Austan Goolsby, President of the Federal Reserve Bank of Chicago, speaks at the 29th Milken Institute World Conference at the Beverly Hilton on May 6, 2026 in Beverly Hills, California.
Patrick T. Fallon | AFP | Getty Images
Chicago Fed President Austan Goolsby said Thursday that energy inflation caused by the Iran war is lasting longer than expected, causing a “stagflation shock” for Asian economies.
Speaking with CNBC’s Kaori Enjoji at the Bank of Japan’s IMES conference, Goolsby said that initial forecasts in the futures market expected energy prices to be “much lower” than current levels.
There are signs of progress in peace talks between the United States and Iran, and oil prices have fallen recently, but they remain well above pre-war levels.
International benchmark Brent crude oil futures rose more than 1.81% to $96 per barrel, while West Texas Intermediate futures rose 1.71% to $90.21 per barrel.
This compares to Brent’s price of $72 and WTI’s price of $67.02 the day before the US and Israel launched their attacks on Iran.
Mr. Goolsby also issued a warning for Asian economies, saying that because Asia is an energy importer, “this is more of a classic kind of stagflation shock.”
The Chicago Fed president, who voted against the Fed’s final rate cut in 2025, said he did so because he wanted evidence that inflation would not persist.
“I don’t regret voting against it at that meeting because it turns out that inflation is not as temporary as initially advertised,” he added.
But Goolsby said that if inflation starts to return to 2%, interest rates will “eventually settle to levels well below current levels.”
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