Fed's Goolsbee sees potential for several rate cuts in 2026

Investing.com -- Federal Reserve Bank of Chicago President Austan Goolsbee indicated on Tuesday that the central bank could implement "several more" interest rate cuts in 2026 if inflation continues its path toward the Fed’s 2% target.

Speaking on CNBC, Goolsbee downplayed a recent weak consumer price report, noting that headline inflation was partly pulled down due to base effects while emphasizing that services inflation is "not tame."

"If we can show that we’re on path to 2% inflation, I still think there’s several more rate cuts that can happen in 2026," Goolsbee said. "But we’ve got to see it" in upcoming economic data.

Goolsbee also pointed out that goods with higher tariffed content have tended to experience larger price increases. He described a 3% policy rate as a "loose" estimate of the neutral rate.

The Chicago Fed president emphasized that policymakers want evidence that inflation is headed back to the 2% target before proceeding with additional rate cuts.

Regarding Fed Chair nominee Kevin Warsh, Goolsbee expressed support, saying he has known Warsh for a long time and is a "big fan" of his from their work together during the Great Financial Crisis.

You May Also Be Interested In