Federal Reserve Goolsbee: Lack of reliable inflation data, cautious about rate cuts

Mr. Goolsby, the Federal Reserve, said on Thursday that the lack of official inflation data amid the government shutdown "underscored" his caution about further rate cuts. "My preference is to be more careful and slow down when it's still a fog," Mr. Goolsby said in an interview. Mr. Goolsby noted that the Fed still had access to a variety of private data on the labour market, including a new bi-weekly unemployment estimate from the Chicago Fed. The latest data showed that the unemployment rate could rise to 4.4 per cent in October, its highest level in four years. He said that estimate, along with most other labour market indicators, showed that "the job market remains fairly stable". " If the labor market starts to deteriorate, we can see signs almost immediately. "However, he also noted that alternative sources of data on inflation were very limited. Before the government suspended economic data, statistics showed that inflation was showing signs of picking up." If there is a problem with inflation, there are actually no corresponding observations that will reflect it, which makes me more cautious about cutting interest rates early, "he said.