Austan Goolsbee, President of the Federal Reserve (Fed) Bank of Chicago, told AP at the Semafor World Economy conference on Tuesday that the longer the Middle East concerns go, the cut could be pushed out of 2026.

Key takeaways:

There are circumstances where rates can go up, and circumstances for a hold, or decreases.

My concern is how long is this going to last.

The longer this goes, if inflation stays up, that pushes cuts out of 2026.

If inflation doesn't show improvement, time for optimism gets postponed.

We have to wait and see what happens with oil markets.

If saw progress on core inflation, would be feeling better, even if headline inflation was high.

We will get inflation to 2%.

If inflation is 4%, nobody should be thinking rates should go back to 2%.

We've had good news on housing inflation.

I have a lot of respect for Kevin Warsh.

I'm not nervous as long as people come with the Fed mindset that the law gives us a job about the economy, not electoral politics.

I think Warsh will come with that attitude.

Normally don't tighten into a supply shock. Inflation expectations so far are anchored.

If gas gets to $5 and stays there for months, inflation expectations could get unanchored."