Hawk or dove? US Fed's Goolsbee: I'm a "dog"

With the inflation outlook under the trade war remaining unclear, many US Fed officials are currently waiting for more data before making any decisions on interest rate cuts. On Wednesday, Chicago Fed President Austan Goolsbee described himself as a "data dog," stating that he simply wants to better assess the economic situation.

During an interview on the same day, Goolsbee said that the US Fed is still waiting for more economic data, which will ultimately influence its decision on whether to adjust interest rates.

Earlier, the April CPI report released by the US Bureau of Labor Statistics on Tuesday was generally lower than expected. The data showed that the overall inflation rate in April was 2.3%, while the core inflation rate, excluding volatile food and energy prices, was 2.8%.

This relatively mild inflation report suggests that the most severe concerns about soaring prices due to the White House's tariff policies have not materialized—at least not yet. Much of the anxiety among businesses and consumers stems from a lack of certainty about the economic outlook. When this happens, they tend to cut back on spending.

However, Goolsbee cautioned against being overly optimistic about the inflation data, noting that some components of April's inflation reflected the lagging nature of the data. The US Fed is still observing the situation. Current inflation trends will take some time to be reflected in the data.

"When there's a lot of dust in the air, like what we saw in April, it can lead to a kind of stagnation, and the effects take some time to show up in the data," Goolsbee said.

In April, the US financial market experienced significant turmoil as the new tariff policies implemented by the US Fed and Trump disrupted trade between the US and most of the world. The drastic policy fluctuations led many businesses to adopt a wait-and-see attitude, awaiting clarity on the White House's trade policies.

"I think it's unrealistic to expect businesses or central banks to draw conclusions about long-term trends given the high degree of short-term uncertainty. It's truly a very challenging environment," Goolsbee said.

"People will ask me, 'Are you a dove or a hawk?'" Goolsbee quipped. "I'll say I don't even know if I like birds."

Instead, Goolsbee described himself as a "data dog" who makes decisions based on objective and measurable economic data. He said he is still waiting for more information.

"The first rule of being a data dog is to know when to act and when to observe. When more information is needed, it's time to keep observing," Goolsbee said.

Goolsbee pointed out, "No matter how severe the daily fluctuations are, the US Fed will not pay excessive attention. It's important to remember that at the US Fed, our job is to be a steady hand, not to react to daily fluctuations in the stock market or policy statements. The data we continue to receive at least suggests that things are going okay for now."