Fed's Goolsbee Believes Inflation Still Higher Than Where It Needs To Be — 'We Are Improving... Haven't Succeeded'

Federal Reserve Bank of Chicago President and CEO, Austan Goolsbee reportedly said the central bank has not yet succeeded in bringing down inflation to the level it prefers.

"The law gives the Fed two jobs, maximize employment, stabilize prices. We have done very well on the employment side. We are improving on the inflation side, but we have not succeeded. Inflation’s still well higher than where we want it to be," Goolsbee told CBS News.

"…at a moment of banking crisis, it will be a great relief if we raise the debt ceiling, we go back to dealing with the, with the matters at hand, which are the real economy side of, of employment and inflation," he added.

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Policy Rate: The markets have so far focused entirely on the debt ceiling crisis, ignoring any sound bytes related to inflation, recession or the Federal Reserve. However, with a tentative debt limit deal in place, Wall Street's attention will gradually move toward the central bank's June policy. Traders are factoring in a 60% probability that the Fed will hike its policy rate by 25 basis points during the next meet.

On being asked if he wants to raise interest rates at the Federal Reserve's next policy meeting in June, Goolsbee said that as a voting member of the FOMC, he does not want to prejudge, especially when there are lot of important data scheduled to be released.

"…the actions that the Fed takes, take months or even years to work their way through the system. So the Fed has raised the interest rate by five full percentage points over the last year. That’s the fastest increase in decades, rivaling ever. And some part of that still has to work its way through the system," he said.

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