Still, he cautioned, “With inflation having been over the target for four and a half years in a row and rising, I think we need to be a little careful with getting overly upfront aggressive” with cuts.
“The labor market continues to cool at a sort of a mild to modest pace,” Goolsbee said, describing current policy as “mildly restrictive.”
The consumer price index rose 0.4% in August, pushing annual inflation to 2.9%, the highest since January. Meanwhile, the Bureau of Labor Statistics reported only 22,000 jobs added in August, well below expectations, and the unemployment rate edged up to 4.3%.
Mortgage market watches for Fed signals
The mortgage market has been quick to react to the Fed’s shifting stance. Mortgage rates have edged lower in recent weeks, with the average 30-year fixed rate falling to 6.26%, its lowest since October 2024, according to Freddie Mac. The drop has spurred a surge in refinancing, with nearly 60% of mortgage applications now for refis—the highest share since January 2022.
However, uncertainty remains as some Fed officials, such as Atlanta Fed president Raphael Bostic, have cautioned against further cuts, citing persistent inflation as a primary concern. “I am concerned about the inflation that has been too high for a long time. And so I today would not be moving or in favor of it, but we’ll see what happens,” Bostic said.