Oct 3 (Reuters) - Chicago Federal Reserve President Austan Goolsbee on Friday said he was hesitant to commit to a series of interest rate cuts with inflation still running above the central bank's 2% target, echoing the concerns of several of his peers about the persistence of inflation for services.
The Fed, Goolsbee said in an appearance on CNBC, was in "a bit of a sticky spot" with recent data showing an upswing in services inflation while payroll job creation has been weakening.
"You're getting deterioration of both sides of the mandate at the same time," he said. "If the inflation looks like it's going to be transitory - and I say that word with some fear - then I think the employment side of the mandate would be dominant. But ... you see this uptick in inflation and particularly the uptick in services inflation, which is probably not coming from tariffs. I'm a little wary about front-loading too many rate cuts and just counting on the inflation going away."
The Fed cut rates last month by a quarter of a percentage point to a range of 4.00% to 4.25%, and rate futures markets are positioned for two more such reductions at the central bank's remaining two meetings this year. Nonetheless, several of the Fed's regional Reserve Bank presidents have, like Goolsbee, been voicing concern about inflation's persistence and have been reluctant to endorse expectations for a series of rate cuts ahead.
Goolsbee appeared at the time when ordinarily the Bureau of Labor Statistics would have released its monthly report on the U.S. employment situation, but publication has been suspended because of the federal government shutdown that began on Wednesday. All benchmark economic data reports from the BLS, Bureau of Economic Analysis and Census Bureau have been put on hold during the closure.
Job growth has been slowing through the year, in large part because President Donald Trump's crackdown on immigration has stymied the growth of the workforce, but there has been little evidence so far of widespread layoffs and while the unemployment rate has edged up, it remains at a historically low level.
The Chicago Fed recently launched a model that estimates the unemployment rate, and its latest update on Thursday showed the jobless rate in September was likely unchanged at 4.3%.
"Thus far, it continues to point to a pretty stable labor market, in my view," Goolsbee said.
Reporting by Dan Burns; Editing by Andrea Ricci
