Fed Official Warns Inflation Fight May Require Higher Unemployment

Austan Goolsbee, president of the Federal Reserve Bank of Chicago, warned that fighting inflation may require economic pain in the form of higher unemployment.

Goolsbee said in a speech in London that the central bank is facing persistent supply shocks, including higher oil prices from the Iran war and tariffs.

The Fed typically waits for such shocks to fade and inflation to fall on its own rather than raise borrowing costs, but Goolsbee noted that this approach may not be effective in this case.