Inflation and Unemployment to Dictate Monetary Policy

United States Federal Reserve Bank of Chicago President Austan Goolsbee recently shared insights on the central bank's future monetary policy, indicating that inflation and unemployment rates will be the key determinants. Speaking to CNBC, Goolsbee predicted a "judicious amount" of policy loosening by 2025.

Goolsbee emphasized that while inflation is trending towards the target of 2%, there remains "more uncertainty noise." He highlighted the stability of the labor market and the necessity to maintain this by adjusting interest rates to a "neutral" level, which he noted is still some way off.

The Fed President reaffirmed the institution's commitment to processing incoming data and economic projections before making new policy decisions. Goolsbee also mentioned the need to consider the impact of President-elect Donald Trump's future administration on inflation and employment.