Chicago Federal Reserve President Austan Goolsbee has expressed concern about the warning signs emerging in the U.S. economy and labor market. Speaking to CNBC, Goolsbee said the rising unemployment trend, along with rising credit card defaults and small business defaults, is troubling.
When problems arise in the job market, they tend to spread quickly, Goolsbee warned.
Despite those concerns, Goolsbee refrained from definitively stating whether the Fed would cut interest rates at its upcoming September meeting. However, he reiterated the Fed’s stance that there was no need to tighten monetary policy further in the absence of an overheating economy.
On the potential scope of a future rate cut, Goolsbee took a flexible stance, saying “everything is on the table.”
Goolsbee also noted that the full impact of past rate hikes may not yet be fully seen. In addition, recent feedback from the business community suggests that tighter credit conditions, along with higher prices, are not being passed on to consumers. These factors further contribute to the uncertain economic outlook.
*This is not investment advice.