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Goolsbee urges Fed caution after inflation rise
Chicago Federal Reserve President Austan Goolsbee said recent inflation data represented “bad news” for the United States central bank and underscored the need for policymakers to remain cautious about cutting interest rates until there is clearer evidence that inflation is moving back towards target. Speaking on Fox News’ “The Journal Editorial Report” on Saturday, Goolsbee pointed to persistent inflation pressures as a reason for restraint in monetary policy decisions. "The inflation side was bad news, in the last twelve months we are running higher than 3% inflation." The comments followed data released last week showing the personal consumption expenditures (PCE) price index, the Federal Reserve’s preferred inflation gauge, rose at an annual rate of 3.5% in March, well above the Fed’s 2% objective. “We have got to get some assurance that we are on a path back to the 2% inflation target,” Goolsbee said. When asked whether the Federal Reserve had been too accommodative for too long, Goolsbee defended his long-held concerns about easing policy prematurely. "I didn't want to front load the rate cuts, presuming that inflation is going to be transitory, it felt like the fed made that mistake before … I ended up dis
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UK retail sales volumes hit lowest levels in 40 years
United Kingdom monthly retail sales volumes dropped to their lowest level since 1983 in April, according to a CBI survey. According to the survey, retail sales volumes for this time of year were judged to be ‘poor’, dropping to -68 from -52 in March. Sales are expected to continue to decline at a sharp pace next month. According to Reuters, 77% of firms reported that sales were down compared to a year ago, while only 9% reported a sales increase. Retail sales for the time of year were judged to be “poor” in April, reaching -32 and are set to plunge even further to -43. Online retail sales volumes had the most negative outlook of -68 from -58 in March, but are expected to recover at a modest pace next month. CBI lead economist Martin Sartorius said many firms reported headwinds from high costs and muted demands following the war in Iran, and that conditions deteriorated in April on the back of weaker consumer confidence. “With the economic impact of the Iran conflict becoming clearer, firms will be looking to government to recognise that easing cost of living pressures depends on tackling the cost of doing business,” Sartorius said. “For the distribution sector, that means securing appropriate landing zones on
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Warsh backs Fed independence, narrows focus
Federal Reserve chair nominee Kevin Warsh has stressed the importance of central bank independence while warning policymakers to remain focused on core monetary objectives. In prepared remarks set to be delivered to the Senate Banking Committee, Warsh said the Federal Reserve must remain largely insulated from political pressure but also avoid straying beyond its mandate. His comments come as scrutiny intensifies over the role of politics in shaping U.S. monetary policy. “Simply stated, Fed independence is largely up to the Fed,” Warsh said. Warsh reiterated his commitment to tackling inflation, with his remarks placing far greater emphasis on price stability than on employment conditions. The balance between these dual mandates has been a focal point for policymakers in recent years. A central theme of his speech was criticism that the Fed has expanded its remit into areas beyond its traditional scope, including climate change and social inequality. “The Fed must stay in its lane. Fed independence is placed at greatest risk when it strays into fiscal and social policies where it has neither authority nor expertise,” he added. Warsh was nominated in January by U.S. President Donald Trump to succeed current Fed
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Global leaders rely on US to deal with damages of war
Global leaders impacted by the war in the Middle East discovered they had little power to mitigate the economic damages of the war and instead will have to count on the United States leadership to resolve the crisis. During the International Monetary Fund (IMF) and World Bank Spring Meetings in Washington, participants swung from pessimism over the current economic outlook due to rising energy prices and supply shocks to tentative optimism as it appears Iran may open the Strait of Hormuz. However, this began to fade amid new attacks on shipping. The IMF and the World Bank pledged up to a combined US$150 billion (A$209 billion) in new financing assistance for developing countries hit hardest by the massive energy price shock, and celebrated their re-engagement with Venezuela’s acting government after a seven-year pause. The organisations have warned countries not to hoard oil and not to go overboard with expensive and untargeted fuel subsidies. Atlantic Council international economics chair Josh Lipsky said the meeting isn’t where the most important economic decisions are being made, as the world awaits statements from Tehran and the White House. “The single most important development in the global economy happene
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Global interest rates face new inflation shock era
