Fed officials warn that the U.S. economy may be "overheating"! Goolsbee admits April inflation was worse than expected: We have big trouble.

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The inflation monster has forced Fed officials to sound the alarm! Chicago Fed President Austan Goolsbee issued a stern warning today (12th), pointing out that the latest April CPI data suggests the U.S. economy may be in an "overheating" crisis. He emphasized that, excluding energy prices that have soared due to the conflict in the Middle East, the truly worrying factor is the highly sticky "services inflation." Austan Goolsbee admitted that the U.S. is facing a serious inflation problem, and the Fed must take action to break the chain reaction of the wage-price spiral. (Previous coverage: Inflation rebounds! U.S. April CPI rose 3.8% year-on-year, higher than expected; Middle East conflict pushes up oil prices, adding uncertainty to Fed rate cuts) (Background: April CPI alert tonight! Expected 3.7% is a near three-year high; Trump unable to curb inflation) The hot rebound in the U.S. April Consumer Price Index (CPI) has not only panicked market investors but also directly rattled the nerves of Fed policymakers. Chicago Fed President Austan Goolsbee gave a blunt and pessimistic assessment of the current inflation situation in an interview with National Public Radio (NPR) earlier today (12th), warning that the U.S. economy might be in a dangerous state of "overheating." According to a report released earlier by the U.S. Bureau of Labor Statistics, the April CPI year-on-year growth rate reached 3.8%, the fastest pace since 2023. The main driver of inflation is the continued surge in gasoline and energy prices against the backdrop of the Iran conflict. In the interview, Austan Goolsbee did not mince words, stating that this inflation report was "worse than expected." He pointed out that these data clearly show widespread price pressures in the U.S. economy, which is a strong signal that the underlying economy may already be overheating: "We have an inflation problem in this country, and we have to get it down." Although outsiders blame the inflation rebound on rising oil prices caused by Middle East geopolitics, Austan Goolsbee emphasized that the real pain point the Fed is worried about is the acceleration of "services components." He further explained that services inflation is highly sticky and is not directly affected by external tariff policies or soaring international energy prices. If prices in the services sector continue to spiral out of control, the Fed must seriously consider how to intervene aggressively to "break the chain reaction of escalating inflation." Austan Goolsbee's tough remarks reflect the growing anxiety among Fed officials regarding out-of-control prices. During last month's Federal Open Market Committee (FOMC) meeting, policymakers chose to keep interest rates at their current highs; the reality is that U.S. inflation has been above the Fed's 2% target for five consecutive years. As the warning signs of an overheating economy light up, market optimism for the Fed to start cutting interest rates this summer has been almost completely extinguished. Facing the stubborn resistance of inflation, whether the Fed will be forced to implement even tougher tightening measures will become the biggest macro risk for the cryptocurrency and U.S. stock markets moving forward.

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Published:2026-05-12 13:56:36

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