Austan Goolsbee

If the tariff inflation is transitory, it's supposed to start going away.

And as soon as we start getting some evidence that we're back on the path to 2%, as I say, I think rates can still keep going down.

And if you look at the SCP dot plot,

A large group of the committee thinks that where rates will eventually settle is still well below where we are today.

It's just we must get inflation down from this 3% level that we've been stalled out at for now a year or more.

I think when I'm out in the seventh district in the Midwest talking to folks, they talk a lot about uncertainty, policy uncertainties, geopolitical uncertainties.

The thing to remember about the tariffs, even if the tariffs stay exactly as they were, just in a different form, the inflation impact is supposed to go away.

So if the rates are lower than what they were before, that should make it even more true that we should see the inflation going down.

I think that the policy uncertainty

We're seeing more on the labor side.

I think the low hiring, low firing environment is what you would expect when there's a lot of uncertainty.

That's not really what the beginning of a recession looks like.

Low hiring with high layoffs, that's what the beginning of a recession looks like.

For both of those to be low is a bit of a weird duck and I think is explained by

a lot of we want to wait and see what's going to happen.

And so if you have question marks coming from the Supreme Court, coming from other policy responses, I think you're likely to see continuation of that low hiring, low firing environment.

What they tend to say is, we want to know what the rules of the road are going to be.

And right now, we don't know what the rules of the road are going to be.

And there could be very significant changes.

And look, I'm sympathetic with that.