Fed's Goolsbee Wants More Evidence Before Declaring Inflation Cooling

Chicago Fed President Austan Goolsbee said he is encouraged by recent inflation readings but wants several more months of cooler data before he gains confidence that inflation is sustainably returning to the central bank's 2% goal. He called inflation his primary concern and described US growth and the labor market as "basically stable."

Goolsbee supported keeping interest rates unchanged at the July meeting, noting inflation has remained above target for an extended period. Softer inflation data, weak July retail sales and subdued hiring have already led investors to reduce expectations for additional Fed tightening. Markets now price roughly a 30% chance of a September rate hike, down from much stronger expectations a month earlier.

He also cautioned that faster productivity growth from technologies such as AI does not automatically justify lower interest rates, because heavy investment spending could eventually overheat the economy.