Austan Goolsbee, President and CEO, Federal Reserve Bank of Chicago speaks at The Capital Hilton during the 42nd annual National Association for Business Economics Economic Policy Conference on February 24, 2026 in Washington, DC.
Luke Johnson | Getty Images
Chicago Federal Reserve President Austan Goolsbee called the latest inflation data “borderline disturbing.”
“It’s another distressing report — borderline disturbing,” Goolsbee said in an interview with PBS Tuesday.
“We have got a real inflation issue on our hands that has been developing,” Goolsbee said, according to a transcript of his remarks. “We’re going to have to deal with that.”
The consumer price index rose 0.4% on a seasonally adjusted basis in October, according to the Bureau of Labor Statistics’ Tuesday release. That was higher than economists had predicted.
Goolsbee said he had not seen drivers of prices like tariffs fade over time like he hoped. He also said continuously high inflation on services concerned him.
And the Chicago Fed chief said lofty prices are a top issue for many people he meets.
“It’s on everyone’s mind,” Goolsbee said. “It’s on business mind. It’s on nonprofits’ minds. It’s on ordinary consumers’ mind.”
The inflation report landed at a critical juncture for the Federal Reserve, as it considers its next interest-rate move — and the moves it may have to make beyond that if the numbers continue to come in hot.
Goolsbee’s comments came on the heels of remarks from other Fed officials Tuesday who said the rate-setting Federal Open Market Committee may need to act more decisively to rein in inflation.
When it raises or lowers rates, the Fed typically moves them by a quarter-percentage point. But Fed Governor Christopher Waller said in London early Tuesday that a hot inflation report could push him toward advocating for an outsized half-point increase in December, and specifically said such a hike should be on the table if core CPI was “around 0.3.” Hours later, that’s exactly what happened.
Dallas Fed President Lorie Logan, speaking Tuesday after the inflation report, said she sees a need for two additional quarter-point increases, and said “it may be possible to move more rapidly this winter than the FOMC has moved so far this fall.”
The rate-setting committee raised rates by a quarter point in September, to a range of 3.75%-4%, before voting to hold them steady in October.
After years of higher-than-preferred price growth, Goolsbee said the possibility of consumers and businesses beginning to expect hot inflation is a “major concern.” If that does happen, he said it can make the process of cooling inflation “much more painful.”
But Goolsbee didn’t specify whether he thought the Fed should hike rates at its December policy gathering as a result of these concerns.
“I’m not a fan of being very specific and tying our hands at the next meeting or meetings in the future,” Goolsbee said.
Waller, Logan and Paulson are voting members of the FOMC this year, which means they will cast votes on whether to raise rates at the committee’s final meeting of the year in December. Goolsbee will be a voting member next year.
In the wake of the inflation report and the remarks from the various Fed officials, Fed funds futures are now unanimously expecting a rate hike at the December meeting, according to CME’s FedWatch tool.
Now the question is about whether the central bank will raise rates by a quarter or half percentage point. The Fed funds futures currently put the odds of a half-point hike at the upcoming December meeting at 15%.
Odds of rates reaching 4.25%-4.5% by the January meeting — the equivalent of either a single half-point rise or two quarter-point hikes — are now at 60%, with a 10% chance of rates hitting 4.5%-4.75% by then.
