Federal Reserve Bank of Chicago President Austan Goolsbee said he is still unsure what the Fed will do at its next meeting after it pushed interest rates to a 22-year high during its July meeting.
“I’m open to reading the data. If there’s a major change of conditions, I haven’t made up my mind for what should happen in September,” he said during an interview with Yahoo! Finance.
Goolsbee noted “nothing is off the table.”
The Fed hiked its baseline interest rate range by 0.25 percent last week, from 5.25 to 5.5 percent, marking its 11th interest rate hike since March 2022.
Despite being undecided on another rate hike in the September meeting, Goolsbee said the Fed is on the “golden path” — bringing inflation down “without causing a major recession.”
“That effort to get inflation down, thus far, is working,” he said. “And if we can do that without generating a major recession, that’s a big achievement for the Fed.”
Goolsbee also responded to economists who argue unemployment must rise for inflation to come down, saying the past six months have proven that idea wrong.
“This business cycle was so sufficiently strange and sufficiently unusual, that I don’t think that the normal rules of a direct tradeoff between unemployment and inflation necessarily have to apply,” he said. “They certainly have not applied in the last six months.”
While Goolsbee expressed concerns about a tightening in the credit market, he said that’s “been the dog that has not been barking,” citing stabilization in the banking sector and rising deposits.