Goolsbee Warns of Potential Tariff-Induced Inflation Spike

Chicago Federal Reserve President Austan Goolsbee suggests that the U.S. central bank's preferred inflation gauge may not be as alarming as recent CPI figures, amid concerns over potential tariff-induced supply shocks under the Trump administration's evolving tariff policies.

Federal Reserve President Austan Goolsbee has addressed concerns regarding future inflation readings, suggesting that the central bank's preferred measure may not be as concerning as the recent Consumer Price Index (CPI) figures.

Goolsbee highlighted at a Chamber of Commerce event that, despite inflationary challenges, the nation has seen progress since the four-decade high in 2022. However, he noted concerns about the potential impact of new tariff policies under President Trump. "Before the uncertainties from policy and geopolitics, inflation looked pretty good," Goolsbee commented.

The President's potential actions, namely imposing tariffs on major trading partners, could lead to supply shocks similar to those experienced during the COVID-19 pandemic, he warned. While past tariffs had limited impact on inflation, broader measures could pose significant risks.