Fed Official Warns Higher Unemployment May Be Necessary to Combat Inflation

A top Federal Reserve official has warned that fighting inflation may be 'painful' and could require causing economic pain in the form of higher unemployment. Austan Goolsbee, president of the Federal Reserve Bank of Chicago, made this statement while speaking in London on Monday.

Goolsbee pointed to a series of persistent supply shocks that have driven up inflation, including higher oil prices due to the Iran war and tariffs. Typically, the central bank would wait for such shocks to fade and inflation to fall on its own, but Goolsbee emphasized that this may not be possible in this case.