Goolsbee Contradicts Warsh on Inflation Fight: 'It's Going to Be Painful'

Austan Goolsbee, president of the Federal Reserve Bank of Chicago, has expressed concern that fighting inflation may come at a painful cost. Speaking in London on September 21, 2026, he stated that continuous supply disruptions have pushed inflation higher.

Goolsbee noted that typically, the central bank would wait for temporary shocks to clear naturally instead of raising interest rates. However, with repeated supply shocks, he believes the Fed has little option left except to raise rates and cool business and consumer demand to match diminished supply.

The goal is to bring inflation back down to the 2% target. Goolsbee emphasized that this would involve pushing employment below target in the short run, as the central bank faces a difficult trade-off between low inflation and maximum employment.

Goolsbee's perspective contrasts with comments from Fed Chairman Kevin Warsh, who stated at a news conference last Wednesday that he did not believe raising rates was necessary to achieve their objective. Warsh said, 'I don't believe that we need to do harm to the labor markets to achieve our objective.'