Fed's Goolsbee: Cautious on rate cuts due to lack of reliable inflation data

On November 6, Fed's Goolsbee stated on Thursday that the lack of official inflation data during the government shutdown has “further highlighted” his cautious stance on further rate cuts. In an interview, Goolsbee said, “My inclination is to be more careful and slow down when the path ahead is still foggy.” Goolsbee pointed out that the Fed still has access to various private data on the labor market, including the Chicago Fed's newly launched biweekly unemployment rate estimate. The latest data indicates that the unemployment rate in October may rise to 4.4%, the highest level in four years. He stated that this estimate and most other labor market indicators show that “the labor market remains quite stable.” “If the labor market starts to deteriorate, we can almost immediately see signs of it.” However, he also mentioned that alternative data sources regarding inflation are very limited. Before the government paused the release of economic data, statistics showed that inflation was showing signs of a rebound. He said, “If inflation becomes a problem, there will actually be no corresponding observational data to reflect that, which makes me more cautious about preemptive rate cuts.” ( Jin10 )