Fed Governor Goolsbee said he is open to the possibility inflation could return
to the 2% target and would not oppose rate cuts if there is convincing evidence
of a sustained decline toward 2%. But he warned that if inflation fails to
retreat, policymakers will need to raise rates. He added the labour market is
not the problem now but inflation is, and said he could accept the view that
current inflation stems from a fading supply shock—provided there is evidence
the shock is abating; otherwise action will be required.
