Fed's Goolsbee: Rates should go down if conditions are stable and there is no uptick in inflation

In an interview with CNBC on Friday, Federal Reserve (Fed) Bank of Chicago President Austan Goolsbee said if conditions are stable and there is no uptick in inflation, with full employment, rates should go down, per Reuters.

Key takeaways

"Will never complain about 250,000 jobs."

"Still should not over-index on individual job reports."

"Will have to process if retail gains were a strong holiday season or something more general."

"I do not see job market as a source of inflation."

"Current wage growth consistent with 2% inflation given productivity."

"Job market seems stable at full employment."

"Rise in long rates not explained by expected inflation."

"Some component of rise in long rates is from higher than expected growth, and expected slower pace of fed cuts."

"Inflation rate over the last six months was 1.9%."

"12 to 18 months from now rates would be a fair bit lower if current expectations are met."

"Fed does have to think about issues like tariffs, and other nations' responses, that impact prices."

"Issue would be determining if tariffs are a one time shock to prices or a persistent one."

"Once there are concrete proposals, the Fed will have to think about how they impact dual mandate goals."

"The current high annual inflation number is largely reflecting the uptick of early last year; wrong to say there has not been recent progress."

"The reason inflation looks sticky now is because of the jump a year ago."

"Interest sensitive parts of the economy do show the impact of Fed restraint, even if that is offset by things like business confidence."

"So far, I do not see evidence of overheating in recent months."

"It would be a concern if long rates started rising on the basis of inflation expectations."