Chicago Federal Reserve President Austan Goolsbee raised alarms about inflation in a Wednesday interview on PBS Newshour, describing the latest Consumer Price Index (CPI) data as “borderline disturbing.” His remarks underscored growing concerns within the Fed about persistent price pressures, particularly in the services sector, which he noted is “not coming down.” Goolsbee emphasized that the U.S. faces “a real inflation issue on our hands,” signaling a potential shift toward more aggressive monetary policy.
The Fed official’s hawkish tone was reinforced by an 8/10 FXS Speechtracker score, well above the historical average of 6.8/10. Goolsbee warned of “overheating prices” across various sectors and expressed fear that inflation expectations could become entrenched if left unchecked. He reiterated that “everything is always on the table,” leaving the door open for further rate hikes or extended restrictive policies.
Goolsbee’s comments contributed to a 1.69-point rise in the FXS Fed Sentiment Index, pushing it to 145.61, far above the neutral 100 mark. This shift suggests markets may anticipate a prolonged “higher-for-longer” stance from the Fed, a backdrop that typically strengthens the U.S. Dollar against lower-yielding currencies. The Dollar saw its strongest performance against the Japanese Yen, with a 0.05% gain.