Chicago Fed President Goolsbee ‘a little wary’ about cutting interest rates too quickly

Chicago Federal Reserve President Austan Goolsbee said Friday he’s leery of cutting interest rates too quickly as threats increase both inflation and employment.

In a “Squawk Box” interview on CNBC, the central banker indicated that pressure is coming to both sides of the Fed’s so-called dual mandate of stable prices and low unemployment.

“This uptick of inflation that we’ve been seeing, coupled with the payroll jobs numbers deteriorating, have put the central bank in a bit of a sticky spot where you’re getting deterioration of both sides of the mandate at the same time,” Goolsbee said. “I’m a little wary about front-loading too many rate cuts and just counting on the inflation going away.”

The Federal Open Market Committee voted in September to lower its benchmark interest rate by a quarter percentage point. Participants at the meeting indicated that two more cuts could be on the way before the end of the year.

Goolsbee is a voting member this year on the FOMC.

Though he expressed some concern about both inflation and the jobs picture, he added that data “continues to point to a pretty stable labor market.”

“I believe that the underlying economy can afford rates to come down over time, in a gradual basis, a fair amount from where they are now,” Goolsbee said.