US stocks continue to move lower in premarket trading

As Chicago Fed Pres. Goolsbee speaks on CNBC, US stocks are pushing lower.

The futures are in now implying:

• Dow industrial average -320 points
• S&P index -45 points
• NASDAQ index down -190 points

US yields may lower with the 2-year yield -2.6 basis points at 3.931%. The 10 year yield is trading down -2.7 basis points or 4.206%.

Chicago Fed Pres. Goolsbee says that when you live uncertainty you have to wait for things to clear up.

He acknowledges rising uncertainty and anxiety in the economy, particularly regarding capital spending. While current conditions may be a temporary shock, he stresses the need for a steady, long-term approach from the Fed. He notes that markets seek quick information, but waiting is necessary, especially with uncertainty around tariffs. He highlights economic resilience, with strong data and progress on inflation and unemployment, says that rates 12-18 months from now will be lower. However, he warns that delaying cuts will lead to a backloaded approach, with tariffs currently a key risk. Beyond tariffs, the Fed must consider tax cuts and broader economic trends. He acknowledges that economic slowing would justify a rate cut but emphasizes the need to revise the outlook if inflation expectations rise. Goolsbee firmly supports the Fed’s commitment to 2% inflation and warns of the dangers of stagflation, which could complicate policy decisions. If market expectations for long-run inflation increase, the Fed would have to act, though there is no simple response to stagflationary pressures.

Bias: Goolsbee leans slightly dovish but remains cautious especially with tariff uncertainty and its impact on inflation. He supports patience in rate decisions and expects cuts, yet he acknowledges inflation risks and does not dismiss the possibility of a policy shift if conditions change. His stance suggests he is neither fully dovish nor hawkish but is waiting for more clarity before committing to a firm direction.

This article was written by Greg Michalowski at www.forexlive.com.