By Howard Schneider<\/p>\n
WASHINGTON, May 2 (Reuters) – Inflation data last week was “bad news” for the U.S. Federal Reserve and means the Fed needs to be cautious \u200cabout rate cuts until inflation begins to recede, Chicago Fed President Austan Goolsbee \u200csaid on Saturday.<\/p>\n
“We have got to get some assurance that we are going back to the 2% inflation target,” \u200bGoolsbee said on Fox News’ “The Journal Editorial Report,” referring to data last week showing the Personal Consumption Expenditures price index, the central bank’s preferred inflation measure, rose at a 3.5% annual rate in March.<\/p>\n
Goolsbee noted that inflation was rising even in service industries largely insulated from \u200cthe impact of tariffs and rising \u2060oil prices due to the U.S.-backed war with Iran.<\/p>\n
The composition of inflation now “doesn’t look good,” said Goolsbee, who is not a voter on \u2060rate policy this year but dissented against a Fed rate cut in December because of what he saw then as rising inflation risks, which have intensified in recent weeks as the price \u200bof oil \u200bhas risen.<\/p>\n
The Fed at its meeting last week \u200bheld the policy rate of interest \u200csteady in the 3.5% to 3.75% range on an 8-4 vote that was the most divided since 1992. Three of the dissents were against language indicating the Fed’s next move was most likely a rate cut.<\/p>\n
Goolsbee said the split decision showed the potential complications in offering “forward guidance” about the path of monetary policy, in this case prompting dissents from three \u200cofficials who supported the actual rate decision at \u200bthe meeting.<\/p>\n
Asked about current Fed Chair Jerome Powell’s decision \u200bto remain as a Fed governor \u200bafter incoming Fed Chair Kevin Warsh is confirmed by the Senate in \u200cthe coming weeks, Goolsbee said he was \u200bboth glad to have \u200bPowell’s continued input and “excited” for Warsh’s arrival.<\/p>\n
“I like (Powell) quite a lot. I will be happy he is going to switch to a governor’s seat but still be \u200bthere. He has been judicious \u200cand he has insights,” Goolsbee said. He added about Warsh that he was “excited \u200bto see him come in and see what mark he is going \u200bto make.”<\/p>\n
(Reporting by Howard SchneiderEditing by Rod Nickel)<\/p>\n","protected":false},"excerpt":{"rendered":"By Howard Schneider WASHINGTON, May 2 (Reuters) – Inflation data last week was “bad news” for the U.S.…\n","protected":false},"author":3,"featured_media":769119,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[12],"tags":[10852,64,203302,79,241672,19876,75621,85424,67,132,68],"class_list":["post-769118","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-austan-goolsbee","tag-business","tag-chicago-fed","tag-economy","tag-fed-governor","tag-inflation-target","tag-kevin-warsh","tag-u-s-federal-reserve","tag-united-states","tag-unitedstates","tag-us"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/116507384727323192","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/769118","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=769118"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/769118\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/769119"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=769118"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=769118"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=769118"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}