Fed's Goolsbee says tariffs are a 'stagflationary shock' on U.S. economy

[U.S. Federal Reserve]

Federal Reserve Bank of Chicago President Austan Goolsbee said Wednesday that "tariffs are a stagflationary shock" that complicates the U.S. central bank's dual goals of stable prices and full employment.

Tariff-induced price pressures have started to show up in the data, coupled with a low hiring, low firing labor market, Goolsbee said in a fireside chat at an event. The Fed needs to decide which side of its mandate is "going wrong more and how long is each side going to last."

The idea of ignoring one-time tariffs because of a transitory price impact "makes me uneasy," Goolsbee said.

This is a developing story. Check back for updates.

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