Goolsbee Says Inflation Still Trending Wrong Way, Echoes Warsh on Rate Path

Chicago Federal Reserve President Austan Goolsbee said inflation remains the central bank's primary concern, warning that underlying price pressures continue to move in the wrong direction despite some recent improvement. Speaking in a CNBC interview Thursday, Goolsbee said core inflation is still well too high and trending the wrong way, and the Fed needs to see improvement on that front. He acknowledged a few bright spots but said policymakers have more work to do before inflation can be considered under control.

Goolsbee pointed specifically to services inflation, where he noted some encouraging developments but stressed that progress remains insufficient. He said there has been a little bit of improvement on services inflation, which he has been identifying as something the Fed would want to see. Even so, he concluded that between the two sides of the Fed's mandate, the inflation side and the job market side, the problem is clearly on the inflation side. He also noted that while oil prices could fall rapidly after their recent surge, services inflation remains elevated and moderating wage growth offers no guarantee inflation will ease.

Despite his hawkish assessment, Goolsbee declined to offer guidance on the next policy move. He refused to speculate on whether the Fed should raise rates or keep them unchanged, saying he agreed with Chair Kevin Warsh's approach of avoiding unnecessary market speculation over the future rate path. His remarks reinforce the Fed's broader message that policymakers remain focused on restoring price stability while leaving future decisions dependent on incoming data.

The comments come as markets price a roughly 60% chance the Fed holds rates steady at the next meeting, according to CME FedWatch data. The dollar index held near session highs after the interview, with Treasury yields edging up as traders trimmed bets on near-term cuts. Goolsbee's refusal to engage on the rate path mirrors Warsh's recent public posture, which has kept the committee's optionality open heading into the next data cycle.

For traders tracking the forex market analysis, the key transmission channel runs through the dollar and short-dated yields. A sustained run of sticky services prints would push the first-cut probability deeper into 2026, supporting the dollar against currencies where central banks are closer to easing. The next scheduled data point is the February PCE report due March 28, which will show whether the core services trend Goolsbee flagged is still moving the wrong way.