Goolsbee: The U.S. is at a “dangerous moment” for inflation and must prevent it from worsening further
Chicago Fed President Goolsbee said the U.S. is at a “dangerous moment” for inflation and must carefully guard against further deterioration.
He had expected U.S. inflation to fall significantly as the effects of tariffs faded and oil prices declined, but that expectation has not materialized: October CPI rose 0.4% month over month, while core CPI rose 0.3%. Both were above expectations and marked a second consecutive monthly increase. Price pressures in the services and health care sectors remain persistent and are unrelated to tariffs or oil prices.
The Fed is trying to distinguish between two major drivers: supply shocks (tariffs and high oil prices lasting longer than expected) and overheating demand driven by the massive buildout of data centers. AI-related inflation is still concentrated in the AI and technology sectors and has not yet spread to the broader economy, but the Fed is closely monitoring the risk of spillover.
The latest CME FedWatch data show a 90.8% probability of a 25-basis-point rate hike by the Fed in December and a 9.2% probability of a 50-basis-point hike.
$BTC $ETH
#fed #inflation
Chicago Fed President Goolsbee said the U.S. is at a “dangerous moment” for inflation and must carefully guard against further deterioration.
He had expected U.S. inflation to fall significantly as the effects of tariffs faded and oil prices declined, but that expectation has not materialized: October CPI rose 0.4% month over month, while core CPI rose 0.3%. Both were above expectations and marked a second consecutive monthly increase. Price pressures in the services and health care sectors remain persistent and are unrelated to tariffs or oil prices.
The Fed is trying to distinguish between two major drivers: supply shocks (tariffs and high oil prices lasting longer than expected) and overheating demand driven by the massive buildout of data centers. AI-related inflation is still concentrated in the AI and technology sectors and has not yet spread to the broader economy, but the Fed is closely monitoring the risk of spillover.
The latest CME FedWatch data show a 90.8% probability of a 25-basis-point rate hike by the Fed in December and a 9.2% probability of a 50-basis-point hike.
$BTC $ETH
#fed #inflation
