Chicago Fed President Austan Goolsbee hinted on August 5 that the central bank may make an emergency rate cut in the face of signs of economic weakness. He mentioned that current interest rates may be too high and believed that recent labor market and manufacturing trends may require a reassessment of Fed policy. At the same time, Goolsbee emphasized that the central bank will remain forward-looking and flexible in responding to changes in economic conditions, although current economic data do not show formal signs of recession.

Key Points

- Austan Goolsbee pointed out that the Fed may consider an emergency rate cut due to economic weakness.

- Recent economic data show that current interest rates may be too high and may need to be adjusted.

- Goolsbee emphasized that the Fed's mission is to maximize employment, stabilize prices and maintain financial stability.

- With the weakening labor market data, the Fed needs to reassess its policy stance.

- Positioning markets are expecting a Fed rate cut, with a 50 basis point rate cut expected today.

- Due to the decline in inflation, the actual federal funds rate has risen to about 2.73%.

- Goolsbee said that all policy options, including rate hikes and rate cuts, will be seriously considered.