Fed's Goolsbee: likely to leave rates unchanged for now

Today the U.S. January quarterly non-farm payrolls recorded 143,000 people, significantly lower than the market's expected level of 170,000, a record low since last October. Fed Goolsbee spoke on the macro data, said, ‘This was a solid non-farm payrolls report. It looks like we're on the verge of full employment. After recent observations, I am optimistic that tariffs will not end up being a major obstacle to trade. Satisfied with the path of the economy. Tariffs could be a ‘spanner in the works’ in the supply chain. Wage growth is broadly in line with 2% inflation. Long-term market-oriented inflation expectations suggest that the market believes the Fed will keep inflation at 2%.’

‘Currently the Fed is keeping interest rates unchanged, but over the next 12 to 18 months rates will be slightly below current levels. The pace of rate cuts will become slower under greater uncertainty. On the way to achieving our 2 per cent inflation target. We are likely to leave interest rates unchanged for the time being. The neutral equilibrium point for interest rates has fallen. Need to reach stabilisation of rates on a ‘prudent’ timetable. Don't see a role for the Fed in any sovereign wealth fund.’