Federal Reserve Warns of Painful Inflation Fight

A top Federal Reserve official has warned that fighting inflation may be 'painful' for the economy. Austan Goolsbee, president of the Federal Reserve Bank of Chicago, said that the central bank is facing a series of persistent supply shocks that have driven up inflation.

The shocks include higher oil prices resulting from the Iran war and tariffs. Typically, the Fed would wait for such shocks to fade and inflation to fall on its own rather than raise borrowing costs. However, Goolsbee believes that this approach may not be effective in the current situation.