Goolsbee warns the Fed may need to act more aggressively if U.S. demand remains overheated
๐ Chicago Fed President Austan Goolsbee said the Fed cannot automatically look through supply shocks if oil, tariffs, and supply-chain disruptions become persistent. Services inflation remains elevated, while AI and data-center investment could continue adding pressure to overall demand.
โ ๏ธ In remarks to reporters, he said that if inflation is being driven by excessive demand, the policy response may need to be more aggressive and front-loaded, with another 25-basis-point hike potentially not enough.
๐ The key takeaway is that the Fedโs debate is broadening from oil-driven supply shocks to the strength of domestic demand. If incoming data confirms sticky services inflation, expectations for higher-for-longer rates could add pressure to long-duration bonds and growth stocks, particularly AI-related names.
#Fed $AR
๐ Chicago Fed President Austan Goolsbee said the Fed cannot automatically look through supply shocks if oil, tariffs, and supply-chain disruptions become persistent. Services inflation remains elevated, while AI and data-center investment could continue adding pressure to overall demand.
โ ๏ธ In remarks to reporters, he said that if inflation is being driven by excessive demand, the policy response may need to be more aggressive and front-loaded, with another 25-basis-point hike potentially not enough.
๐ The key takeaway is that the Fedโs debate is broadening from oil-driven supply shocks to the strength of domestic demand. If incoming data confirms sticky services inflation, expectations for higher-for-longer rates could add pressure to long-duration bonds and growth stocks, particularly AI-related names.
#Fed $AR
