Fed Divided: Goolsbee Dissents on Rate Cut While Paulson Eyes Job Risks

The Federal Reserve is currently facing a division regarding its rate policy. Following a recent FOMC decision that voted 9-3 in favor of a 25 basis point cut, the comments from officials Goolsbee and Paulson have drawn significant attention. Goolsbee argues for a more cautious approach due to persistent inflation above target levels and suggests that the Fed should wait for more comprehensive data before making further cuts, emphasizing that the economy remains stable. He believes it would be prudent to wait until early 2026 to adjust rates again, pointing to stable growth and a solid labor market. Conversely, Paulson focuses on the balance between employment and inflation, indicating that the job market is 'bending, but not breaking.' She views current policy as somewhat restrictive and sees potential for inflation moderation approaching next year, notably attributing much of the current inflation to tariffs. The differing views of these Fed officials underscore the complexities facing policymakers as they prepare for the upcoming January meeting.