Fed's Goolsbee says September CPI data was discouraging
TLT•Chicago Fed President Austan Goolsbee called September's higher-than-expected consumer price data “discouraging” and said services inflation showed little sign of improvement. He reiterated that the Fed must return inflation to its 2% target but did not say how it should respond with near-term rate policy.
1. Inflation concerns
Austan Goolsbee said September's consumer price index data left him worried about price pressures, including services inflation, which he said showed little sign of improvement. He said the services inflation reading was over 5% and could not readily be attributed to tariffs or oil prices.
2. Fed policy outlook
Goolsbee did not specify how the central bank should respond with near-term rate policy, but said the Fed could not allow high price pressures to persist and must return inflation to its 2% target. The Fed raised its target rate by a quarter percentage point last month, to a range of 3.75% to 4%, and penciled in another increase by year-end. Officials have pushed back on expectations of a hike at the end-of-month meeting, though the CPI data revived market expectations of a move sooner rather than later.
