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2025-12-12 21:02:47
[Fed Hawks Rarely Draw Their Swords: Biggest Opposition After Rate Cut: Inflation Not Yet Eliminated, What's the Rush?] ⑴ Chicago Fed President Goolsby explained in detail on Friday his reasons for opposing this week's rate cut, arguing that the Fed should wait for more inflation data, especially given that prices remain a major concern for businesses and consumers. ⑵ Goolsby emphasized that inflation has been above target for four and a half years, and the process of controlling inflation has recently stalled. In this context, waiting is a more prudent approach and carries almost no additional risk. ⑶ He pointed out that there are currently few signs of a sharp deterioration in the labor market; it is only "slightly cooling." Therefore, the Fed can wait until early next year to obtain updated data before deciding whether to act. ⑷ Goolsby expressed concern about the root causes of the current high inflation, believing it may stem from tariffs and be temporary, but the danger lies in its potential to persist for a longer period. ⑸ Despite his opposition, he remains optimistic that if future data shows inflation returning to target, interest rates could still fall "significantly" next year, but he is concerned about cutting rates prematurely at this point. (6) This statement reveals the division within the Federal Reserve on the principle of “data dependence”: one side believes there is sufficient evidence to support interest rate cuts to prevent economic risks; the other side (represented by Goolsby) insists on seeing more conclusive evidence of inflation under control, highlighting that combating inflation remains a core priority for some policymakers.
