Overview
- Austan Goolsbee made the comments at a London event on Monday, September 21, 2026, saying the Fed would raise rates if demand stays too strong.
- He said supply shocks have become more frequent and longer lasting, which makes it harder to see a clear path back to the Fed’s 2% inflation goal.
- Goolsbee framed the situation as a painful trade-off because using higher interest rates to fight supply-driven inflation will slow hiring and risk job losses.
- He singled out a surge in investment tied to artificial intelligence as a key source of elevated demand that is adding upward pressure on prices.
- Goolsbee also defended the Fed’s independence, warned that political interference would undermine inflation control, and noted markets have so far absorbed his hawkish message while the Fed has already raised rates 25 basis points to 3.75%–4.00%.