Chicago Fed President Goolsbee Calls Inflation “Serious,” Warns of Further Tightening

【Financial News, New York—Lee Byung-chul, correspondent】  As inflation in the United States continues to run higher than expected, calls for additional interest rate hikes are growing louder within the Federal Reserve System (Fed). Senior Fed officials expressed serious concern, saying price increases have been slow to ease.
According to CNBC and other outlets on the 11th (local time), Federal Reserve Bank of Chicago President Austan Goolsbee said in an interview with PBS NewsHour the previous day that recently released inflation data were “worryingly high, to the point of being shocking.”
Goolsbee emphasized, “Another worrying inflation report has come out,” adding, “We are facing an inflation problem that has grown increasingly serious over time, and we must respond.”
The October Consumer Price Index (CPI), released by the U.S. Bureau of Labor Statistics (BLS) on the 10th, rose 0.4% from the previous month. The figure exceeded market expectations, with sharp price increases continuing for a third consecutive month. Core CPI, which excludes food and energy, also rose 0.3% from the previous month.
Goolsbee noted in particular that, contrary to initial expectations, inflationary pressure from tariffs has not eased over time. He also cited the persistence of high inflation in the services sector as a source of concern.
He said, “Inflation is on everyone’s mind,” adding, “Businesses, nonprofits and ordinary consumers are all worried about high prices.”
He warned that the prolonged period of high inflation could cause inflation expectations among consumers and businesses to become entrenched. Goolsbee said, “This is a serious concern,” and noted, “If inflation expectations become entrenched, the process of stabilizing prices could become much more painful.”
However, he did not state a specific position on whether interest rates should be raised in December. He explained, “I prefer not to state a specific position in advance that would limit our options at future meetings.”
Other Fed officials have taken a more hawkish stance.
Federal Reserve Governor Christopher J. Waller said at an event in London on the 10th that a 0.5-percentage-point increase in the benchmark interest rate in December should also be considered if inflation comes in higher than expected.
Waller stressed that policymakers should discuss a half-point hike if core CPI rose around 0.3% from the previous month. In fact, core CPI inflation reported that day was 0.3%.
Lorie K. Logan, president of the Federal Reserve Bank of Dallas, also stressed the need for further tightening. Logan said the benchmark rate needed to be raised by 0.25 percentage points twice more, adding, “This winter, the FOMC may be able to move at a faster pace than it did this fall.”
By contrast, Philadelphia Fed President Anna Paulson maintained that gradual rate increases were appropriate. Paulson said, “Inflationary pressures remain substantial,” while adding, “For now, further gradual tightening seems appropriate.”

[email protected] Lee Byung-chul, correspondent Reporter