Federal Reserve internal disagreement: Goolsbee opposes rate cuts, advocates waiting for inflation data

【Chain Wen】Recently, the Federal Reserve’s decision to cut interest rates has sparked significant internal disagreement. On Friday, a Fed official publicly opposed it, and this is no small matter—the voting result was 9:3, and he was one of the three dissenters.

Specifically, what is his stance? The official believes that last week’s 25 basis point rate cut was too abrupt. His reasoning is straightforward: it’s not the time to continue cutting rates now, we need to wait. Especially considering the stubborn problem of inflation—above the Fed’s 2% target for four and a half years in a row, and recently stagnating in the past few months.

During visits in his district, almost all the businesses and consumers he talked to were saying the same thing: prices are too high. This actually reflects the true market sentiment. So his conclusion is: instead of rushing to cut rates, it’s better to wait for more data on inflation and the labor market to come out. He advocates setting the timing for further rate cuts at the beginning of next year.

However, he is not entirely pessimistic. He stated that as long as future data shows inflation is indeed approaching the 2% target, he has “reason to stay optimistic”—and by then, next year’s interest rates “could be significantly lowered.” This essentially leaves room for future possible rate cuts.

This stance actually reflects different judgments within the Federal Reserve on the current inflation situation. Some are eager, some are cautious. These disagreements have a significant impact on market expectations.