Fed's Goolsbee signals support for rate cuts amid warning signs from labor market

Investing.comAug 23, 2024 6:38 PM

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Investing.com -- Chicago Federal Reserve President Austan Goolsbee expressed support for interest rate cuts on Friday, citing concerns about high rates amid "warning signs" in the labor market

"Everything we wanted to happen to get rates down has happened," Goolsbee said in a CNBC interview. He argued the current level of interest rates would be appropriate to cool an economy that is overheating, but added, "this is not overheating.

Goolsbee flagged "warning signs" about part of the labor market following July's weaker nonfarm payrolls data, backing the central bank's increased focus on the labor market.

This renewed focus on employment, part of the Fed's dual mandate, comes as inflation is expected to continue declining toward 2%.

"I don't think inflation will get stuck above 2%," Goolsbee said. His comments followed Fed Chairman Jerome Powell's speech signaling potential rate cuts.

"The time has come for policy to adjust," Powell said on Friday during the Kansas City Fed’s annual conference at Jackson Hole, Wyo.

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