Fed Chicago President Goolsbee Sees Possible Rate Cuts Within 18 Months

Chicago Federal Reserve Bank President Austan Goolsbee indicated that U.S. interest rates could begin to decrease within the next 12 to 18 months, contingent on resolving uncertainties related to tariff policies. Despite recent inflation reports being positive and tariffs having limited direct impact so far, Goolsbee remains cautious about the potential transitory effects tariffs may have on inflation. He emphasized that if the economy continues to meet the Federal Reserve's dual mandate of maximum employment and price stability, and if trade tensions ease, the central bank is likely to lower short-term borrowing costs in the near future. Goolsbee described the current period as 'bumpy' due to tariff-related uncertainties but expressed optimism about the underlying economic conditions. His outlook suggests a potential shift towards a less restrictive monetary policy once trade policy risks diminish. This perspective was shared across multiple interviews and discussions in early June 2025.