Goolsbee Warns 3.4% Inflation Is Moving Wrong Way as Fed Drops Rate-Path Guidance

3 articles · Updated · CNBC · Jun 25

Core PCE inflation hit 3.4% in May — the highest since October 2023 — prompting Chicago Fed President Austan Goolsbee to say inflation is "clearly" the Fed's main problem, not the job market.
Goods prices rose 0.4% and services 0.5%, with energy up 6.5% and transportation services up 0.8%, giving Goolsbee only limited "bright spots" in services inflation.
Goolsbee declined to signal where rates should go, backing new Chair Kevin Warsh's decision to strip forward guidance from the FOMC statement and avoid routine speculation about the rate path.
Markets still see a possible September hike, while CME FedWatch shows about a 30% chance of a move at the July 28-29 meeting.
The comments also signaled support for Warsh's early leadership style, with Goolsbee rejecting talk of internal Fed rancor even as the chair resets how the central bank communicates.

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