Fed/Goolsbee: Economic uncertainty may prolong the wait for the next interest rate cut longer than expected.

Chicago Fed President Austan Goolsbee stated that he expects interest rates to be “a bit lower” within 12-18 months, but due to economic uncertainty, the next rate cut might take longer than anticipated. In an interview with the Financial Times, Goolsbee expressed that if markets begin to account for higher inflation, he would see this as a “major red flag concern” for policy-making decisions.

Goolsbee emphasized, “In my view, when there’s uncertainty in the air, the ‘wait and see’ approach is the right one.” Earlier this month, Fed policymakers maintained the central bank's benchmark interest rate in the range of 4.25%-4.50%, signaling that they expect to lower rates at some point later this year.