From CNBC: 2025-05-23 09:30:00

Chicago Federal Reserve President Austan Goolsbee stated that Trump’s tariff threats have complicated policy decisions, likely delaying interest rate changes. Goolsbee sees rates going lower but believes the Fed will wait for clarity on trade policy’s impact on inflation and employment. Trump’s recent call for 50% tariffs on EU products and 25% on non-U.S. made iPhones has further unsettled markets.

Goolsbee, a voting member on the rate-setting Federal Open Market Committee, anticipates solid economic growth in the long run. He remains hopeful that rates could decrease significantly in the next 10-16 months, despite the uncertainty caused by Trump’s tariff announcements. The Fed’s benchmark overnight borrowing rate remains between 4.25%-4.5%, with markets expecting two rate cuts this year.

Amidst the volatility in trade and fiscal policy, Goolsbee remains cautious about committing to a specific course of action. He emphasizes the importance of not tying the Fed’s hands for future meetings. The Fed’s next meeting is scheduled for June 17-18, where officials will update economic and interest rate projections based on the evolving trade landscape. Goolsbee does not rule out rate cuts but stresses the need for stability in employment and inflation.

Read more: Goolsbee says Fed now has to wait longer before moving rates because of trade policy uncertainty