Shift in Focus at the Fed: From Reducing Inflation to Balance

The recent September jobs report has dampened investors' expectations of a 50 basis point rate cut by the Federal Reserve at the November meeting. Austan Goolsbee, President of the Federal Reserve Bank of Chicago, expressed caution regarding concrete rate cut paths in an interview with Yahoo Finance. This is due to the multitude of data to be released before the next meeting and his desire to consult with his colleagues. Goolsbee emphasized that the Fed is currently in a transitional phase. In a conversation with Jennifer Schonberger of Yahoo Finance, he stated that the most challenging task for a central bank is to get the timing right in such moments. Currently, the Fed is shifting from an almost exclusive focus on reducing inflation to a more balanced approach. For guidance on the Fed's neutral interest rate, Goolsbee referred to the 'Dot Plot' from the Federal Open Market Committee's summary of economic projections. However, he warned that external shocks such as labor disputes and geopolitical tensions could affect the Fed's plans, as such events have often prevented a soft landing in the past.