Goolsbee: Rate cuts need to wait until inflation subsides; expectations of productivity gains are insufficient to support it

Mars Finance reports that Federal Reserve Governor Goolsbee stated it is premature to bet that productivity gains can lower inflation now; only when inflation decreases would it be appropriate to cut interest rates. He expects a rate cut this year, but only if inflation returns to the Fed’s target level. Goolsbee pointed out that it is unclear whether current interest rates are restrictive, and caution is needed, as early rate cuts could lead to an overheating economy.