Chicago Fed chief warns against hasty easing amid inflation and jobs uncertainty
Chicago Federal Reserve president Austan Goolsbee voiced concern Friday over the prospect of cutting interest rates too quickly, warning that recent economic data have put the central bank in a “sticky spot” as it tries to balance inflation and employment goals.
“I’m a little wary about front-loading too many rate cuts and just counting on the inflation going away,” Goolsbee said during an interview on CNBC’s “Squawk Box.”
He pointed to a recent uptick in inflation and weakening payroll numbers, which he said have created simultaneous pressure on both sides of the Fed’s dual mandate: stable prices and low unemployment.
“This uptick of inflation that we’ve been seeing, coupled with the payroll jobs numbers deteriorating, have put the central bank in a bit of a sticky spot where you’re getting deterioration of both sides of the mandate at the same time,” Goolsbee said.
The Federal Open Market Committee (FOMC) voted in September to lower its benchmark rate by a quarter percentage point, with two more cuts potentially on the table before year-end.
Goolsbee, a voting member this year, acknowledged that while the labor market data “continues to point to a pretty stable labor market,” the path forward should be gradual.
“I believe that the underlying economy can afford rates to come down over time, in a gradual basis, a fair amount from where they are now,” he said.
The odds of a Federal Reserve rate cut in October have hit 100%, according to the CME FedWatch tool, as mounting economic headwinds and political turmoil sharpen the focus on monetary policy.https://t.co/hjoRJ4CNoM
— Mortgage Professional America Magazine (@MPAMagazineUS) October 2, 2025
Fed officials remain divided on the pace of further easing. Dallas Fed President Lorie Logan, speaking separately at the University of Texas at Austin, echoed Goolsbee’s caution.
“We need to be very cautious about rate cuts from here and make sure that we appropriately calibrate policy so that you don’t ease conditions too much and only to have to reverse course, which would be very painful in terms of restoring price stability,” Logan said.
She flagged persistent inflation and a labor market that, while cooling, remains “fairly balanced.”
Logan emphasized that “policy is likely only modestly restrictive” and warned that “there may be relatively little room to make additional rate cuts.”
The central bank made its first rate cut of the year in September, and new FOMC member Stephen Miran have argued for more cuts in the coming months. However, both Goolsbee and Logan highlighted the risks of acting too quickly.
The ongoing government shutdown delayed the release of September payrolls data, but Goolsbee said staff estimates suggested the unemployment rate remained unchanged, indicating continued labor market stability.
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