A full-employment economy with solid growth and falling inflation will let the U.S. Federal Reserve continue cutting interest rates, though uncertainty about the impact of tariffs and other policy changes argues for a slower approach,

"I still think my ultimate where-we're-going-to-land is a fair bit below where we are today," Austan Goolsbee said at auto symposium in Detroit.

The Fed needs to be mindful of overheating and deterioration, but things are largely going well. The appearance that inflation has stalled is largely due to base effects. Added uncertainty makes the environment for the Fed foggier, a reason to slow the pace of cuts.

Chicago Federal Reserve President Austan Goolsbee warned on Wednesday that ignoring the potential inflationary impact of tariffs would be a mistake, citing the COVID-19 pandemic experience where supply chain disruptions drove up inflation.

Federal Reserve Bank of Chicago President Austan Goolsbee said persistent, outsize tariffs could renew supply-chain disruptions and drive up inflation.

Trade wars could lead to supply-chain disruptions and an inflation spike similar to the early pandemic, Austan Goolsbee said.