Chicago Federal Reserve President Austan Goolsbee voiced concern over the most recent inflation figures in a Friday CNBC interview, indicating the central bank will likely need to intervene.
“I believe the central bank has definite work ahead to rebuild its credibility,” Goolsbee said during an appearance on “Squawk Box.”
The comments followed a Bureau of Labor Statistics report showing the producer price index—a key wholesale price gauge—rose 0.3% in October, slightly below forecasts. The annual increase reached 6.5%, the steepest since November 2022.
After earlier-in-the-week data showed consumer prices climbing more than anticipated, Goolsbee said the Federal Reserve is drifting further from its 2% inflation objective.
“Inflation has remained above 2% for nearly six years. Although there were periods of improvement, recent data show no progress—and if anything, the trend is moving in the wrong direction,” he said.
“Inflation is rising and has proven more persistent than initially projected following supply shocks. We are now also seeing traditional demand overheating tied to AI data center construction, which appears to be spreading beyond its original scope,” Goolsbee added.
Markets are fully pricing in a quarter-point rate increase at the Federal Open Market Committee’s next meeting on December 8-9. The CME Group’s FedWatch futures gauge also assigns a greater than 10% probability to a half-point hike. Goolsbee is not currently an FOMC voter but will gain a vote in 2027.
Earlier in the week, Federal Reserve Governor Christopher Waller said he would consider a 50-basis-point move contingent on the latest inflation figures.
Goolsbee declined to comment directly on whether the central bank might need to adopt a more aggressive stance.
“It all comes down to this question: What is happening to inflation, and are we on track to return to 2%?” he said. “Right now, my feeling is that we are not.”