Chicago Fed President says its “Too Early to Declare Victory over Inflation”

Austan Goolsbee, President of the Chicago Federal Reserve Bank, emphasized on Sunday that the Federal Reserve’s battle against inflation is ongoing, despite positive signs of easing inflationary pressures without causing a recession. Last week, the Federal Open Market Committee (FOMC), the Fed’s policy-making body, refrained from further rate hikes, maintaining the federal funds rate at 5.25% to 5.5%, a 22-year high.

This decision follows a series of aggressive rate increases initiated last year to curb inflation, which had soared to a 40-year peak of 9.1% in June 2022 and has since fallen to 3.1% in November, still above the Fed’s 2% goal. Speaking on CBS’ “Face the Nation,” Goolsbee cautioned that, despite significant progress in 2023, the inflation fight is not yet complete. He highlighted that historical trends show efforts to significantly lower inflation are typically linked with major recessions.