Chicago Fed President Austan Goolsbee on Inflation, Tariffs, and Interest Rates

Inflation Outlook and Concerns

• 📊 Inflation reports have been mixed, with the first two being mild, but recent CPI and PPI data show an upside surprise in services inflation.
• ⚠️ Goolsbee expresses unease about inflation kicking up in categories not easily dismissed as transitory, particularly services inflation turning up.
• 🔍 The import price data is also being scrutinized, with tariffs adding complexity to understanding whether foreign exporters are absorbing costs.

Tariffs and Stagflationary Risks

• 📈 Tariffs are identified as a significant source of uncertainty, potentially leading to persistent inflation shocks and a stagflationary direction.
• 🧩 The complexity arises because tariffs are not