Chicago Federal Reserve President Austan Goolsbee warned on Friday that the central bank still has significant work ahead to combat inflation. Speaking to CNBC's Squawk Box, Goolsbee emphasized the need to restore the Fed's credibility after recent data showed persistent price increases.
The Bureau of Labor Statistics reported that the producer price index rose 0.3% in October, slightly below expectations but still marking a 6.5% annual gain, the highest since November 2022. Earlier in the week, consumer price index data also exceeded forecasts, signaling that inflation remains a pressing concern.
Goolsbee noted that inflation has remained above the Fed's 2% target for nearly six years, with recent trends moving in the wrong direction. He attributed the persistence of inflation to supply shocks and demand overheating, particularly from the AI data center buildout. 'Inflation is rising. It's proved far more persistent than we predicted,' he said.
Markets are pricing in a quarter-percentage-point rate hike when the Federal Open Market Committee meets on December 8-9, with a better-than-10% chance of a half-point increase, according to the CME Group's FedWatch gauge. Goolsbee, who will become an FOMC voter in 2027, did not speculate on the likelihood of more aggressive action but stressed the importance of monitoring inflation trends.