Federal Reserve voting member explains why they oppose rate cuts: inflation risks remain too high, cautious wait for more information

On December 12th, Federal Reserve voting members explained why they opposed a rate cut at this month’s policy meeting. Chicago Fed President Goolsbee stated that the reason for voting against the rate cut this week was to wait for more economic data to determine whether the impact of tariffs on inflation is merely temporary. Nearly all business leaders and consumers he has recently interacted with in his district cited prices as their primary concern, so he believes a more cautious approach is to wait for more information. However, Goolsbee remains optimistic that interest rates can be lowered “by a significant margin” next year. Kansas City Fed President Esther George said that inflation remains too high, economic growth continues to be strong, and although the labor market has cooled, it remains generally balanced. She believes that the current monetary policy stance, even if it has a tightening effect, is only slight. Philadelphia Fed President Patrick Harker, who will have voting rights in 2026, stated that the labor market is “under pressure but not collapsing,” and that monetary policy is somewhat restrictive, although recent easing measures will provide some buffer for the job market. The Federal Reserve will assess how developments such as tariffs and artificial intelligence will impact the economy. If the economy experiences high growth driven by AI-driven productivity, the policy response needed will differ from situations where high inflation poses a risk.