The global interest rate outlook is being rapidly reshaped by a new wave of inflationary pressures, as policymakers and financial leaders warn that the economic fallout from the Iran war could mark the beginning of a more volatile and prolonged period of elevated borrowing costs. What had been a gradual path towards lower inflation and policy normalisation has been disrupted by surging energy prices, supply chain fragmentation and rising geopolitical tensions. Together, these forces are raising the prospect that interest rates will remain higher for longer, and may even face further upward shocks.Central banks brace for repeated inflation shocksWarnings from policymakers suggest inflation is no longer a one-cycle problem. In a recent address, Chicago Federal Reserve President Austan Goolsbee cautioned that economies could face successive inflationary shocks rather than a smooth return to price stability. "The prices spiked from tariffs and they were supposed to go away, and this is now hitting before that went away," Goolsbee said at the Detroit Economic Club. "The possibility of a stagflationary outbreak coming from high oil prices before the tariff inflation went away, leading ⁠to the main engine of growth - the

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Bessent says US economic growth may slow
United States Treasury Secretary Scott Bessent said the economy will be slower this quarter due to the war in Iran, but it is in good shape to rebound. In an interview with CNBC, Bessent said while oil prices have risen, he doesn’t expect the war to greatly impact inflation. He also said he expects gas prices to decline. “I think the gas prices will start coming down pretty quickly,” he said. “We’ve had the big declines in the past two weeks.” This comes as average gas prices decrease across the U.S., despite remaining significantly higher than before the war in Iran started and the Strait of Hormuz was blocked. While economic growth is expected to be slower in the next quarter, Bessent said the U.S. economy was strong enough in the first quarter that it shouldn’t be a major issue. “We’ve heard the president say that one of the reasons he believed that he was able to prosecute this war now and you know other than he believed it was the right time to prevent Iran from having a long-term nuclear weapon, and to decapitate the regime was that the economy was in such good shape,” he said. While Bessent said he doesn’t know when the war is going to end, he told the BBC that he was less concerned about the economi
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World Bank readies US$100bn war aid
The Washington D.C.-based World Bank could mobilise between US$80 billion and $100 billion in financing over the next 15 months to support countries hit hardest by the war in the Middle East, outlining a response that would exceed the institution’s $70 billion deployment during the covid crisis. Proposed funding, announced on the sidelines of the spring meetings of the International Monetary Fund and World Bank, reflects a rapid escalation in concern among global economic institutions over the war’s widening impact on growth, inflation and financial stability. Early projections indicate the shock is already feeding through energy markets and fiscal balances, particularly in developing economies. The bank’s president, Ajay Banga, told the market yesterday that $20 billion to $25 billion could be made available in coming months, allowing countries to draw down up to 10% of previously approved programme funds ahead of schedule. An additional $30 billion to $40 billion could be generated within six months by repurposing existing programmes. Additional financing will require the use of the bank’s balance sheet capacity if the conflict persists. “I’m trying to create a toolkit that has a tiered response capacity,” Bang
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Fed signals rate cut despite geopolitical uncertainty
Minutes from the Federal Reserve’s March policy meeting released on Wednesday (Thursday AEST) indicate officials still expect to lower interest rates this year, even as uncertainty linked to geopolitical tensions and trade policy clouds the economic outlook. Members of the rate-setting Federal Open Market Committee acknowledged that the ongoing conflict involving Iran and rising tariffs could complicate the path for monetary policy, particularly if higher energy costs begin to weigh on households and employment. Most participants suggested that escalating fuel prices could ultimately justify a more accommodative stance if they materially impact consumer spending and labour market conditions. Policymakers emphasised the need to remain “nimble” as they assess how these dynamics influence inflation, which continues to run above the central bank’s 2% target, and employment growth, which has remained largely stagnant over the past year. “Many participants judged that, in time, it would likely become appropriate to lower the target range for the federal funds rate if inflation were to decline in line with their expectations,” the minutes said. The committee’s central expectation remained for one rate cut in 2026, unchange
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JPMorgan's Dimon on playing President and arming America
If you want to understand the true intersection of high finance and Washington, look no further than Jamie Dimon’s 2026 annual letter to shareholders. As has become tradition, the banking giant's chief executive treats his yearly dispatch less like a corporate financial update and more like a sweeping State of the Union address. This year, however, the tone is uniquely sharp and undeniably defensive. Dimon is staring down a volatile mix of global warfare, shifting critical mineral supply chains, and a bloated United States deficit. In response, he has unleashed some of his most pointed criticisms yet against the regulatory state, while firmly planting his institution squarely in the middle of the military-industrial complex.The regulatory tiradeDimon has never been shy about his disdain for government overreach, but in 2026, the gloves are fully off. While he acknowledges that the U.S. economy has remained remarkably resilient, he is quick to caveat that this strength is largely a sugar high fueled by massive government deficit spending. His real venom, however, is reserved for financial watchdogs. He explicitly targets the proposed Global Systemically Important Bank (GSIB) capital surcharge, arguing it aggressively