Chicago Federal Reserve President Austan Goolsbee has outlined why he opposed this week’s interest rate cut, saying policymakers should have waited for clearer evidence before easing monetary policy further.
Speaking to CNBC, Goolsbee said he remains optimistic that interest rates can decline meaningfully by 2026.
However, he emphasised that current economic data did not justify front-loading rate reductions.
“I’m pretty optimistic that for 2026 rates will be able to be a fair bit lower than they are today,” he said.
“But I’ve just been uncomfortable front-loading too many rate cuts and assuming that what we’ve seen in inflation will be transitory.”
Goolsbee was one of three Federal Open Market Committee members to vote against the latest quarter-point cut.
Kansas City Fed President Jeffrey Schmid and Governor Stephen Miran also dissented, although Miran had preferred a larger cut rather than no cut at all.
Recent inflation readings have kept the annual rate near 2.8%, far above the central bank’s 2% target.
Goolsbee pointed to the lack of progress over recent months as a reason for caution.
“There’s no way around we’ve been four and a half years above the inflation target, and the last six months have shown no progress,” he told CNBC.
He highlighted that before the government shutdown, several metrics pointed to concerning levels of services inflation.
“I just want to make sure that if we believe that this is transitory, let’s not just put all our eggs in,” he said.
Goolsbee said his decision was consistent with his view that policymakers should wait for more information.
“While I voted to lower rates at the September and October meetings, I believe we should have waited to get more data, especially about inflation, before lowering rates further,” he wrote in a post on the Chicago Fed’s website.
Although he will not be a voting member of the FOMC in 2026, he will still attend policy discussions.
He reiterated that inflation remains a top concern among businesses and households.
“Given that inflation has been above our target for four and a half years, further progress on it has been stalled for several months, and almost all the businesspeople and consumers we have spoken to in the district lately identify prices as a main concern, I felt the more prudent course would have been to wait for more information.”
Goolsbee acknowledged that some officials have expressed concern about the weakening labour market.
However, he said the data still shows broadly stable conditions.
“We don’t take a lot of extra risk, in my view, to just wait to Q1 2026, and make sure that we’re back on path at 2% inflation,” he added.
The FOMC voted this week to lower its benchmark interest rate to between 3.5% and 3.75%.
Fed Chair Jerome Powell has expressed concerns that underlying hiring data may be weaker than headline figures currently suggest.
Schmid, who also dissented, said inflation remains too high and the economy continues to show resilience.
“I view the current stance of monetary policy as being only modestly, if at all, restrictive,” he said.
Philadelphia Fed President Anna Paulson and Cleveland Fed President Beth Hammack also expressed differing views, showing the broad divide inside the central bank.
In total, six of the 19 Fed participants indicated they opposed the cut, although only two had voting rights.
