Austan Goolsbee said rates may fall if services inflation eases.

Austan Goolsbee said in a Friday interview with Yahoo Finance that while interest rates are likely to decline further, any additional cuts will depend on continued progress in bringing down services inflation.

He described the latest CPI report as mixed, with both positive signals and lingering concerns, noting that services inflation remains elevated and above target. Goolsbee expressed hope that the peak effects of tariffs have passed and pointed to strong January employment data as evidence of a broadly stable labor market with only modest cooling. Although he believes rates could be reduced further, he stressed the need for clearer improvement in inflation before accelerating cuts, warning that persistently high services inflation is a risk.

He added that the U.S. consumer remains the economy’s strongest pillar and should stay resilient if the job market holds steady and inflation eases. If inflation returns to 2%, he said, the Fed would have room to implement several more rate cuts.

Sources: Joshua Gibson