Fed Official Warns of Economic Slowdown, Urges Cautious Approach to Inflation Monitoring and Policy Decisions

In an interview at a European Central Bank conference in Sintra, Portugal, Chicago Federal Reserve Bank President Austan Goolsbee expressed concerns about signs of weakening in the economy. He mentioned that the Federal Reserve’s main goal is to lower inflation without negatively impacting the labor market.

Goolsbee highlighted the importance of monitoring inflation trends to determine if they are moving closer to the Fed’s 2% target. If inflation continues along its current path, he indicated that it could increase confidence in the Fed’s decision-making regarding interest rates. As inflation decreases, Goolsbee noted that Fed policy naturally becomes more stringent. He emphasized the need to only maintain a restrictive policy for as long as necessary to achieve economic stability.

Overall, Goolsbee’s comments suggest a cautious approach to managing economic indicators and policy decisions in order to support the health of the economy and labor market.