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Fed's Goolsbee: Inflation now the greater risk, watching expectations closely - CNBC

BY Reuters | ECONOMIC | 03/23/26 09:09 AM EDT

WASHINGTON, March 23 (Reuters) - Inflation is the greater risk facing the U.S. economy right now with the unemployment rate remaining fairly stable, Chicago Fed President Austan Goolsbee said on Monday, though a quick resolution of the Iran conflict could still leave the Fed poised to cut rates later this year.?

With high gas prices threatening to influence consumer expectations, "at the moment I think inflation has got to be a little ahead of employment" as a Fed priority, Goolsbee said on CNBC's Squawk Box. "To have already been at an inflation rate that was uncomfortably high...and now to add something that might be a lasting gasoline price shock, this is an intense moment and we have to hope that this does not prove to be a lasting impact on the economy."

(Reporting by Howard Schneider; Editing by Toby Chopra)

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In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

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