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The Federal Reserve's Goolsbee: If tariffs do not lead to high inflation, rate cuts will resume.
The Federal Reserve's Goolsbee said there has been a lack of significant inflationary pressures since Trump imposed tariffs on April 2, which could allow the Fed to cut interest rates again. He recalled that the Fed was expected to lower interest rates at the beginning of the year and paused them, mainly because of policy uncertainty. Goolsbee stated: If we do not see the inflation caused by these tariff hikes, then in my view, we have never left the golden path I mentioned before April 2nd. He likened the tariffs to throwing a lot of dust into the air, making it difficult to see if you are still on the path. If there is no dust in the air, then I think we should proceed (with a drop in interest rates). (Jin Shi)