Fed's Goolsbee Cautions Against Rate Cuts Amid Inflation Concerns

01:17 PM EST, 02/24/2026 (MT Newswires) -- The Federal Reserve must avoid easing its monetary policy further as inflation remains a key concern among businesses and consumers, Chicago Fed President Austan Goolsbee said Tuesday.

Given the US economy's "solid" growth in 2025 and a largely steady labor market, Goolsbee said the focus for near-term Fed policy decisions should shift back to inflation that remains well above the 2% target.

The Fed's preferred inflation metric, measured by personal consumption expenditures and excluding food and energy, accelerated more than Wall Street's estimates to 3% year over year in December, delayed government data showed last week.

"The fact that over the past several months, the date at which the forecasts say inflation will start falling keeps getting pushed back is not a great sign," Goolsbee said in prepared remarks for a National Association for Business Economics conference in Washington, D.C. "I feel that front-loading too many rate cuts is not prudent in that circumstance."

Goolsbee is an alternate Federal Open Market Committee member this year, meaning he can vote on policy decisions if a scheduled voter is not available.

The FOMC left interest rates unchanged in January after delivering three back-to-back 25-basis-point cuts last year amid concerns about the labor market.

"In every economic survey we have seen and in the many meetings we have had with businesses and consumers across the Seventh District, people express that prices are one of their most pressing concerns," Goolsbee said. "Before we cut rates more to stimulate the economy, let's be sure inflation is heading back to 2%."

Markets widely expect the Fed to keep interest rates unchanged next month, the CME FedWatch tool showed.

On Monday, Federal Reserve Governor Christopher Waller said that continued improvement in the labor market, along with further progress on inflation, would tilt his decision toward a pause in March.

Waller, along with fellow Governor Stephen Miran, dissented from the majority at the Fed's meeting in January, as they both preferred to reduce rates by a quarter percentage point.

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