Chicago Fed President Goolsbee Expresses Caution on Rate Cuts Amid Data Shortage

This analysis is based on the CNBC interview with Chicago Fed President Austan Goolsbee [3] published on November 6, 2025, where he expressed significant unease about front-loading rate cuts due to limited inflation data resulting from the government shutdown. Goolsbee’s comments reflect heightened monetary policy uncertainty as the Federal Reserve approaches its December meeting, with the official indicating he’s “not decided going into the December meeting” and that his “threshold for cutting is a little bit higher than it was at the last two meetings” [2].

Goolsbee’s cautious stance emerges during a critical period for Federal Reserve policy. The Fed has already implemented rate cuts at the last two consecutive meetings, bringing the target range to 3.75%-4% [2]. However, the current environment presents unique challenges due to the government shutdown creating a significant data blackout on key inflation reports, particularly CPI and PCE data that are crucial for policy decisions [1][2].

The lack of reliable inflation data has created substantial uncertainty for policymakers. Core inflation has been running at a 3.6% annualized rate over the past three months [1], and Goolsbee emphasized that inflation has been “above the target for four and a half years, and it’s trending the wrong way” [2]. This data limitation prevents Fed officials from making fully informed decisions about the appropriate policy stance.

Despite inflation concerns, Goolsbee acknowledged the continued strength of the labor market, which remains a key factor in the Fed’s dual mandate. The balancing act between supporting employment and addressing inflation concerns has become more complex without comprehensive economic data [1][3].

The government shutdown has exposed the Federal Reserve’s critical dependency on government economic data for policy decisions. This data blackout represents an unprecedented challenge for monetary policy implementation, as private sector alternatives may not provide the same level of comprehensiveness or reliability as official government statistics [1].

Goolsbee’s comments highlight the increasing difficulty of communicating policy intentions during periods of data uncertainty. His nuanced position - neither committing to nor ruling out December rate cuts - reflects the broader challenge Fed officials face in maintaining transparency while acknowledging information limitations [2][3].

The market response to Goolsbee’s comments has been notably measured. On November 6th, major indices showed modest declines (S&P 500 down 0.48%, NASDAQ down 0.77%, Dow down 0.41%) [0], suggesting investors are processing the nuanced message rather than reacting dramatically to the headline. This measured reaction may indicate market participants’ recognition of the temporary nature of the data constraints.

The lack of inflation data due to the government shutdown is creating significant uncertainty around Fed policy decisions [1][2]. Investors should be aware that this uncertainty could lead to increased market volatility, particularly around the December FOMC meeting.

There is potential for increased market volatility if Fed officials send mixed signals about the December policy path [1][2]. The data limitations may make it difficult for officials to provide clear forward guidance.

Market participants’ ability to accurately assess inflation trends may be compromised without official government data [1]. This could lead to mispricing of assets and inappropriate risk positioning.

The data gap may create opportunities for private sector inflation measures to gain prominence and credibility among market participants [1].

The period of uncertainty may present opportunities for investors who can effectively navigate the information gap and position appropriately for various policy outcomes.

Chicago Fed President Goolsbee’s comments reflect a cautious approach to monetary policy amid unprecedented data limitations. His statement that he’s “not decided going into the December meeting” with a “higher threshold for cutting” suggests the Fed may pause its rate-cutting cycle until more reliable inflation data becomes available [2].

The government shutdown resolution timeline will be crucial for restoring normal policy decision-making processes. Until then, market participants should monitor alternative inflation measures and Fed officials’ statements for additional clues about the December policy direction [1][2].

The measured market reaction [0] indicates that investors are processing the nuanced nature of Goolsbee’s comments, recognizing that his caution stems primarily from data limitations rather than a fundamental shift in economic conditions. However, the extended period of uncertainty could test market patience and increase volatility as the December meeting approaches.