Fed's Goolsbee calls inflation report 'borderline disturbing' as central bank weighs more hikes

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 the PBS NewsHour Tuesday.

"We've got a real inflation issue on our hands that has been developing," Goolsbee said. "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 morning release. That was higher than economists had predicted, and the third straight month of outsized price increases.

Goolsbee said he had not seen drivers of prices like tariffs fade over time like he had 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."

Tuesday's inflation report landed at a critical juncture for the central bankers at the Federal Reserve as they considers their next interest-rate move — and the moves they may have to make in the months ahead 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 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, a metric that removes volatile food and energy costs, 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."