Federal Reserve Bank of Chicago President Austan Goolsbee has stated that he has not yet made a decision on whether to raise interest rates or halt the rate hikes at the Fed’s next policy meeting in September. Goolsbee emphasized that “nothing is off the table” and that the Fed’s goal is to “stick on the golden path” and bring down inflation without causing a recession.
The Fed recently decided to raise interest rates for the eleventh time since March 2022, with the possibility of two more rate hikes planned for the rest of the year. However, Wall Street is speculating that last week’s rate hike may be the last before rates are held steady in the first half of next year.
When asked about the possibility of skipping rate hikes in September or stopping them if there is positive inflation data, Goolsbee responded that he has not made up his mind yet. He mentioned that there will be important observations on both inflation and the job market before the September meeting.
Goolsbee, who is a voting member of the Fed regional bank, expressed encouragement regarding the latest inflation data. The Fed’s preferred personal consumption expenditures index showed a decrease in inflation from 4.5% to 4.6% in the first half of the year to 4.1% in June, excluding volatile food and energy prices. Goolsbee described this as “fabulous news” and mentioned that he is monitoring monthly readings on core inflation for goods, services, and housing.
He also noted that stable credit conditions have been a positive development. In May, Goolsbee warned about a potential credit crunch, but he now believes that things have calmed down.
Overall, Goolsbee’s comments indicate that the Fed is closely monitoring inflation and economic indicators before making a decision on interest rates in September.
