A top Federal Reserve official has warned rate-setters against “lurching” towards new cuts before inflation is fully under control, even as traders grow certain that the US central bank will lower borrowing costs in September.
Austan Goolsbee, president of the Chicago Fed and voter on the central bank’s interest rate-setting committee, struck a hawkish tone on Wednesday, telling journalists the Fed could face a “hard time” in pushing inflation back down to its 2 per cent target.
“The last thing that you want is to have the central bank lurching,” Goolsbee said on Wednesday. “I understand why it’s the business model of the market to process information as rapidly as it comes in. But that’s not in my conception of how the central bank should be operating.”