Chicago Fed President highlights persistent inflation risks, citing elevated core PCE and stubborn services inflation.
Federal Reserve Bank of Chicago President Austan Goolsbee stated inflation remains the primary obstacle for policymakers, with price pressures still moving in the wrong direction. Core inflation, measured by the Personal Consumption Expenditure index, remains “well too high” despite some improvement in services sectors, he noted in a CNBC interview.
Recent PCE data showed mixed signals, with services inflation easing slightly but overall inflation still above the Fed’s 2% target. Goolsbee warned that distinguishing temporary from persistent inflation pressures remains difficult, though some factors may be one-off. Services inflation, in particular, was described as “a little more disturbing.”
Goolsbee also expressed unease with long-term forward guidance, preferring flexibility over rigid forecasts like the Fed’s dot plot. He supported ongoing reviews of the dot plot’s role but stopped short of dismissing its utility entirely.