rewrite this title Fed’s Goolsbee sees ‘note of unease’ as central bank looks to next interest rate move

Federal Reserve President Austan Goolsbee said Friday a mixed bag of inflation data this week coupled with lingering uncertainty over tariffs have given him some hesitation about lowering interest rates.

Previously, Goolsbee has spoken of a “golden path” that would combine moderating inflation and a stable labor market and lead to lower rates.

But in a CNBC interview Goolsbee said he still wants to see some more convincing data before the Federal Open Market Committee meets on Sept. 16-17. Goolsbee is one of 12 FOMC voters this year.

Reports this week on consumer and producer prices “put in a note of unease” on where inflation is headed, as services prices “which are not obviously going to be transitory” are “kicking up,” he said.

“So I feel like we still need another [inflation report], at least, to figure out if we’re still on the golden path,” Goolsbee said during a “Squawk Box” interview.

The July consumer price index was relatively in line with market forecasts, though the core reading that excludes food and energy nudged higher to 3.1%, a bit above Wall Street expectations. However, the July producer price index, which measures wholesale items, posted a surprisingly high 0.9% monthly gain that was the largest in about three years.

The data is being examined particularly closely for clues about the impact tariffs are having on inflation. While neither report showed significant obvious impacts, many economists believe the import duties President Donald Trump has imposed are slowly making their way into the data and will show up in coming months.

“It all depends on the data and what’s the economic outlook. If we keep getting inflation reports like [previous] ones … I would be very comfortable that, hey, the dust is out of the air, it looks like we’re still where we were, which is a strong economy with inflation coming back down,” Goolsbee said.

“In that circumstance … the right thing to do [is] to just bring the rates down to where we think they’re going to settle,” he added. “We’ve got to get some clarity from the numbers.”

Markets are placing a near certainty that the FOMC votes to lower the benchmark federal funds rate by a quarter percentage point in September, from the current 4.25% to 4.50% level. However, there are some misgivings about what happens from there, with 55% odds of another reduction in October and just a 43% probability of a third move in December, according to the CME Group’s FedWatch.