Chicago Federal Reserve Bank President Austin Goulsby said that although policymakers must pay close attention to whether tariffs and other price shocks will continue, the latest data shows that the situation is not “bad.” In a podcast recording released on August 27, Goulsby said, “If you look at three months of inflation data, the situation is not bad.” The situation has “moved slightly back in the direction of improvement.” Goulsby said, “Roughly speaking, I think in a situation where the inflation rate is 2%, the 3% interest rate — that is, the real interest rate of 1% — for me, is generally a broad target for the development of the situation. All of this depends on inflation having to fall back towards 2%”. He said, “We have wars, related taxes, and many other factors that are driving up inflation, and we are trying to figure out whether these are continuing inflationary shocks.” Goulsby said the tariffs “were supposed to be just a one-off effect. But this is only the case if it ends once, rather than constantly adding new tariffs”.

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