Fed Official Warns Inflation Fight May Require Economic Pain

Austan Goolsbee, president of the Federal Reserve Bank of Chicago, warned that fighting inflation may require causing economic pain in the form of higher unemployment. In a speech in London, Goolsbee noted that the central bank faces persistent supply shocks driving up inflation, including higher oil prices and tariffs.

The Iran war has led to increased oil costs, while tariffs have also contributed to rising prices. Typically, the Fed would wait for such shocks to fade before acting, but this time it may need to take action sooner rather than later.