The economic data doesn’t have to change in order to justify interest rate cuts, there just has to be more of it, Chicago Fed President Austan Goolsbee said on Monday.
“If we just keep getting more data like we’ve gotten … we should be well on the path to normalization,” Goolsbee said, in an interview on Bloomberg Television.
The Chicago Fed president wouldn’t get into the timing of the first rate cut, repeating that he doesn’t like “tying our hands” when there are seven weeks of data before the next policy meeting.
Goolsbee noted that there have been seven months of “really quite good inflation reports.”
Tim Duy, chief U.S. economist at SGH Macro Advisors, said Goolsbee is a dove on the Fed and trying to keep rate cuts alive.
However, recent strong fourth-quarter GDP figures and the January jobs report have given Fed hawks ammunition to fend off doves, for now, Duy said.
“It already required something of a leap of faith to preemptively cut rates when the Fed thought the economy would be growing in the 1.5%-2% range and adding jobs around 150,000 per month. It’s much harder if GDP runs at a 3%-4% pace with job growth above 300,000,” Duy said, in a note to clients.
Stocks SPX DJIA were lower Monday while the 10-year Treasury note BX:TMUBMUSD10Y was up to 4.17%.