Amid inflation remaining above target and a resilient labor market, multiple Federal Reserve officials have recently signaled a lack of urgency to cut interest rates, indicating a further shift towards a "wait-and-see" and patient monetary policy stance.

Chicago Fed President Austan Goolsbee stated on Tuesday that the Federal Reserve should avoid easing policy prematurely while inflationary pressures remain stubborn and the economy continues to expand. Speaking at a conference hosted by the National Association for Business Economics, he noted that core inflation is still hovering near 3%, significantly above the Fed's 2% target. "Inflation staying at 3% is not a safe place," Goolsbee emphasized, arguing that interest rates should not be cut prematurely without clear and sustained evidence of inflation declining.

Goolsbee's comments directly countered recent market expectations that "cooling employment" or "productivity gains from artificial intelligence" might create room for more aggressive easing. He stressed that the current labor market is closer to stability than weakening, with the unemployment rate around 4.3% and having remained largely at that level over the past year, while layoffs continue to be low. The combination of "low hiring and low layoffs" reflects more that businesses are choosing to wait and see amid uncertainty, rather than preparing for a recession.

Regarding economic growth drivers, Goolsbee pointed out that the main support in 2025 will still be consumer spending, not AI-related investment. Although data center construction has attracted widespread attention, its direct contribution to GDP is limited after accounting for imports. He suggested it is unwise to bet prematurely on a significant future productivity boost, a view that contrasts with the White House's position that "AI will allow for faster interest rate cuts without re-igniting inflation."

A similarly cautious stance came from the Boston Fed. Boston Fed President Susan Collins stated on the same day that, given recent data showing an improving labor market while inflation risks persist, interest rates "will likely need to be maintained at the current level for some time." Speaking at a discussion hosted by the Boston Fed, she noted the labor market is showing "an unusual degree of stability" but more evidence is still needed to confirm that inflation is moving sustainably back toward the 2% target.

Collins emphasized that after a cumulative 175 basis points of rate cuts over the past year and a half, the current policy rate is mildly restrictive and may even be "very close to a neutral level"—a range that neither significantly stimulates nor significantly restrains economic growth. In this context, she deemed it reasonable to keep rates unchanged.

Reflecting on the previous policy path, influenced by signs of labor market weakness, Fed officials cut rates by a cumulative 100 basis points in late 2024 and another 75 basis points in late 2025. However, officials chose to hold rates steady last month, and an unexpected dip in the unemployment rate in January has provided room to maintain rates again in March.

Additionally, Richmond Fed President Thomas Barkin noted that while some officials who previously advocated for rate cuts now believe the downside risks to employment have diminished, persistently high inflation remains a concern. He stated that the Fed still faces risks on both sides of its dual mandate, adding that "nobody wants inflation to stall, and nobody wants the labor market to weaken further," but the current policy stance is in a "relatively good place."