Fed’s Goolsbee Keeps Focus on Inflation, Echoes Warsh on Rate Guidance

Chicago Federal Reserve President Austan Goolsbee said inflation remains the Federal Reserve’s primary concern, warning that underlying price pressures continue to move in the wrong direction despite some recent improvement. Speaking in a CNBC interview on Thursday, Goolsbee said, “If we look at core inflation, it’s still well too high and it’s trending the wrong way, and we’ve got to see improvement on that.” He added that while there have been “a few bright spots,” policymakers still have more work to do before inflation can be considered under control.

Goolsbee pointed in particular to services inflation, where he acknowledged some encouraging developments but stressed that progress remains insufficient. “You have seen now a little bit of improvement on this services inflation, and I’ve been identifying that as something that we would want to see,” he said. Even so, he concluded that “as between the two sides of the Fed’s mandate—the inflation side and the job market side—clearly the problem’s on the inflation side.” He also noted that although oil prices could fall rapidly after their recent surge, services inflation remains elevated and moderating wage growth offers “no guarantee inflation will ease.”

Despite his hawkish assessment of inflation, Goolsbee declined to offer guidance on the next policy move. He refused to speculate on whether the Fed should raise interest rates or keep them unchanged, saying he agreed with Chair Kevin Warsh’s approach of avoiding unnecessary market speculation over the future rate path. His remarks reinforce the Fed’s broader message that policymakers remain firmly focused on restoring price stability while leaving future decisions dependent on incoming economic data.