CHICAGO FED SIGNALS POTENTIAL FOR MULTIPLE 2026 RATE CUTS Chicago Fed President Austan Goolsbee indicated on Tuesday that the Federal Reserve could implement several more interest rate reductions this year. This path depends on inflation resuming its steady decline toward the central bank’s 2.4% target. Recent data shows the annual inflation rate slowed to 2.4% in January 2026, down from 2.7% in previous months. While this marks the lowest level since May, policymakers remain cautious as services inflation is described as not yet tamed. The federal funds rate currently sits at a target range of 3.50% to 3.75% following a pause in January. Markets are pricing in a 90% probability that rates will remain steady at the next meeting on March 18, 2026. Price pressures have eased notably in the energy sector, with gasoline prices falling 7.5% in the latest report. However, food prices remain up 3.1% and natural gas has surged nearly 10%, keeping overall costs elevated for consumers. Goolsbee downplayed recent volatility in consumer price reports, noting that headline figures can be masked by strong service price increases. He emphasized that the Fed needs more evidence of a clear path to its target before moving forward. The labor market remains a key factor in these deliberations. The unemployment rate has stabilized around 4.4%, with January seeing a headline gain of 130,000 jobs. Fed officials view the current economic expansion as solid but are monitoring signs of softening in the tech and manufacturing sectors. A split remains within the central bank. Two governors dissented at the last meeting, favoring an immediate cut to support the labor market. This internal tension suggests that while a pause is the current stance, the door remains open for a pivot later in the year. Investors are now looking toward the March 17-18 meeting for updated economic projections. The "measured and gradual" approach signaled by leadership implies that further easing will likely be back-loaded toward the second half of 2026. [Goolsbee on Rate Cuts](https://www.youtube.com/watch?v=XDznxjCuQWY) This video provides the original interview where Chicago Fed President Austan Goolsbee details the conditions required for several interest rate cuts in 2026. http://googleusercontent.com/youtube_content/0