Chicago Fed’s Goolsbee Urges Caution on More Rate Cuts Amid Data Blackout
Chicago Federal Reserve President Austan Goolsbee is urging caution on further interest rate cuts, warning that the ongoing government shutdown has left the Fed “flying blind” without access to key inflation data. In an interview with CNBC, Goolsbee said the lack of official reports like the Consumer Price Index (CPI) and Personal Consumption Expenditures (PCE) makes it difficult to accurately gauge inflation trends, adding that the central bank should avoid “rushing into major policy moves based on assumptions or partial data.”
Goolsbee, who is typically moderate on rate policy, pointed out that while inflation had slowed to 3% year-over-year in September, core inflation was still running near 3.6% before the data blackout—suggesting that price pressures hadn’t fully eased. “When it’s foggy, the best approach is to slow down,” he said, emphasizing that moving too aggressively on cuts could risk reigniting inflation.
Recent data from the Chicago Fed’s labor market dashboard shows stability, with unemployment holding at 4.36% in October and hiring activity remaining steady. That gives policymakers room to pause after two rate cuts this year, which brought the federal funds rate to between 3.75% and 4.00%. Still, Goolsbee cautioned that without fresh inflation readings, “there’s a risk of either over-tightening or over-easing, and both come with consequences.”
His remarks come as the Federal Open Market Committee (FOMC) prepares for its December meeting, where members will decide whether to issue another rate cut. Goolsbee, who currently has a voting seat, said he expects interest rates to trend lower over the medium term but insists that any future adjustments must be guided by reliable data, not speculation.
With the shutdown stalling official reports, the Fed is increasingly depending on private data and regional surveys—a limited substitute for federal statistics. For now, Goolsbee’s message is clear: the Fed must prioritize prudence over speed until the full economic picture comes back into view.
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