Fed’s Goolsbee “Optimistic” About More Rate Cuts Next Year Despite FOMC Dissent

Chicago Fed President Austan Goolsbee has indicated that he is open to supporting more rate cuts next year. He also explained why he dissented against a Fed rate cut at this week’s FOMC meeting, citing concerns about inflation and the need for it to fall further.

Goolsbee Says He Is “Optimistic” About More Fed Rate Cuts

In a press release, the Chicago Fed president stated that he remains optimistic that interest rates can come down a “significant amount” over the next year. However, he reiterated that his unease is about front-loading rate cuts too heavily and assuming that inflation will be transitory.

Goolsbee further remarked that, given the last several years, getting more evidence first feels like the wiser choice. During a CNBC interview today, the Fed president also said he expects them to make more Fed rate cuts than the 2026 median projection.

As CoinGape reported, the median projection is just one 25 basis points (bps) cut in 2026 following this week’s FOMC meeting. Meanwhile, it is worth noting that Goolsbee was one of three Fed officials who dissented against a rate cut at the meeting.

He and fellow Fed president Jeffrey Schmid dissented in favor of keeping rates unchanged, while Fed Governor Stephen Miran dissented in favor of a 50 bps cut. The Chicago Fed president explained that he believes they should have waited for more data, especially on inflation, before making another Fed rate cut.

Goolsbee further noted that there wasn’t much additional risk with keeping rates unchanged until next year as they await more data on inflation. He also alluded to an improvement in the labor market, which had warranted the first two cuts of the year, which is another reason the Fed president believes they could have held off on another cut at this week’s FOMC meeting.

Schmid Also Defends FOMC Dissent

In a press release, Kansas City Fed President Jeffrey Schmid also defended why he dissented in favor of keeping rates unchanged. He opined that not much had changed since the October FOMC meeting, as the government had just reopened and the flow of official data was just picking up.

Like Goolsbee, Schmid also raised concerns about inflation, stating that it remains too high and the economy continues to show momentum, while the labor market remains largely in balance despite signs of cooling. He added that he views the current stance of monetary policy as being only modestly restrictive, which is why he opted against another Fed rate cut at this week’s meeting.

Fed Chair Jerome Powell, during his FOMC press conference, suggested that inflation could come down next year if there are no new tariff announcements. In line with this, he remarked that he doesn’t think anyone’s base case is a hike, but rather to keep rates unchanged or cut a little.

According to a Bloomberg report, Philadelphia Fed President Anna Paulson also calmed concerns about inflation, stating that she expects it to cool next year. As such, she is more worried about the labor market, which she warned remains at risk of a further downturn.