Chicago Fed President Austan Goolsbee warned overnight that US inflation is moving in the “wrong way,” expressing particular concern that price pressures are spreading beyond energy and tariffs into broader service categories. His remarks followed April’s firmer-than-expected CPI report, which showed both headline (3.8%) and core (2.8%) inflation accelerating as rising oil prices increasingly fed through the economy.
Goolsbee said the “unexpectedly disappointing” part of the report was the strength in services inflation, arguing that this category cannot simply be explained away by higher oil prices. “That’s the part that I’m nervous about,” he said, adding that he wants to see services inflation “at least stop growing and hopefully start going back down.”
Goolsbee also emphasized that the labor market remains broadly stable, meaning the Fed is currently not facing a difficult trade-off between inflation and employment. “One side of the mandate is going wrong and the other side is not going,” he added, “So in the short run, I want us to be cognizant of that.”
