Fed's Goolsbee: September inflation disappointing, but more data needed before rate hike

BlockBeats news, October 15, Chicago Fed President Goolsbee said that the higher-than-expected U.S. September inflation data was disappointing, especially as services inflation remained above 5%, while core goods price increases also did not fall as expected, indicating that inflationary pressure may be more stubborn than previously judged.

He pointed out that if core inflation continues to hold at an annualized monthly rate of about 4%, that would be completely unacceptable, and the Fed must take policy action. Goolsbee said it is still unclear whether the current interest rate level is sufficient to bring inflation back to the 2% target, and he prefers to wait for more data before deciding whether to raise rates further. But if inflation data in the coming months continue to remain at current levels, the Fed cannot stand idly by. He stressed that the latest data further show that inflation is not a temporary phenomenon, and its decline is also slower than previously expected.

Goolsbee also noted that the U.S. job market is very stable, economic growth is strong, consumer spending is robust, and AI investment may also push the economy to overheat further. He said businesses in his district have reported almost no risk of recession, and instead are generally focused on costs and rising prices, so compared with supply shocks, he is more worried about overheating demand. Goolsbee stressed that if employment remains stable while inflation continues to run above target and move in the wrong direction, the Fed must take measures to prevent the economy from overheating further.