Goolsbee Says September Inflation Disappoints, Urges More Data Before Hike

Chicago Fed President Goolsbee said September inflation was higher than expected, raising questions about whether existing interest rates are sufficient to bring inflation back to the Federal Reserve’s 2% target.

Services inflation remained above 5%, and core goods prices did not cool as expected. The figures suggested price pressures could be more persistent than previously thought.

Goolsbee favored waiting for more data before deciding whether to raise rates again. He said monthly core inflation continuing at a pace that annualized to about 4% would be unacceptable and require policy action.

He described the labor market as stable, economic growth as strong and consumer spending as robust. Artificial intelligence investment could add to economic heat, he said, while businesses in his district were focused on rising costs and prices rather than recession risks.

If employment remains stable while inflation stays above the Fed’s target and moves in the wrong direction, Goolsbee said, the central bank would need to act to prevent further overheating.