In a move widely expected by investors, the Federal Reserve raised rates by 25 basis points at their July meeting. But what the Fed does in September? That's still up for debate. Even Federal Reserve Bank of Chicago President Austan Goolsbee tells Yahoo Finance Live that he still doesn't know what the Fed will decide to do at its next meeting. "I'm open to reading the data. If there's a major change of conditions, I haven't made up my mind for what should happen in September," Goolsbee said. Throughout the interview, Goolsbee referred to the Fed being on a "golden path," which he defines as bringing inflation down "without causing a major recession." If the Fed can do that, Goolsbee says, it would be "a triumph for the Fed, a historic triumph." To the economists who still firmly believe that unemployment must rise for inflation to come down, Goolsbee says "this business cycle was so sufficiently strange and sufficiently unusual, that I don't think that the normal rules of a direct tradeoff between unemployment and inflation necessarily have to apply. They certainly have not applied in the last six months." After the spring banking crisis in March, Goolsbee expressed some concerns about a tightening in the credit market. But so far, Goolsbee says "that's been the dog that has not been barking," citing a stabilization in the banking sector and rising deposits.
