Fed’s Goolsbee Flags Services Inflation as Key Concern After CPI Report

Federal Reserve Chairman Austan Goolsbee expressed fresh concerns over services sector inflation, even as headline price growth has moderated in recent months. Speaking after the latest Consumer Price Index (CPI) release, Goolsbee noted that while overall inflation has been mild for several months, the services category remains “worrying.”Inflation BreakdownHeadline CPI: Mild inflation for several months.Services CPI: Latest data shows a notable uptick, raising concerns about persistent price pressures in labor-intensive industries such as housing, health care, and transportation.Policy ImplicationsGoolsbee’s comments could signal caution within the Fed ahead of the September 16–17 FOMC meeting. Persistent services inflation often reflects deeper wage and cost pressures, making it harder to bring overall inflation back to the Fed’s 2% target.Hawkish Tilt Possible: If services prices remain elevated, the Fed may delay further rate cuts.Market Reaction: Treasury yields edged higher, while the dollar’s earlier losses slowed. Risk assets such as equities and crypto saw muted gains on the remarks.Why It Matters for MarketsEquities: Higher-for-longer rates could slow momentum in growth stocks.Crypto: Persistent inflation risks could keep the Fed cautious, tempering bullish sentiment driven by recent CPI moderation.Forex: The dollar may find short-term support if rate cut expectations fade.