Chicago Federal Reserve President Austan Goolsbee called the latest consumer price data “borderline disturbing” on Tuesday, as several Fed officials indicated the central bank may need to act more decisively to tame inflation after prices rose more than expected in October.
Goolsbee, speaking in an interview with PBS NewsHour, said the October report was “another distressing report — borderline disturbing.” He said the Fed has “a real inflation issue on our hands” that it needs to deal with. He said he had not seen price drivers such as tariffs fade over time as he had hoped, and that continuously high inflation on services concerned him.
The Chicago Fed president said the possibility of consumers and businesses beginning to expect hot inflation is a “major concern” and that, if it happens, it can make the process of cooling inflation “much more painful.”
But Goolsbee did not specify whether he thought the Fed should raise rates at the Federal Open Market Committee’s December meeting 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,” he said.
Other Fed officials were more explicit. Governor Christopher Waller, speaking Tuesday in London, said a hot inflation report could push him to advocate for a half-point increase in December rather than the usual quarter-point move. He said such a hike should be on the table if core CPI, which excludes volatile food and energy prices, was “around 0.3” for the month. The Bureau of Labor Statistics reported Tuesday that core CPI rose 0.3% in October.
Dallas Fed President Lorie Logan said after the CPI release that she sees a need for two additional quarter-point increases and that “it may be possible to move more rapidly this winter than the FOMC has moved so far this fall.”
Waller and Logan are voting members of the rate-setting committee this year; Goolsbee will be a voting member in 2027.
The FOMC raised the benchmark federal funds rate by a quarter point in September, to a range of 3.75% to 4%, and held it steady in October.
According to CME’s FedWatch Tool, fed funds futures are now unanimously expecting a rate hike at the December meeting. The odds of a half-point increase stand at 15%, while the market sees a 60% chance that rates reach 4.25% to 4.5% by the January meeting, equivalent to either a single half-point rise or two quarter-point moves.
Analysis
Why This Matters
- The October CPI report came in hotter than expected, marking the third straight month of elevated inflation, which reduces the likelihood that the Fed will keep rates on hold.
- If the Fed raises rates further, borrowing costs for mortgages, credit cards, and business loans will increase, potentially slowing the economy.
- Several Fed officials are now openly discussing the possibility of a larger-than-usual half-point rate increase, which would be a significant shift in the pace of tightening.
Background
The Federal Open Market Committee raised the federal funds rate by a quarter point in September 2026, after holding it steady in October. The Fed typically adjusts rates in quarter-point increments. Inflation has remained above the central bank’s 2% target, and recent data suggest price pressures are not easing as quickly as hoped.
Key Perspectives
Austan Goolsbee: Described the October CPI report as “borderline disturbing” and said high inflation is a “major concern,” but did not specify what action he supports at the December meeting.
Christopher Waller: Indicated that a hot inflation report could lead him to push for a half-point rate increase in December, particularly if core CPI was around 0.3%, which it was.
Lorie Logan: Said she sees a need for two additional quarter-point increases and suggested the Fed may need to move faster this winter than it did in the fall.
What to Watch
- The December FOMC meeting, where the committee will decide on the size of the next rate hike.
- The November CPI report, due before the December meeting, which will show whether price pressures are persisting.
- Any additional public remarks from Fed officials during the pre-meeting quiet period.
Checked
12 claims in this story checked against 1 source: 12 supported.
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- SupportedGoolsbee called the inflation report “borderline disturbing.”Finance: “Chicago Federal Reserve President Austan Goolsbee called the latest inflation data "borderline disturbing."”
- SupportedFed officials indicated that the central bank may need to act more decisively on inflation.Finance: “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.”
- SupportedThree Fed officials responded to October inflation data with warnings about inflation and discussion of larger increases.Finance: “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.”
- SupportedGoolsbee said in a Tuesday PBS NewsHour interview, “another distressing report — borderline disturbing.”Finance: “"It's another distressing report — borderline disturbing," Goolsbee said in an interview with the PBS NewsHour Tuesday.”
- SupportedOctober consumer prices rose more than economists had predicted.Finance: “The consumer price index rose 0.4% on a seasonally adjusted basis in October, according to the Bureau of Labor Statistics' Tuesday morning release. That was higher than economists had predicted”
- SupportedGoolsbee did not specify whether he thought the Fed should raise rates in December and said he did not want to tie the Fed’s hands.Finance: “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.”
- SupportedWaller said a hot inflation report could lead him to advocate for a half-point December increase instead of the usual quarter-point move.Finance: “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”
- SupportedWaller said a half-point increase should be on the table if core CPI was “around 0.3,” and core CPI rose 0.3% in October.Finance: “specifically said such a hike should be on the table if core CPI, a metric that removes volatile food and energy costs, was "around 0.3." Hours later, that's exactly what happened.”
- SupportedLogan said she saw a need for two more quarter-point increases and that the Fed could move more rapidly that winter.Finance: “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."”
- SupportedWaller and Logan were voting members this year, and Goolsbee would be a voting member in 2027.Finance: “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.”
- SupportedThe FOMC raised rates by a quarter point in September to 3.75%-4%, then held them steady in October.Finance: “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.”
- SupportedFed funds futures unanimously anticipated a December rate hike; the odds of a half-point December increase were 15%, and the chance of rates reaching 4.25%-4.5% by January was 60%.Finance: “Fed funds futures are now unanimously expecting a rate hike at the December meeting, according to CME's FedWatch tool. ... 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 ... are now at 60%”
