Fed’s Goolsbee says latest inflation data is better

Chicago Federal Reserve President Austan Goolsbee expressed optimism regarding the latest U.S. inflation data on Thursday, stating that it has shown improvement. He is hopeful that as the impacts of tariffs and higher oil prices due to the Iran war diminish, inflation can continue to decline towards the central bank's target of 2%. Goolsbee made these remarks during an interview with Fox News Channel’s Special Report with Bret Baier.

Currently, the overall inflation level stands at 3%, which the Fed considers too high. The good news is that the recent data has been slightly better than previously reported. In June, the personal consumption expenditures price index (PCE) inflation rate was 3.7%, a decrease from its peak of 4.1% in May.

Earlier this week, traders had been anticipating a potential Fed rate hike as early as September. However, the release of two sets of back-to-back reports this week, featuring milder-than-expected consumer and producer price inflation in July following a weak jobs report, has largely neutralized the expectation of any near-term Fed rate increase.

Goolsbee acknowledged that while inflation has been elevated and progress has been stalled, there have been better readings over the past couple of months. However, he emphasized that the economy remains in a delicate state, with a focus on closely monitoring the inflation component.