Chicago Fed's Goolsbee: Uncomfortable with front-loading rate cuts assuming inflation is transitory

Monetary Policy & Inflation - A Kansas City Fed president dissented due to inflation being too high and a largely imbalanced labor market [2] - The speaker has been saying for months that rates will be able to be a fair bit lower than they are today for 2026, but is uncomfortable front loading too many rate cuts and assuming that what we've seen in inflation be transitory [4] - The speaker wants evidence that tariffs coming off next year will cause inflation to fall, as the theory sounds like the argument of 2021's "transitory" inflation [13] - The speaker is one of the most optimistic people for one year from now about how far rates can go down, more than the median in 2026 [15] - The speaker wants to get evidence that inflation is going to be temporary, because there were some disturbing readings on services before the lights went out [17] - The speaker says that inflation has been above the target for four and a half years, and it's rising [20] Labor Market - Most measures of the job market have been pretty stable, and the chance that things in the job market would fall apart rapidly in the within 1 to 2 months before we would revisit this again, feel relatively low [5] - The unemployment rate is ticking up from 4% at the beginning of the year to 4040 basis points [10] - If the unemployment rate is for four and a half or under and stays there stably as long as it's coupled with some of these other rates, the vacancy rate, the hiring rate, the layoff rate, if those show stability [35] Fed Operations - The decision to come back into the market and purchase $40 billion of bills is a technical adjustment, not QE, intended to allow rate control, not to influence monetary policy [27] - The balance sheet is growing, but in an ample reserves regime, it's supposed to be a share of something, a share of bank deposits, a share of GDP [29]