US Federal Reserve Bank of Chicago president Austan Goolsbee. — Bloomberg
CHICAGO: US Federal Reserve Bank of Chicago president Austan Goolsbee says he is growing more concerned about the labour market than inflation amid recent progress on price pressures and disappointing jobs data.
Goolsbee said current interest rates are “very restrictive”, and would only be appropriate if the economy was overheating.
He declined to comment on how likely or how large a rate cut might be at the US Federal Reserve’s (Fed) next meeting in September.
When asked about the balance between inflation and labour-market risks, Goolsbee said, “It feels like, on the margin, I’m getting more concerned about the employment side of the mandate.”
The comments followed data showing a key measure of underlying annual inflation eased for a fourth straight month, and labour-market figures for July that raised concerns the Fed has been too slow to lower its key policy rate.
While he noted the recent increase in the unemployment rate could reflect more people entering the labour force, it could also be “an indicator that we’re not settling down at steady-state levels, but moving into something that’s, in the short-run, worse.” — Bloomberg
