With the latest data from CME Fedwatch tool showing that there is an almost 100% chance of an interest rate cut in September, the market is beginning to price in what that could look like. Federal Reserve Bank of Chicago President Austan Goolsbee spoke with Yahoo Finance reporter Jennifer Schonberger earlier today, highlighting the fact that the Fed is on the path to its 2% inflation target goal.

Former Kansas City Fed President Thomas Hoenig joins Market Domination to weigh in on the current Fed's monetary policies, how officials are addressing economic concerns, and why they should air on the side of caution.

Hoenig, currently a distinguished senior fellow at the Mercatus Center at George Mason University, sees the Fed as understandably "anxious to cut rates."

"I watch the labor market, but the unemployment rate is still 4.1%, in some sense, it's still very historically low, I think that part of it is a very positive," Hoening says. "I like it, but the fact of the matter is, inflation is still 3% year-over-year, 2.6% using their so-called favored measure, which is still not 2%. And they're talking about rate cuts in September. I think that's kind of a getting ahead of the game."

Overall, Hoening views the labor market as being stable: "I think labor wages are increasing. That's a good thing, retail sales were very strong. Those are all very positive things. And they don't suggest that we need to cut. The other thing I keep reminding them is I've seen this before in the 70s — they'd bring inflation down a while and then they'd quickly cut, and then inflation would reignite."

Catch Austan Goolsbee's full interview with Yahoo Finance.

For more expert insight and the latest market action, click here to watch this full episode of Market Domination.

This post was written by Nicholas Jacobino