Inflation still a bigger worry than jobs, says Fed’s Austan Goolsbee

Federal Reserve Bank of Chicago President Austan Goolsbee said he wants to see more data before making a decision about how to vote at the central bank’s December meeting, but warned he’s more concerned about inflation than the labour market right now.“I’m not decided going into the December meeting,” Goolsbee said Monday on Yahoo Finance. “I am nervous about the inflation side of the ledger, where you’ve seen inflation above the target for four and a half years and it’s trending the wrong way.”

Policymakers, including Goolsbee, voted to lower their benchmark interest rate by a quarter percentage point at their October 28-29 meeting, their second straight reduction as they try to bolster weakened hiring in the labour market.
In a press conference following the meeting, Chair Jerome Powell cautioned that another cut at the December meeting, which markets had been betting on, wasn’t set in stone. Some policymakers have become increasingly concerned that inflation, which was 3% in the year through September, isn’t cooling to the Fed’s 2% target quickly enough and that a strong economy could reignite price pressures.Goolsbee added that he still believes interest rates can come down a “fair amount” but “it would probably be most judicious to have the rates come down with inflation.”