Fed's Goolsbee says central bank needs more 'clarity' before moving on rates

A top Federal Reserve official said that the central bank needs more clarity on inflation before moving on interest rates.

In remarks to the Society for Advancing Business Editing and Writing's annual conference in Chicago, the head of the Chicago Fed also said that three months of poor inflation data could not be dismissed.

"So far in 2024 [...] progress on inflation has stalled," Austan Goolsbee said, according to Dow Jones Newswires.

"Right now, it makes sense to wait and get more clarity before moving."

Goolsbee added that the current level of interest rates was "restrictive", which would keep reining in prices as the economy reverted to its pre-pandemic norms.

Indeed, he was hopeful that inflation would begin to improve again in the months ahead.

But in the short-run, the main problem was persistently high housing costs.

"Looking at market data on rents for new leases, it is supposed to have been falling. If it doesn't it will be hard to see a smooth path back to our 2% target," he explained.

He also believed that the Fed needed to ascertain if economic strength and jobs market "is a sign of overheating driving up inflation."

Goolsbee was not a vote-wielding member of the Federal Open Market Committee in 2024, but would be the last Fed official to discuss monetary policy before the 30 April-1 May Fed policy meeting.

In March, the policymaker had said that three interest rate cuts would be appropriate in 2024.