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

Two other regional presidents back more hikes; Warsh says jobs need not suffer.

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."

PREVIOUSLY

  • 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.

![[UPDATE] Chicago Fed's Goolsbee says beating inflation will be 'painful' and will push employment below target chart](/charts/2026-09-22-chicago-fed-s-goolsbee-says-getting-inflation-to-2-will-be-painful-and-require-p.svg "Data: POLI")