Goolsbee warns of inflation pressures as Fed considers rate hikes

Chicago Federal Reserve President Austan Goolsbee called the October consumer‑price report “borderline disturbing” in an interview with PBS NewsHour on Tuesday. He said the data showed a “real inflation issue” that the Fed will have to confront, and warned that the problem is growing. The comment came as the central bank debates whether to raise rates again this winter.

The Bureau of Labor Statistics said the consumer price index rose 0.4 percent in October on a seasonally adjusted basis, higher than economists had forecast. It marks the third straight month of outsized price gains. Goolsbee noted that price drivers such as tariffs have not faded as he had hoped, and that services inflation remains stubbornly high. He added that high prices are on the minds of businesses, nonprofits and ordinary consumers alike.

Other Fed officials echoed the concern. Governor Christopher Waller said a hot report could push him toward a half‑point hike in December if core CPI, which strips out food and energy, stays near 0.3 percent. Dallas Fed President Lorie Logan said she sees a need for two more quarter‑point increases and that the committee may move more quickly this winter than it has so far this year. By contrast, Philadelphia Fed President Anna Paulson urged a gradual approach, saying further tightening should be modest and data‑dependent. The Fed raised rates by a quarter point in September to a 3.75‑4 percent range and then held steady in October.

Goolsbee warned that if consumers and firms begin to expect persistently high inflation, the effort to bring prices down could become far more painful. He did not say whether the Fed will hike rates at its next meeting, but he said the data will drive the decision. All eyes are now on upcoming CPI releases and the Fed’s winter policy meeting, which could set the tone for borrowing costs, spending and the broader economy in the months ahead.