Fed Official Warns Inflation Fight May Require Economic Pain

A top Federal Reserve official warned that fighting inflation may require causing economic pain in the form of higher unemployment. Austan Goolsbee, president of the Federal Reserve Bank of Chicago, made this statement during a speech in London.

Goolsbee noted that the Fed is facing persistent supply shocks, including high oil prices resulting from the Iran war and tariffs. He emphasized that these shocks have driven up inflation.

The official stated that to combat inflation, the Fed may need to impose higher unemployment rates, which would likely cause economic pain for many individuals.