Fed’s Goolsbee: Rate Cuts Shouldn’t Serve Debt Costs—Mandate Is Jobs and Prices

Fed’s Goolsbee: Rate Cuts Shouldn’t Serve Debt Costs—Mandate Is Jobs and Prices

Published: July 11, 2025
Category: Economy | Monetary Policy

Goolsbee Pushes Back on Rate Cuts for Debt Relief

Austan Goolsbee, President of the Federal Reserve Bank of Chicago, stated on Thursday evening that the Federal Reserve’s role is not to cut rates to make government debt more affordable. Instead, he reaffirmed that the Fed's dual mandate remains strictly focused on price stability and maximum employment.

“I don't understand the logic behind lowering rates just to make debt cheaper. That’s not our job,” Goolsbee said during a public event.

Core Focus: Jobs and Inflation, Not Fiscal Policy

Goolsbee’s remarks come amid growing speculation that rate cuts could be politically motivated to manage the rising costs of US government borrowing. However, he emphasized that monetary policy should remain independent, driven solely by economic data and the Fed’s statutory objectives.

This reinforces recent comments from other Fed officials, including those in the latest FOMC minutes, where the central bank signaled caution about near-term easing despite inflationary pressures easing.

Outlook: Policy to Remain Data-Driven

With the Fed navigating between cooling inflation and moderate labor market softening, officials like Goolsbee are making it clear that fiscal policy concerns such as debt servicing are outside the Fed’s scope.

Expect the Fed to stay the course unless substantial shifts in employment data or inflation trends emerge in the second half of the year.

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