Goolsbee says steady jobs market keeps inflation as Fed priority

Chicago Federal Reserve President Austan Goolsbee said that recent employment data suggested the U.S. labour market remained steady, while persistent inflation was still the bigger concern for monetary policy, according to a report by Reuters.

Speaking on Fox Business Network's The Big Money show, Goolsbee said the latest jobs data did not point to a significant deterioration in labour-market conditions, the report stated.

Goolsbee also indicated that the Federal Reserve's policy options remain open as officials assess whether inflation is moving back toward the central bank's 2% target.


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Asked whether the Fed should raise interest rates or pause at its upcoming meeting, Goolsbee said there was still room for different policy outcomes and that policymakers needed more evidence that inflation was heading sustainably toward 2%, according to the report.

The comments come as investors assess the outlook for U.S. interest rates following recent labour-market data and signs that inflation remains above the Fed's target.

Goolsbee's remarks underscore the challenge facing policymakers as they weigh a relatively stable labour market against inflation pressures that could limit the scope for further monetary easing.

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A steady labour market could give the Fed more flexibility to focus on inflation rather than responding to an abrupt weakening in employment, Reuters reported. Policymakers have been closely watching incoming economic data as they determine the appropriate path for interest rates.

The comments also highlight the importance of further evidence on inflation before the Fed makes its next policy decision. A lack of convincing progress toward the 2% target could make officials more cautious about easing policy, even if economic growth and employment show signs of cooling.

(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)