BlockBeats report, on May 12, Federal Reserve official Goolsbee stated that, compared to energy prices heavily influenced by geopolitical factors, the Fed is currently more focused on whether rising service prices reflect overheating domestic demand in the U.S. economy.
Goolsbee stated that if service-sector inflation continues to rise and evolves into "embedded inflation," the Fed must consider taking action to "break the escalating inflation cycle." U.S. CPI rose 3.8% year-over-year in April, the highest level since 2023. Although gasoline prices have surged approximately 28% over the past two months, serving as a major driver of overall inflation, Goolsbee noted that price pressures are still intensifying even when excluding energy and tariff-related factors.
Data shows that in April, the cost of core services in the U.S., excluding energy and housing, rose 0.5% month-over-month, with hotel prices posting the largest increase since 2024 and airfare rising 2.8% month-over-month due to higher fuel surcharges and reduced capacity.
Meanwhile, in the United States, the seasonally adjusted real average hourly wage declined by 0.3% year-over-year in April, marking the first negative reading in three years and indicating that income growth has begun to lag behind rising prices.
At the policy level, the Federal Reserve has maintained interest rates above 5% for several consecutive months. As inflation remains persistently above the 2% target, market expectations for rate cuts in 2026 have significantly cooled, and U.S. Treasury yields have recently continued to rise. Goolsbee emphasized that the current key priority is "breaking the inflationary spiral," and upcoming PPI and PCE data will be crucial indicators in determining whether the U.S. economy is experiencing sustained overheating.