Federal Reserve's Goolsbee: Inflation Not Back to 2% Target, AI Construction Driving Prices Up

On November 13, Chicago Federal Reserve President Goolsbee stated that inflationary pressures in the U.S. have spread from energy and tariffs to broader economic sectors, with strong demand for artificial intelligence infrastructure construction driving prices higher. He believes that U.S. inflation has not yet returned to the Federal Reserve's 2% target, and the central bank needs to take action to prevent overheating demand from causing sustained inflation. Goolsbee pointed out that current inflation is no longer a temporary issue caused by rising energy prices or supply shocks; the construction of AI data centers is driving demand for related goods and services, making price pressures more persistent. Inflation in the service sector and rising healthcare costs are unlikely to ease in the short term. He emphasized that wage growth is a lagging indicator and that current price pressures cannot be judged solely based on wage data. Regarding future monetary policy, Goolsbee stated that the Federal Reserve must maintain its credibility in controlling inflation, and if economic demand continues to overheat, inflation risks cannot be ignored. Upcoming inflation data will determine whether the Federal Reserve needs to accelerate the pace of interest rate hikes. Additionally, Goolsbee warned that even if international oil prices fall, U.S. refining capacity remains constrained, which could keep diesel and jet fuel prices elevated, prolonging the impact of energy costs on inflation.

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