Fed's Goolsbee Cautiously Optimistic on Inflation Amid Tariffs and Rising Goods Inflation in Recent CPI Data

Federal Reserve Chair Jerome Powell's colleague Austan Goolsbee has expressed cautious optimism regarding recent inflation readings amid the impact of tariffs. Goolsbee hopes that tariffs, including those with a key deadline on July 9, 2025, will not cause substantial inflation but emphasizes the need for several months of clarity to assess their full effects. He acknowledged that tariffs may modestly increase goods inflation, as reflected in recent Consumer Price Index (CPI) data, and described himself as "a little wary" about rising goods inflation due to tariffs. Fellow Fed official Christopher Waller noted that while some tariff-related costs will be passed to consumers, this is unlikely to result in persistent inflation. Goolsbee also highlighted the importance of Fed independence and suggested that interest rates could decrease over the next year.