FED: Goolsbee: "Several Cuts" Conditional On Getting Inflation Back To 2%

In a Yahoo Finance appearance on Friday, Chicago Fed President Goolsbee (not a 2026 FOMC voter but votes in 2027) remained cautious on near-term rate cut prospects in light of this week's employment and inflation reports. Recall he dissented somewhat surprisingly in December against the 25bp rate cut, and he continues to appear reticent to support easing until he sees clearer signs that inflation is headed to target. * On the latest CPI report: "There was an encouraging bit in the in the CPI number today, but there were also still some concerns. I would say it's encouraging that on the food and the energy side, you saw pretty significant improvement in goods inflation, which is where mostly we've seen the impact of tariffs. The new month that came in, the number was okay, and the the more concerning part is we're still seeing pretty high services inflation, which is a thing which tends to be persistent. So we're going to still get a producer price index inflation, and we're still going to get some more information. Let's hope that we've seen the peak impact of tariffs on inflation and that that that part proves to be transitory....if you see inflation well above the target in services, that's a danger sign. And I just want to get some more more information before we start front loading the cuts." * On the latest jobs report: "if you look at the unemployment rate, if you look at a lot of the rate based measures, like the layoff rate is low, while simultaneously the hiring rate is low, that's an unusual combination that doesn't really scream out beginning of recession to me. I thought this month's number... one month is not a trend." * On the prospect for rate cuts given the latest data: "if we could get some more improvement on the inflation side, as I say, I think rates can still keep going down a fair bit more. But we just need to see the progress on inflation, and we need to see that the job market remains steady like like it has been for a couple of months here." * On where rates will "settle": "I don't know how restrictive we are... If you look at core inflation, the new month that that just came in is an annualized rate of 3.6% for core inflation... Let's just be a little circumspect making pronouncements about where rates are going to settle until we're clear that the inflation rate is settling back at 2%. If we're at an inflation rate of 2% then, as I say, I think rates can go down more, even several cuts more from where they are today, but that's conditional on getting inflation back on a path to 2% which, right nowm we are not on a path back to 2% - we're kind of stuck at 3% and that's not acceptable."

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FED: Jefferies Join List Delaying Rate Cut Calls, But Only To April

Jefferies can be added to the list of analysts delaying near-term rate cut calls following this week's data, after CIBC, Citi, Commerzbank, ING, Natixis, TD Securities and Wells Fargo shifted post-NFPs (see pg 9 from our Employment Insight: https://mni.marketnews.com/3OpN1cK). Specifically, Jefferies delayed a cut by one meeting to April vs only ~7.5bp priced. Their summary: * "We had been looking for the Fed to cut rates at the next FOMC meeting in March due to deteriorating labor market conditions and complicit downward trends in the inflation data. However, the January NFP data failed to set off the requisite alarm bells. We noted a number of reasons to be skeptical about the strength of the employment report in our response to the data, but the data is what it is, and it isn't enough to get the hawks on the Committee to change their mind in the next month. We expect that increases in jobless claims in the coming weeks, a softer February report, and continued concern about the labor market in the weeks following will probably be enough to tilt the scales in April, given that the inflation data we are seeing is eroding the hawks' case for keeping policy rates steady."