbee described the labor market as “pretty solid” but cautioned that emerging warning signs merit close monitoring. On prices, he noted that while the U.S. has logged a couple of months of mild inflation, the latest Consumer Price Index showed a worrisome pickup in services costs unrelated to April’s 145% tariff on Chinese goods. The Chicago Fed chief said the Federal Open Market Committee needs several consecutive months of favorable inflation readings before it can consider reducing rates. If price gains keep trending toward the 2% goal, a pre-emptive cut is possible, he added, but the Fed “will have to act” if inflation moves the other way. Key reports arriving before the mid-September meeting will help determine the next policy step, Goolsbee said. Officials remain prepared to lower borrowing costs, keep them steady, or raise them again depending on how incoming inflation and labor-market data evolve.