Goolsbee Demands Three Months of Cooling Inflation Before Confirming Fed's Target

Chicago Federal Reserve President Austan Goolsbee expressed cautious optimism about inflation cooling down to the Fed's target rate of 2%. He said that recent data shows a slight moderation in price increases, but emphasized that inflation had been trending upward for five to six months prior. To confirm that inflation is returning to its target path, he wants to see three to four consecutive months of CPI readings similar to June's.

Goolsbee noted that the latest July CPI rose 3.4% year-over-year, a slight moderation from June's 3.5%. He attributed this trend to the economy gradually absorbing price disruptions caused by tariff shocks and rising energy costs over the past year.

The Fed held interest rates steady at its last meeting, but internal divisions are widening. Some policymakers dissented, advocating for an immediate rate hike due to lingering concerns about inflation. Goolsbee's cautious stance is rooted in his experience with high inflation and the post-pandemic economic trajectory.