Chicago Fed President Austan Goolsbee warned that the latest surge in energy prices risks complicating the inflation outlook at a delicate stage in the policy cycle. Speaking to PBS News Hour, he said the economy is now facing a new inflation shock before fully absorbing the previous one.
“We’re likely to see an impact driving up inflation at a time when we still haven’t quite cleared the previous shock that was driving up inflation,” Goolsbee said.
Goolsbee emphasized that any path toward rate cuts this year depends on clear progress in inflation. “For it to be realistic that rates would come down further this year we’ve got to see progress on inflation,” he added.
“With inflation going up more, we’re going to have to really think through what the options are and how we’re going to get through it,” he said.
