Federal Reserve Bank of Chicago President Austan Goolsbee said on Thursday (29) that they could return to a situation where interest rates could fall if tariffs are avoided through a deal or otherwise, according to Reuters.
"If politics drives interest rates, inflation will come back," Goolsbee added, further noting that sometimes central banks have to do what the political apparatus doesn't like.
"Stagflation is the worst case scenario for central banks; that's not what we're facing now."
"This is the direction of stagflation, but it's not stagflation."
Market reaction
The US Dollar Index remained under bearish pressure after these comments and was last seen down 0.45% on the day at 99.45.
The FXStreet Speech Tracker gave these comments a score of 5.4, indicating that they were relatively neutral. Meanwhile, the FXStreet Fed Sentiment Index remained in hawkish territory above 110.00.(alg)
Source: FXstreet
The Bank of Japan held its benchmark interest rate steady and raised its inflation outlook more than expected in a sign it may be closer to a rate hike, while continuing to warn that it's still assess...
Economy is in a solid position.Inflation is somewhat above target.Believe the current stance of policy leaves us well positioned to respond in a timely way.Moderation in growth reflects a slowdown in ...
The Federal Reserve left the federal funds rate steady at the 4.25%–4.50% target range for a fifth consecutive meeting in July 2025, in line with expectations. Policymakers noted that although swings...
Federal Reserve Governor Christopher Waller said on Thursday he continues to believe the U.S. central bank should cut interest rates at the end of this month amid mounting risks to the economy and the...
The emerging divide among Federal Reserve officials over the outlook for interest rates is being driven largely by differing expectations for how tariffs might affect inflation, a record of policymake...
The Australian Dollar (AUD) remains under pressure against the US Dollar (USD) on Friday, giving back most of its earlier gains despite broad weakness in the Greenback following a disappointing Nonfarm Payrolls (NFP) data. The AUD/USD initially...
Oil prices $2 a barrel on Friday because of jitters about a possible increase in production by OPEC and its allies, while a weaker-than-expected U.S. jobs report fed worries about demand. Brent crude futures settled at $69.67 a barrel, down $2.03,...
The yen has suffered a difficult month, but BCA Research thinks the Japanese currency is primed for a multi-year rally. At 08:30 ET (12:30 GMT), USD/JPY traded 0.2% lower at Y150.49, having earlier in the session climbed as high as Y150.91, the...
Annual inflation in the United States (US), as measured by the change in the Personal Consumption Expenditures (PCE) Price Index, rose to 2.6% in...
Asia-Pacific markets traded mixed Thursday as investors assessed the U.S.′ blanket 15% tariffs on imports from South Korea and awaited details on...
According to a report from the US Department of Labor (DOL) released on Thursday, the number of Americans filing new applications for unemployment...
The STOXX 50 dropped 1.1% and the STOXX 600 declined 0.8% on the first trading day of August, which coincided with the deadline for countries to...