Chicago Fed's Goolsbee: Rate Cuts May Be Delayed Until 2027 If High Oil Prices Persist

Austan Goolsbee, president of the Federal Reserve Bank of Chicago, said that if high oil prices continue, the timing of the U.S. central bank lowering interest rates could be pushed back until 2027. This suggests that borrowing costs for the general public and businesses may persist longer than anticipated.

Speaking at the Semafor World Economic Forum on the 14th, Goolsbee mentioned that before the outbreak of war between the U.S. and Iran, he had expected inflation from tariffs to ease this year, allowing the Fed to cut rates. He explained that the situation has changed due to the surge in oil prices caused by the Iran conflict. "If this situation drags on and we don't see inflation coming down and it stays at high levels, then rate cuts will be pushed beyond 2026," he said. He reiterated that the Fed's responsibility is to bring inflation back to 2%.

In the foreign exchange market, the dollar-won exchange rate traded at 1,471.30 won, down 17.90 won from the previous session.