Fed’s Goolsbee shrugs off CPI report, points to inflation trend

FEDERAL Reserve Bank of Chicago president Austan Goolsbee said he was not overly concerned with a higher-than-forecast September inflation report and stuck by his view that the US central bank has moved past its singular focus on price pressures.

“The overall trend over 12 to 18 months is clearly that inflation has come down a lot and the job market has cooled to a level which is around where we think full employment is,” Goolsbee said on Thursday (Oct 10) in an interview on CNBC.

Underlying inflation rose more than forecast in September, data released earlier on Thursday showed. The so-called core consumer price index – which excludes food and energy costs – increased 0.3 per cent for a second month, disrupting a string of lower readings. The three-month annualised rate advanced 3.1 per cent, the most since May, according to Bloomberg calculations.

The new report, along with a strong September employment report, is likely to support calls for the Fed to move more gradually in the coming months after lowering borrowing costs by a larger-than-expected half percentage point on Sep 18.

Goolsbee, who is considered more willing to cut rates than many of his colleagues said there had been a series of “close-call-type” meetings by the Federal Open Market Committee in recent months.

“There will probably be more close call-type meetings,” he said. BLOOMBERG