Fed Official Warns Inflation Fight May Cause Economic Pain

Austan Goolsbee, president of the Federal Reserve Bank of Chicago, believes that fighting inflation may require causing economic pain. In a recent speech in London, he stated that the central bank is facing persistent supply shocks, including higher oil prices due to the Iran war and tariffs.

Goolsbee noted that typically, the Fed would wait for such shocks to fade and inflation to fall on its own rather than raise borrowing costs. However, this approach may not be effective in addressing the current situation.