Chicago Fed's Goolsbee says he sees inflation as risk to 2026 rate cuts

MoneyWatch Chicago Fed President Austan Goolsbee sees inflation from Iran war as risk to 2026 rate cuts By Aimee Picchi Aimee Picchi Associate Managing Editor, MoneyWatch Aimee Picchi is the associate managing editor for CBS MoneyWatch, where she covers business and personal finance. She previously worked at Bloomberg News and has written for national news outlets including USA Today and Consumer Reports. Read Full Bio Aimee Picchi April 3, 2026 / 5:35 PM EDT / CBS News Add CBS News on Google Federal Reserve Bank of Chicago President Austan Goolsbee thinks that the Iran war risks fueling inflation, which would make it harder for the central bank to ease interest rates in 2026. Goolsbee — who emphasized he was speaking for himself and not for the Federal Reserve as a whole — told CBS News that, before the start of the conflict, he was confident the Fed could cut its benchmark rate this year. But that optimism has waned as the war drives up oil and fuel prices. "Before the war, before we got the oil shock, I've been on the optimistic side of the rate — I believed rates could come down even multiple times in 2026," Goolsbee said. The energy shock "complicates that picture for me — that if we're truly not going to see any improvement in inflation, to me that starts pushing these decisions off to 2027 at the earliest," he said. The Fed in March left the federal funds rate — what banks charge each other for short-term loans — unchanged because of mounting economic uncertainty amid the Iran war, although policymakers indicated they still expected to cut rates once in 2026. Since then, energy costs have continued to rise, with the average price of gasoline hitting $4.09 a gallon on Friday, more than $1 higher than before the war. In 2026, Goolsbee is serving as one of five alternate members of the Federal Open Market Committee, the central bank's rate-setting panel. He participates in discussions and contributes to economic assessments, and is slated to rotate onto the comm...