Federal Reserve Official Says Fighting Inflation Likely to Be 'Painful'
Goolsbee said persistent supply shocks leave the Fed little choice but to raise borrowing costs, even if unemployment rises, to return inflation to 2%.
- Austan Goolsbee, president of the Federal Reserve Bank of Chicago, said Monday that the central bank may cause economic pain in the form of higher unemployment to combat stubbornly high inflation.
- Persistent supply shocks, including higher oil prices from the Iran war and tariffs, have forced the Fed to hike rates and lower consumer demand to reach a 2% inflation target.
- In a speech in London, Goolsbee said "forcing inflation back to target in the short run means pushing employment below target," describing the trade-off between low inflation and maximum employment as "painful."
- Fed Chairman Kevin Warsh contradicted Goolsbee last Wednesday after the Fed raised its key interest rate to about 3.9%, saying he does not believe the central bank needs to harm labor markets to achieve its objective.
- Historically, rate hikes have often slowed growth and caused recessions; yet the Fed raised rates in 2022-2023 without causing significant unemployment increases or economic slowdown, complicating Goolsbee's outlook.
49 Articles
49 Articles
Federal Reserve official says fighting inflation likely to be ‘painful’ – WTOP News
WASHINGTON (AP) — A top Federal Reserve official said Monday that the central bank may have to cause economic pain in the form of higher unemployment to combat stubbornly high inflation. Austan Goolsbee, president of the Federal Reserve Bank of Chicago, said in a speech in London that the Fed is facing a series of...
Federal Reserve official says fighting inflation likely to be 'pa
WASHINGTON (AP) — A top Federal Reserve official said Monday that the central bank may have to cause economic pain in the form of higher unemployment to combat stubbornly high inflation . Austan Goolsbee, president of the
The Toronto Star
Federal Reserve official says fighting inflation likely to be ‘painful’
WASHINGTON (AP) — A top Federal Reserve official said Monday that the central bank may have to cause economic pain in the form of higher unemployment to combat stubbornly high inflation.
Federal Reserve official says fighting inflation likely to be painful
WASHINGTON (AP) — A top Federal Reserve official said Monday that the central bank may have to cause economic pain in the form of higher unemployment to combat stubbornly high inflation.Austan Goolsbee, president of the Federal Reserve Bank of Chicago, said in a speech in London that the Fed is facing a series of persistent supply shocks that have driven up inflation, including higher oil prices from the Iran war and tariffs. Typically, Goolsbee…
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