Fed’s Goolsbee spoke to Fox Business Network about the labor market, inflation and the policy outlook:
- Labor market is steady. The inflation side of the Fed’s job is more important.
- Plenty of room for anything on the table as far as rate hike or pause.
- Open to seeing if we get evidence we are heading back to 2% inflation.
- Will not rule out any decision at the next meeting
Analysis: Goolsbee is keeping a hike and a pause on the table, but inflation remains his main concern. Calling the labor market steady suggests he sees room to focus on bringing inflation down. He is willing to assess evidence of progress toward 2%, but these comments do not signal that he has taken another hike off the table.
That follows a more forceful warning earlier this week. On September 29, Goolsbee called five and a half years of above-target inflation “playing with fire” and questioned the logic of looking through supply shocks. He also highlighted refinery capacity as a deeper problem even if crude prices fall quickly. For traders, the distinction matters: lower crude prices could provide relief, but they may not resolve pressure on gasoline and diesel prices. Today’s tone leaves more room to wait for evidence, while his earlier remarks explain why he remains wary of assuming inflation will come down on its own.
For traders, the key is evidence that inflation is moving back toward 2%. A pause would give the Fed time to evaluate that progress; it would not necessarily signal that the inflation battle is won. The comments suggest flexibility on the next decision, with inflation still driving the discussion.
This article was written by Greg Michalowski at investinglive.com.