Fed’s Goolsbee says ‘more sniffing’ may be needed before rate cuts

“If
you
take
a
broad
view,
inflation
got
way
above
where
we
were
comfortable
with
and
it’s
down
a
lot,”
he
said.

The
first
three
readings
for
this
year
indicate
covering
the
remaining
distance
to
2% “may
not
be
as
rapid,”
he
added.

That “stalling”

merits
further
investigation
on
the
direction
of
the
economy
before
the
Fed
moves
to
cut
rates,
said
Goolsbee,
who is
a
nonvoting
member
this
year
of
the
rate-setting
Federal
Open
Market
Committee.

He
described
himself
as
a “proud
data
dog,”
and pointed
to
what
he
says
is “the
first
rule
of
the
kennel.”

“If
you
are
unclear,
stop
walking
and
start
sniffing,”
he
said. “And
with
these
numbers,
we
need
to
do
more
sniffing.”

“We
want
to
have
confidence
that
we
are
on
this
path
to
2[%],”
he
said. “That’s
the
thing
we
have
got
to
pay
attention
to.”

Housing
inflation
is
a
key
area
to
watch,
Goolsbee
said.

“That’s
the
one
that
has
not
behaved
as
we
thought
it
would,”
he
said.

Shelter
costs,
which
make
up
about
one-third
of
the
weighting
in
the
CPI,
rose
5.7%
in
March
from
a
year
ago. 

“The
market
rent
inflation
is
well
down,
but
it
hasn’t
flowed
through
into
the
official
measure,”
he
said. “If
it
doesn’t
—
I
still
think
it
will
—
but
if
it
doesn’t,
I
think
we’re
going
to
have
a
hard
time.
It’s
definitely
going
to
be
more
difficult
to
get
to
2%
overall
if
we
do
not
see
progress.”