Fed’s Goolsbee Supports Rate Cuts After Cautioning That Some Economic Data Is ‘Flashing Yellow’

Chicago Federal Reserve President Austan Goolsbee expressed his support for interest rate cuts on Friday, citing several economic indicators such as rising unemployment and restrictive credit conditions that he described as “flashing yellow.”

Goolsbee emphasized that easing credit conditions would be beneficial, stating, “If we move toward less restrictiveness, it will help ease some of these credit conditions.” He elaborated on concerns regarding the increase in small business defaults and noted that rising unemployment serves as a significant warning sign.

The Chicago Fed president acknowledged that the effectiveness of lower rates would rely on various factors but indicated a preference for a “gradual” approach to rate cuts rather than a rapid one.