NEW YORK: Federal Reserve Bank of Chicago president Austan Goolsbee says policymakers still have a way to go on cooling inflation, but that the trade-offs between bringing down prices and keeping employment high are going to be heightened in 2024.

Goolsbee said that the question of whether inflation can keep coming down as easily as it did last year is a more difficult one this year.

A report earlier showed a key gauge of consumer prices rose by more than forecast for a third month in a row in March.

“These first three months of this year, they’re definitely worse,” Goolsbee said at a virtual event with the Social Finance Institute in Cambridge, Massachusetts.

“I still think that we have a little bit of mileage to go but we’re getting to the point where there’s going to be more trade-offs than there were last year.”

The inflation news added to concerns that last year’s rapid progress on cooling consumer-price gains is stalling out.

Policymakers have said they need further evidence inflation is moving toward their 2% target in order to start cutting interest rates.

At the same time, officials expected the path back to that goal to be bumpy.

“I think we’re making a lot of progress but we need to be humble about how easy it is to get there,” Richmond Fed president Thomas Barkin said at the same event, adding that Wednesday’s figures suggest it may just take some time to get inflation back down.

Barkin is a voter on this year’s policy-setting Federal Open Market Committee.

Markets have pushed out bets of when that first rate cut might come to September, from June last month.

Fed officials still estimated three cuts this year at their meeting in mid-March, but some have said the inflation data from the start of the year, coupled with still-strong economic growth and robust job gains, might mean fewer cuts are needed.

Goolsbee pointed to three straight months of rising Black unemployment, calling it an indicator of “caution” that the Fed should pay attention to.

He doesn’t vote on policy this year.

Earlier this month, Goolsbee said that hotter-than-expected inflation readings in January and February likely didn’t change the broader picture of cooling prices.

He’s previously said he’s closely watching housing inflation, which, along with petrol, accounted for more than half of the overall 0.4% monthly advance in the March consumer price index.

Barkin noted earlier this month said that the “less encouraging” inflation data of the start of the year justified a more patient approach to policy.

 - Bloomberg