Chicago Fed President Goolsbee: "Employment Stable... No Need to Rush Rate Cuts"

Recent Employment Slowdown Not a Sign of Recession
Labor Statistics Indicate Only Mild Cooling

Austin Goolsbee, President of the Federal Reserve Bank of Chicago and known for his dovish stance favoring monetary easing, recently stated that the recent slowdown in employment should not be excessively interpreted as a sign of recession, and cautioned against a premature interest rate cut.

In an interview with the Financial Times (FT) on September 24 (local time), President Goolsbee said, "I am uncomfortable with the idea of moving forward with a large number of interest rate cuts based on the assumption that inflation is probably temporary and will soon disappear."

He added that many businesses in the Midwest region remain concerned that inflation is still not under control.

On September 17, the Federal Reserve lowered the benchmark interest rate by 0.25 percentage points, from the previous range of 4.25-4.50% to 4.00-4.25%. This was the first rate cut in nine months, following five consecutive decisions to keep rates unchanged.

Federal Reserve Chair Jerome Powell explained the background for the rate cut at a press conference, stating, "As downside risks to employment have increased, the balance between inflation risks and employment risks has shifted. Therefore, we judged that it was appropriate to take another step toward a more neutral policy stance at this meeting."

President Goolsbee assessed that real-time labor statistics compiled from various economic reports by the Chicago Fed indicate only mild cooling, and do not signal that the U.S. economy has entered a phase of sharp slowdown.

He stated, "The labor market remains generally stable and solid," and noted that the low unemployment rate of 4.3% and the job turnover rate present a more positive picture than nonfarm employment data, which have been affected by immigration crackdowns under the Trump administration.

President Goolsbee also noted that while the impact of tariffs on inflation may be short-term, inflation has exceeded the Fed's 2% target for four and a half years, and "is now heading in the wrong direction."