Keeping Policy Tight for Too Long Will Hurt US Jobs, Reports Reuters

Federal Reserve Bank of Chicago President Austan Goolsbee indicated on Sunday that credit conditions in the U.S. are tightening, and while there is widespread speculation about a potential interest rate cut next month, he emphasized that not making this move could negatively impact the job market.

In an interview on CBS’s Face the Nation, Goolsbee remarked, “When you set a rate high like we have and hold it there while inflation falls, you’re actually tightening.” He acknowledged that the economic data presents a combination of positive trends alongside some concerning factors. Goolsbee warned that maintaining excessively tight conditions for an extended period could lead to challenges regarding employment, which is a key aspect of the Federal Reserve’s mandate.