Chicago Fed President Austan Goolsbee highlights persistent inflation concerns as core PCE hits 3.4% in May, the highest since October 2023.
Chicago Federal Reserve President Austan Goolsbee stated that inflation is still moving in the wrong direction, despite some improvement in services inflation. His remarks followed data showing core PCE inflation at 3.4% in May, the highest level since October 2023, with goods and services prices rising 0.4% and 0.5%, respectively.
The increase was driven by a 6.5% jump in energy prices and a 0.8% rise in transportation services, a sector sensitive to gas prices. While Goolsbee acknowledged progress in services inflation, he emphasized that inflation remains the Fed’s primary concern over the job market.
Markets are pricing in a potential Fed rate hike in September, though Goolsbee declined to speculate on his stance. He praised former Fed Governor Kevin Warsh for his focus on inflation, aligning with the current Fed’s cautious approach.