Fed's Goolsbee on Inflation Risk, Tariffs and Powell

• Goolsbee views inflation as the primary risk, while the labor market and economic growth are considered 'pretty steady.'
• He is optimistic about the possibility of multiple interest rate cuts in 2026, provided inflation continues its downward trend.
• Tariff-driven inflation is expected to be transitory, but concerns persist if the 2% inflation target continues to be pushed further out.
• Policy uncertainties, including Supreme Court rulings on tariffs, are causing businesses to adopt a 'wait and see' approach, impacting hiring decisions.
• Productivity growth is seen as beneficial for long-term wealth but could also stimulate short-term investment and potentially lead to overheating.

Chicago Fed President Austan Goolsbee expressed greater concern about persistent inflation than the steady job market and economic growth. He remains optimistic about multiple rate cuts in 2026, contingent on continued progress in bringing inflation down to the 2% target. Goolsbee also highlighted how policy uncertainties, such as tariffs, are influencing business decisions.