Chicago Fed President Austan Goolsbee said recent US inflation data have been “a little better,” raising hope that price growth can resume its decline toward Fed’s 2% target as effects of tariffs and Iran-war oil shock fade. Speaking Thursday in an interview with Fox News, Goolsbee said, “If we can get some of this stuff into the rearview mirror then I think we get back on what I was calling the golden path, which is inflation heading back to 2%.” He nevertheless stressed that inflation around 3% remains “too high” even as latest readings provide some encouragement.
Goolsbee acknowledged that disinflation had previously stalled and even started moving in wrong direction, but said recent data may be changing that picture. “For a couple of months, we’ve been getting a little bit better readings and hopefully that will continue,” he said. July CPI and PPI both came in relatively benign this week, reinforcing possibility that earlier tariff and energy shocks are fading rather than becoming embedded in broader price pressures.
For policy, Goolsbee’s remarks support patience while Fed determines whether improvement is durable. He described economy as “fairly stable” and said policymakers are “mostly watching the inflation component,” suggesting there is little urgency to change rates while incoming price data continue to improve. His “golden path” therefore depends on temporary shocks moving into rearview mirror and inflation continuing toward 2% without renewed deterioration.
Key Takeaways
- Chicago Fed President Austan Goolsbee said recent inflation data have been “a little better,” raising hope that disinflation can resume.
- He sees potential return to Fed’s “golden path” if tariff effects and higher oil prices from Iran war move into rearview mirror.
- Goolsbee stressed inflation around 3% is still “too high”, so recent improvement does not amount to an all-clear.
- He acknowledged inflation progress had previously “stalled out a little bit and was going the wrong way,” making latest two months of better readings more significant.
- Broader economy still feels “fairly stable,” leaving Fed primarily focused on whether inflation continues to improve.
- His message supports policy patience: if temporary shocks fade and disinflation persists, Fed can keep rates steady while inflation moves back toward 2%.
