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Ongoing5 earlier updates10 days

This story has run 6 times over 10 days, starting Sep 12.

  1. Consumer prices rose 0.4% in August and 3.4% over the year, lifting September Fed rate hike odds above 80%
  2. Trump threatens trade cutoff with some nations unless Fed lowers rates despite 3.4% inflation
  3. Update10-year Treasury yield hit 5.014% Monday, Sept. 14, first time since October 2023
  4. Federal Reserve is expected to raise its benchmark rate a quarter point on Wednesday, Sept. 16, its first hike in three years.
  5. UpdateFed raises its benchmark rate a quarter point to 3.75%-4%, its first increase since July 2023
  6. UpdateChicago Fed's Goolsbee says getting inflation to 2% will be 'painful' and require pushing employment below target — this issue
PBS NEWSHOURUpdate

Chicago Fed's Goolsbee says getting inflation to 2% will be 'painful' and require pushing employment below target

Inflation and the Fed
Political Guyentist · September 22, 20262 min read

PBS NEWSHOUR

Goolsbee said beating inflation will mean pushing employment below target. He called that a painful trade-off. It is "exactly the kind of painful trade-off between employment and inflation," he said, "that stagflationary shocks always impose on the central bank." The Fed raised its rate a quarter point last week. The new range is 3.75% to 4.00%. Goolsbee spoke in London. Oil price shocks from the Iran war and tariffs leave no painless path back to the Fed's 2% target, he said. Inflation ran at a 3.4% annual rate in August. Chair Kevin Warsh says otherwise. "I don't believe that we need to do harm to the labor markets," he said last week, "to achieve our objective."

Catch upwhat happened before · 5 earlier issues
  • Sep. 11 — August consumer prices rose 0.4% for the month and held at 3.4% annually, with gasoline driving the monthly jump; core inflation slowed to 2.4%.
  • Sep. 14 — Trump threatened to cut off trade with some nations unless the Fed lowered rates.
  • Sep. 14 — The 10-year Treasury yield touched 5.014%, its highest since October 2023, as Brent crude hit $108.50.
  • Sep. 16 — The Fed raised its benchmark rate a quarter point to 3.75%–4.00%, its first hike since July 2023, on a 12–0 vote.
  • Sep. 17 — Trump called for rates of "1%, or less" and blamed the Fed's board rather than Warsh, the chair he picked.
  • Sep. 21 — The average 30-year mortgage rate hit 6.95%, its highest in more than a year and a half.
  • St. Louis Fed President Alberto Musalem said more rate hikes are likely needed to quell inflation.
  • Minneapolis Fed President Neel Kashkari said inflation is "still too high" even stripping out energy and food.
  • Goolsbee rejected cutting rates to help the U.S. finance its debt.
4 earlier issues
Currently showing Annual CPI against the Fed's 2% target
Annual CPI against the Fed's 2% target
U.S. annual average CPI inflation versus the Federal Reserve's 2 percent targetDot plot on a single horizontal axis of annual percent change in the all-urban Consumer Price Index. The 2025 annual average CPI inflation rate is 2.63 percent, plotted as a dot, with a shaded connector running back to a labeled vertical reference line at the Federal Reserve's 2 percent longer-run goal, so the overshoot is read directly off the axis. Units are percent per year. Uncertainty note: only this annual-average reading is drawn from the grounded dataset; the monthly and core readings mentioned in the story are on different bases and are not plotted, so no trend is implied.Inflation still sits above the 2% targetAnnual average CPI-U inflation, 2025, compared with theFederal Reserve's stated longer-run goal of 2%.Fed 2% targetU.S. CPI, 20252.63%above target0123Annual percent change in consumer prices (CPI-U)Source: BLS. Monthly readings are a different basis, not shown.
Annual CPI against the Fed's 2% target

What we’re less sure of2 of 8 claims