Chicago Fed’s Goolsbee Says October CPI Reading Is Troubling, Inflation Must Be Curbed Urgently
Summary
- October consumer price index (CPI) and core inflation data came in above market forecasts, raising concern that inflation pressures could last longer than expected.
- Federal Reserve Governor Christopher Waller mentioned the possibility of a 0.50-percentage-point increase in the benchmark interest rate at the December FOMC meeting, signaling a more forceful tightening step.
- Chicago Fed President Austan Goolsbee stressed that inflation must be brought back to target and said prices are moving in the wrong direction.
Forecast Trend Report by Period
Austan Goolsbee, president of the Federal Reserve Bank of Chicago, voiced concern over hotter-than-expected inflation and stressed the urgent need to rein in price pressures.
Bloomberg reported on November 10 that Goolsbee, in an interview with PBS NewsHour, said the U.S. October consumer price index was "another disappointing reading and close to a troubling level." He added that he had hoped to see progress toward price stability.
Goolsbee said he had expected the effects of tariffs and high energy prices, which had fueled inflation, to have eased by now. But price gains in the services sector have yet to cool, which he called "probably the most concerning part."
The U.S. Bureau of Labor Statistics said core CPI rose 0.3% in October from the previous month. Core prices, which exclude food and energy, topped market forecasts for a third straight month, fueling concern that inflation pressures may last longer than expected.
Earlier, Federal Reserve Governor Christopher Waller said at an event in London that if inflation does not ease, the Fed may need to raise its benchmark rate by 0.50 percentage point at the December Federal Open Market Committee meeting. That would be a more aggressive step than the standard 0.25-percentage-point increase.
Asked about the possibility of a December half-point move, Goolsbee said it was not desirable to limit options before a monetary policy meeting. "There is the biggest table I've ever seen in my life in that meeting room," he said. "All options are always on the table."
He said inflation must be brought back to target and stressed that prices are moving in the wrong direction. Goolsbee does not hold a vote on FOMC rate decisions this year.
