Fed’s Goolsbee Says He’s ‘Even More Uneasy’ About Cutting Rates Amid Lack Of Inflation Data Due To Government Shutdown: Report

• During an interview with CNBC, Goolsbee expressed concerns that policymakers will not have enough visibility about prices during the shutdown.
• He added he leans more to the side of being “a little careful” and slowing down when the visibility is “foggy,” referring to the lack of inflation data.
• The Chicago Fed President added that he is worried about core services inflation edging up, stating that this is a more persistent form of inflation.

Federal Reserve Bank of Chicago President Austan Goolsbee reportedly said on Thursday that the lack of inflation data due to the ongoing U.S. government shutdown makes him “even more uneasy” about cutting rates.

During an interview with CNBC, Goolsbee expressed concerns that policymakers will lack sufficient visibility into prices during the shutdown. He added that there are fewer private sector sources of inflation data than there are for the labor market.

“If there are problems developing on the inflation side, it’s going to be a fair amount of time before we see that. That makes me even more uneasy.”

— Austan Goolsbee, President, Federal Reserve Bank of Chicago

Goolsbee added he leans more to the side of being “a little careful” and slowing down when the visibility is “foggy,” referring to the lack of inflation data.

What’s Worrying Goolsbee?

The Chicago Fed President added that he is worried about core services inflation edging up, stating that this is a more persistent form of inflation. Service prices, excluding energy services, rose 3.5% for the year through September, according to the Consumer Price Index (CPI) report from the Bureau of Labor Statistics.

Overall, the annual inflation rate stood at 3% in September.

Labor Market

According to a report published on Wednesday by payroll processing firm ADP, U.S. companies added 42,000 jobs in October, registering the first month of gains since July, when more than 104,000 jobs were added.

Meanwhile, U.S. equities declined in Thursday morning’s trade. At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was down 0.87%, the Invesco QQQ Trust ETF (QQQ) fell 1.47%, while the SPDR Dow Jones Industrial Average ETF Trust (DIA) declined 0.74%. Retail sentiment around the S&P 500 ETF on Stocktwits was in the ‘bearish’ territory.

The iShares 7-10 Year Treasury Bond ETF (IEF) was up 0.46% at the time of writing.

Also See: Will Tesla Shareholders Approve Elon Musk's Compensation Package? Here's What Prediction Markets Think

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