Goolsbee Sees Hope for Improved US Inflation Data

Chicago Federal Reserve Bank President Austan Goolsbee says the latest US inflation data has been 'a little better'. He hopes this improvement will continue as tariffs and higher oil prices from the Iran war fade.

Goolsbee aims for a return to the 'golden path', where inflation heads back to 2%. The current level of 3% is too high, he says. The good news is that new data has been better than expected.

The Fed last month kept short-term policy rates between 3.50%-3.75%, despite five policymakers wanting a rate hike. The central bank targets 2% inflation using the personal consumption expenditures price index. In June, PCE inflation was 3.7%, down from May's peak of 4.1%.

Recent reports of mild consumer and producer price inflation in July have erased expectations of a Fed rate hike soon. Goolsbee says inflation has been too high and progress stalled, but recent readings are better.