Chicago Fed President Austan Goolsbee says the latest U.S. inflation data has been a little better and hopes price growth keeps improving as tariff and oil-price effects fade. Fresh PCE and rate figures show inflation cooling from its spring peak, while traders have largely dropped bets on a near-term Fed move.
Chicago Federal Reserve Bank President Austan Goolsbee said Thursday that the latest U.S. inflation data has been a little better, and he is hopeful that as the effects of tariffs and higher oil prices from the Iran war fade, inflation can continue to improve.
Goolsbee, speaking in an interview with Fox News Channel's Special Report with Bret Baier, said the overall inflation level running near 3% is still too high. According to Reuters, he said "we're mostly watching the inflation component" of the economy right now.
PCE cools from its spring peak
The Fed targets 2% inflation by the 12-month change in the personal consumption expenditures price index, and in June, PCE inflation was 3.7%, down from its recent 4.1% peak in May. The Fed last month held the short-term policy rate in the 3.50%-3.75% range, though at least five of the central bank's 19 policymakers wanted to raise rates instead.
Rate hike bets mostly erased
As recently as last week, traders had been pricing in a Fed rate hike as soon as September. But back-to-back reports this week of milder-than-expected consumer and producer price inflation in July, following last Friday's weak jobs report, have mostly erased the expectation of any near-term Fed move.
Source: Investing.com
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