Chicago Fed president Austan Goolsbee signaled in an interview with Yahoo Finance that the central bank is closer to cutting interest rates and warned that it risks a recession if officials wait too long to ease monetary policy.

He declined to say when he expects a cut to happen but when asked Thursday if the Fed has the basis to do so now he said: "Are the conditions in place here? Yes, this is what the path to 2% looks like"— a reference to the Fed’s goal of getting inflation down to 2%.

When asked whether the Fed risks what Goolsbee calls the "golden path" — getting inflation down without triggering a recession — Goolsbee said "yes."

"You risk the golden path if you are going to be as restrictive as we are now," he added.

What has Goolsbee encouraged is a string of better monthly readings on inflation in the second quarter, calling the hotter readings of the first quarter a "bump in the road."

"It's not done, but it makes me feel a lot better when you both see it for multiple months in a row," he said.

The Chicago Fed president became the latest of several central bank policymakers to suggest that the time for cuts is in fact drawing near, including Fed chair Jerome Powell, New York Fed president John Williams and Fed governor Chris Waller.

"While I don’t believe we have reached our final destination, I do believe we are getting closer to the time when a cut in the policy rate is warranted," Waller said in a speech Wednesday titled "Getting Closer."

The markets expect the Fed to hold rates steady at its next meeting on July 30-31. But traders are currently betting the central bank will cut rates in September, with a probability approaching 100%.

When asked Thursday whether the case is building for a potential rate cut in September if not at the end of this month, Goolsbee declined to say.

But he noted "the more months of [inflation] data you get like the last seven months of last year for sure that's what the path to 2% looks like."

The latest evidence of cooling inflation came when the Consumer Price Index on a "core" basis — which excludes volatile food and energy prices the Fed can’t control — rose 3.3% year over year in the month of June. That was down from 3.4% in May and 3.6% in April.

On July 26 the Fed gets a new June reading from its preferred inflation gauge — the "core" Personal Consumption Expenditures Index.

Some economists believe it could drop to 2.5%, after falling to 2.6% in May from 2.7% in April.

Fed officials have repeatedly said that they would not cut rates until they gained confidence inflation is sustainably dropping to their 2% goal. The latest inflation data in the second quarter has improved that confidence, but not yet clinched it.

But with inflation showing new signs of slowing, the job market has come back into greater focus for the central bank as it shows signs of cooling. The unemployment rate has risen for two consecutive months to 4.1%.

That raises the prospect of the job market becoming a determining factor again for the Fed when it comes to cutting rates. The Fed has a dual mandate to maintain stable prices and maximize employment in the US.

Goolsbee said it is an "area of concern" and "one to keep your eye on" but noted that so far the job market has been cooling "to a position of better balance."

"There are some other warning lights I'd say, but so far this doesn't look like a recession," he said. "It's just a cooling back to better balance, but it needs to stabilize at that and not keep getting worse."

If unemployment continued to deteriorate or if there were a sharp uptick in unemployment that looked like what happens at the beginning of a normal recession, “you would be definitely justified to be agitated about the employment side of the mandate,” he added.

"Thus far, it doesn't look like that."

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