Fed rate hike debate grows with inflation above 2%

Chicago Fed President Austan Goolsbee has identified inflation above the Federal Reserve’s 2% target as the main U.S. economic problem while officials debate whether to raise rates from 3.50%–3.75%. Summary Goolsbee called inflation the economy’s biggest problem, while describing the labor market as stable but weak. The Fed held rates at 3.50%–3.75% in July, with three officials backing a 25-basis-point increase. Economists expect July headline and core CPI to slow to 3.4% and 2.5%, respectively. Bitcoin fell into the low-$63,000 range as oil prices and inflation concerns reduced demand for risk assets. Why Goolsbee sees inflation as the main challenge Wired released Goolsbee’s interview on Aug. 11 after recording the discussion on June 22, with the Chicago Fed president arguing that fast-rising prices remain more damaging than current labor-market conditions. “The biggest problem facing our economy right now is not the collapse of industry and the collapse of jobs; it’s that the prices have been rising too fast,” Goolsbee said. “We got an inflation problem and people hate inflation.” While assessing employment, Goolsbee pointed to the unemployment rate, hiring and layoffs as the t...