Chicago Fed President Austan Goolsbee said Monday that economic data doesn't have to change in order to justify interest rate cuts, there just has to be more of it.
“If we continue to get more data like what we got, we should be on the path to normalization,” Goolsby said in an interview with Bloomberg TV.
The Chicago Fed president did not address the timing of the first rate cut, repeating that he does not like to “tie our hands” when there are seven weeks of data before the next policy meeting.
There have been seven months of “really good inflation reports,” Goolsby noted.
Goolsbee is dove toward the Fed and trying to keep interest rate cuts alive, said Tim Doy, chief U.S. economist at SGH Macro Advisors.
However, Doy said the recent strong fourth-quarter GDP numbers and January jobs report gave Fed hawks ammunition to fend off dovishness for now.
“It actually took something of a leap of faith to preemptively lower interest rates when the Fed thought the economy would grow in the 1.5%-2% range and add about 150,000 jobs per month,” Doy said in a note to clients. GDP is running at 3% to 4% with job growth above 300,000.”
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