During an interview with CNBC, Austan Goolsbee expressed his concerns regarding the latest inflation data, particularly following the Bureau of Labor Statistics' report showing a 0.3% increase in the producer price index for October, leading to a 6.5% annual gain, the highest since November 2022.
Goolsbee noted that the Federal Reserve is straying further from its 2% inflation target, emphasizing that inflation has proven to be more persistent than anticipated, exacerbated by demand pressures linked to the AI data center buildout.
Markets are currently anticipating a quarter-point interest rate increase at the upcoming Federal Open Market Committee meeting on December 8-9, with a slight chance of a half-point hike.
Goolsbee, while not a voting member of the FOMC until 2027, acknowledged the Fed's need to reassess its approach to inflation, stating that the current trajectory does not suggest a return to the 2% target anytime soon