Fed's Goolsbee Says Future Rate Cuts Depend on Inflation Progress

Chicago Fed President Goolsbee expresses caution on further rate cuts until inflation shows more progress towards 2% target.

Published on Feb. 18, 2026

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Chicago Fed President Austan Goolsbee said policymakers could make several more rate cuts if inflation shows it is headed back to the Fed's 2% target, but he expressed caution that services inflation and core inflation remain elevated. Goolsbee praised President Trump's new pick for Fed Chair Kevin Warsh, with whom he worked during the financial crisis.

Why it matters

The Fed's monetary policy decisions have a significant impact on the broader economy, so Goolsbee's comments provide insight into the central bank's thinking on future rate cuts and the factors they are weighing, such as the pace of inflation and the labor market.

The details

Consumer prices rose 2.4% in January from a year earlier, cooler than December's 2.7% increase. Meanwhile, the U.S. economy added a surprising 130,000 jobs in January, while the unemployment rate ticked down slightly to 4.3%. However, Goolsbee noted that services inflation is not tamed and core inflation came in at around a 3.6% annual rate, which he says is a steadier measure of price increases. Goolsbee said his hope is that the price increases from tariffs are temporary, and if inflation seems to be coming down to the Fed's 2% target, there is room for several more rate cuts.

  • Consumer prices rose 2.4% in January 2026 from a year earlier.
  • The U.S. economy added 130,000 jobs in January 2026.
  • The unemployment rate ticked down slightly to 4.3% in January 2026.

The players

Austan Goolsbee

The President of the Chicago Federal Reserve.

Kevin Warsh

President Trump's new pick for Federal Reserve Chair.

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What they’re saying

“We saw some progress, but we saw some warning, I want to get some more information.”

— Austan Goolsbee, Chicago Fed President (CNBC)

“I think he is a reputable guy, and I look forward to working with him.”

— Austan Goolsbee, Chicago Fed President (CNBC)

What’s next

Investors and economists will get more insight into the Fed's thinking at the January FOMC meeting when the minutes are released on Wednesday.

The takeaway

Goolsbee's cautious stance on further rate cuts until inflation shows clearer progress towards the Fed's 2% target highlights the central bank's careful balancing act as it navigates high inflation and a strong labor market.