Odd Lots · Friday, August 28, 2026
Austan Goolsbee, President of the Chicago Fed, expressed concern that recent inflation data may not be transitory, stating that he needs to see evidence of inflation heading back to the 2% target before supporting further rate cuts. He highlighted that while supply shocks from tariffs and oil prices might be temporary, persistent inflation in services is a deeper concern.
“I'm hopeful that much of it came from those temporary slash transitory factors. And if so, then we should see it. It should go away. We can't, it can't be that each quarter we say, ah, yes, it's about to go away. Just not yet. You know, three months from now. And so that's why I was okay with if we get one or two readings of inflation that are moderating, it's perfectly fine to say, let's wait a meeting or two meetings or whatever. Let's see if this is the heralded introduction of the temporary part.”
“My reaction function is heavily geared toward, I need evidence that this inflation shock is not gonna be persistent. And I'm okay with waiting as we're getting that, but if the evidence starts coming back, especially on services, that it's high, it's going the wrong way, we're not making progress, then I'm going to be nervous.”