Chicago Fed President Austin Goolsbee
- Critical challenge is: Not letting things turn into something worse
- If you look at the Beige Book, you can't look at it as exciting, if anything it was a fair bit downbeat
- It suggests there are warning signs on the economy
- You only want rates to be this high as long as you have to
- We will get a new dot plot, there has been consensus for inflation to come down but not as fast as it's been coming down
- In the dot plot, unemployment was expected to rise but not this fast
- What's most important isn't the next meeting, it's getting it right over several meetings
- Inflation is on the path to 2% and we now need for labor market and GDP to stabilize
- Danger signs are when you see things starting to get worse
- The current employment average is too low for population growth
- I worry the percentage chance of a recession might be rising
- We have a little more tolerance for an upside surprise on CPI as the longer arc shows inflation coming down
Those comments on the dot plot came after a question about more-aggressive easing. So between the lines that was an argument for 50 bps. At the same point, he emphasized that larger cuts were also a question for future meetings.
Fed funds futures pricing is down to 25% for 50 bps.