Interest Rates

Austan Goolsbee sees ongoing price pressures beyond the Iran war's impact on energy costs, and thinks the Fed shouldn't rule out a rate hike.

The 8-to-4 vote marked the first time since October 1992 that four officials dissented against an FOMC decision.

"While it's true that inflation is less problematic than it was some years ago, hard-working Americans are no doubt feeling it. I think that means a regime change in the conduct of policy."

Some officials worry that the war could hurt the labor market and warrant lower interest rates; others see a risk to inflation that might warrant rate increases.

The core CPI rose from a year ago by the least since 2021, and traders boosted bets that the Federal Reserve will cut interest rates three times this year.

"The January payrolls report lessens the urgency for the Fed to cut rates, but as we expect inflation to ease in coming months, we think policymakers have room to cut rates to support the labor market recovery."