Federal Reserve Bank of Chicago president 'a little uneasy' with big interest rate cuts

Federal Reserve Bank of Chicago President Austan Goolsbee says he’s “a little uneasy” with big interest rate cuts at the moment, ahead of his vote during the Fed’s next meeting at the end of the month. “I still think we’re going to end up with rates down a fair amount from where they are now,” Goolsbee said on WISN 12’s “UPFRONT,” which is produced in partnership with WisPolitics. “The question of does that mean we should frontload and do all the cuts immediately while inflation is going the wrong way? Inflation is rising. We’ve been four-and-a-half years above 2%, which is what the Fed has said, we want to get to 2%. We’ve been four, four-and-a-half years now, above two, and it’s drifting up. So I’m a little uneasy saying, hey, let’s just start doing all the cuts now.””Our task by law at the Fed is to maximize employment and stabilize prices,” Goolsbee added. “That’s our sacred dual mandate we call it, and that’s all we’re supposed to be thinking about. We’re definitely not supposed to be thinking about what the politicians say. There’s nothing in there that says make sure the stock market is happy. None of that is on there. It’s to maximize employment and stabilize prices, and people take it very seriously.” Goolsbee, a voting member on the Federal Open Market Committee, which sets interest rates, oversees the district that includes parts of Wisconsin, Iowa, Illinois, Indiana and Michigan. Recently, he visited Wisconsin, touring companies like SC Johnson and Molson Coors. “I was very interested when we made this trip to Molson Coors and SC Johnson, trying to understand how are tariffs and how is the supply chain is holding up when there are a lot of pressures coming at it, and where are we in the business cycle?” Goolsbee said. “Does it feel like there might be layoffs? Does it feel like people are hiring? What’s going to be happening with inflation and prices?” President Donald Trump has publicly pressured Federal Reserve Chairman Jerome Powell to lower interest rates faster. “The first thing that goes through my mind is that person’s not on the FOMC,” Goolsbee said. “If you go to the FOMC meeting, the law tells us what we’re supposed to be listening to. Anybody not in the committee can have an opinion, and I try to embrace and explore the arguments that they’re making, but a world in which there can be political interference from a sitting administration with what the interest rate should be, that’s a big mistake. That’s the nature of central bank independence.” Goolsbee said the committee will be “flying blind a little bit most likely” at the next meeting, given the government shutdown.”We aren’t getting any data from the government because the government is shut down,” he said. “It amps up the intensity of the meeting, I would say.” GOP Rep. Scott Fitzgerald says he supports backpay for federal workers impacted by the federal government shutdown after President Trump indicated he may not back a plan for all workers. “Yeah, I think if you’re a furloughed employee, absolutely,” Fitzgerald said. “There’s kind of different set-ups for who’s working full-time and who isn’t, but yeah, I mean, all that’s going to have to be addressed at the end. I think it’s something that Congress has agreed on for many years. So we’ll wait, if this drags into November, though, good God, I just can’t imagine that we aren’t going to do something to address some of these specific issues related to the shutdown.” Fitzgerald put pressure on Democrats who are demanding that subsidies as part of the Affordable Care Act be extended as part of a deal to reopen the government.”The CR, it’s such a layup at this point,” Fitzgerald said. “Let’s get to Nov. 21. If you want to have a discussion about healthcare, let’s have that discussion. It’s a massive, complex issue that touches all Americans, and if they think we’re going to be able to sit at a table and negotiate something related to healthcare under the duress of a government shutdown, they’re just out of their minds.” “I’m all ears,” Fitzgerald added when asked if he would vote to extend subsidies. “It’s something I think that has been frustrating for many of us who have watched the discussion, and I wasn’t necessarily part of that, but we can talk about Medicaid, Medicare, we can talk about all of it if you want. But in the meantime, the idea that there’s going to be government employees that are not going to be paid this week and the troops, as you referenced, it’s just outrageous that they think this is the best path forward.” State Sen. Dianne Hesselbein, the Democratic minority leader, says she won’t endorse in the primary for governor as she works to flip the state Senate in 2026.”I have too many friends in this race,” Hellselbein said. “I serve with a lot of them, as I just mentioned, and I think a lot of them bring things to the field. I’m looking forward to this primary and see what all of what their vision is for the state of Wisconsin.” Hesselbein, though, argued the candidate at the top of the ticket is important as Senate Democrats look to flip at least two seats currently held by Republicans.”What we’ve been told time and time again by a lot of people is the Senate Democrats are the most flippable chamber that we’re going to have in the entire United States,” Hesselbein said. “Phone calls keep coming, the entire country, in the entire country, people are telling us this is the most hopeful chamber in the entire country.” Hesselbein dismissed the notion Democrats would need to win Trump or swing voters in the state senate districts they’re targeting. “I believe we’re going to be sticking to our core message and making sure that Democrats are comfortable because we have a policy agenda,” she said. “We have the people that are going to be doing a great job.”