Goolsbee: Energy inflation from Iran war more persistent than expected
12 reported
Chicago Federal Reserve President Austan Goolsbee said Thursday that energy inflation tied to the war in Iran has lasted longer than expected, creating a "stagflationary shock" for Asian economies. Speaking to CNBC's Kaori Enjoji at the Bank of Japan-IMES Conference, Goolsbee noted that initial futures market estimates had expected energy prices to be "a lot lower" than current levels. While oil prices have eased recently on signs of progress in U.S.-Iran peace talks, prices remain well above levels seen before the war. Brent crude futures gained over 1.81% to $96 per barrel, and West Texas Intermediate futures gained 1.71% to $90.21 per barrel, compared with $72 for Brent and $67.02 for WTI the day before the U.S. and Israel launched strikes on Iran. Goolsbee, who voted against the Federal Reserve's final rate cut in 2025, said he dissented because he wanted evidence that inflation would not be persistent, adding that inflation has not proved as temporary as advertised. He also expressed concern that stock market gains linked to artificial intelligence could overheat the economy before actual productivity benefits materialize.
What’s reported
Energy inflation tied to the war in Iran has lasted longer than expected, according to Chicago Fed President Austan Goolsbee.
Goolsbee spoke to CNBC's Kaori Enjoji at the Bank of Japan-IMES Conference.
Initial futures market estimates had expected energy prices to be "a lot lower" than current levels.
Oil prices have eased recently on signs of progress in U.S.-Iran peace talks but remain above pre-war levels.
Brent crude futures gained over 1.81% to $96 per barrel; WTI futures gained 1.71% to $90.21 per barrel.
Pre-war prices were $72 for Brent and $67.02 for WTI the day before U.S. and Israel launched strikes on Iran.
Goolsbee said Asian economies face a "stagflationary shock of the old-fashioned variety" because they are energy importers.
Goolsbee voted against the Federal Reserve's final rate cut in 2025 and does not regret dissenting.
He said if inflation moves back toward the Fed's 2% target, interest rates would "ultimately settle at some place well below where they are today."
Goolsbee warned that stock market gains from AI could overheat the economy before actual productivity increases occur.
He said policymakers should watch for signs that AI-linked stock market gains spill into broader inflation pressures.
Goolsbee noted the same AI dynamic could eventually affect Asian economies because new technologies rarely remain concentrated in one country.
Key figures
Austan Goolsbee, Chicago Federal Reserve President
Kaori Enjoji, CNBC correspondent
Sources: CNBC
