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Forbes
Forbes
10 Apr 2025


The Federal Reserve does not have a standard monetary policy blueprint to follow in response to President Donald Trump’s tariffs, said one of the U.S.’ top monetary policy decisionmakers Thursday, as the central bank grapples with heightened economic uncertainty and direct calls from Trump to lower rates.

Chicago Fed President Austan Goolsbee Speaks At Midwest Agriculture Conference

Austan Goolsbee, president of the Federal Reserve Bank of Chicago, shared light on how the central ... More bank is digesting Trump's tariffs.

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Federal Reserve Bank of Chicago President Austan Goolsbee told the Economic Club of New York early Thursday afternoon there’s no “generic playbook” to follow, explaining higher inflation expectations and potential labor market weakness work against each other in terms of deciding whether to move interest rates.

“The Fed’s timetable is not the market, stock market’s timetable,” said Goolsbee, who is one of the 12 voting members of the Federal Open Market Committee that sets the target federal funds rate, nodding to the extensive turbulence across equities as investors digest Trump’s tariffs.

There’s a “fundamental fear” among Chicago area business leaders that inflation could continue on the same trajectory as 2021 and 2022 during which inflation peaked at a four-decade high, said Goolsbee.

But Goolsbee said he believes the central bank will still lower rates in the next “12, 18 months.”

“Sometimes the Fed has to do the hard job,” Goolsbee added.

4.25% to 4.5%. That’s the target federal funds rate range, where it’s stood since December. Though that’s down 75 basis points from the 2024 apex, it’s higher than it ever was from 2008 to 2022 as the central bank grappled with four years of higher than ideal inflation.

A day after the S&P 500 booked its biggest single-day gain in 17 years as Trump paused some of his levies, stocks lost much of their gains Thursday, as the S&P fell 5% by early afternoon. The index is down 9% since Trump escalated his trade rhetoric last Wednesday.

This is a breaking news story and will be updated…