Goolsbee: The Fed Has to Own Its Inflation Failure

Federal Reserve Bank of Chicago President Austan Goolsbee put it bluntly on Monday: the central bank has to own its miss on prices. Appearing at a moderated Q&A during a Leadership Greater Chicago event, he said the Fed must accept a cost-side and inflation-side failure in its mandate.

He split the dual mandate cleanly. Employment and growth are holding up, in his telling — the labor side looks pretty stable. The trouble, he said, is concentrated entirely on inflation, where he described the big problems sitting.

What nags at the Fed, per Goolsbee, is why price growth has not faded faster. Inflation is now picking up in corners that have little to do with oil prices or tariffs, with services among the pockets he flagged.

Then he pointed at a newer culprit. The buildout of AI data centers, Goolsbee said, increasingly looks to him like old-fashioned demand overheating.

Goolsbee's remarks landed at a moment when the Fed is still searching for a read on sticky services prices. He offered no timeline and no prescription in the session — just a candid framing of where he thinks the problem lives.