{"text":[[{"start":12.7,"text":"A top US central bank official has warned that the Federal Reserve faces a “double danger” from the Iran war and Donald Trump’s tariffs in its attempt to convince the American public it can bring inflation back under control. "}],[{"start":28.03,"text":"The US and Israel’s attacks on Iran have sent prices at US petrol pumps soaring to their highest level in either of Trump’s terms in the White House, while the impact of the administration’s trade policies on consumer goods continues to linger. "}],[{"start":46.519999999999996,"text":"Austan Goolsbee, the head of the Chicago Federal Reserve, told the FT that the US central bank was at risk from “a little bit of danger on two fronts” at a time when inflation remained above its 2 per cent goal. "}],[{"start":61.959999999999994,"text":"“If we’re going to have high oil prices, we may start seeing consumer inflation expectations rising notably. And to have piled this thing on before the tariff inflation went away, that’s a double danger,” Goolsbee said in Washington on Tuesday afternoon."}],[{"start":80.74,"text":"The visible impact of higher petrol and consumer goods prices threatens to undermine public confidence in the Fed’s role in keeping prices stable. "}],[{"start":91.86999999999999,"text":"Headline personal consumption expenditures inflation has been above the Fed’s 2 per cent goal since early 2021. Alternative consumer price inflation figures for March, published last week, showed costs for US shoppers rising 3.3 per cent."}],[{"start":110.97,"text":"“Anytime you’re floating around well above the [inflation] target for an extended period of time, there’s a danger,” Goolsbee said. “And to add two inflationary shocks, even if they [are] two temporary ones [and] there’s a danger that that gets misinterpreted by consumers or businesses, as something persistent.” "}],[{"start":131.06,"text":"Petrol prices in the US have soared from $2.98 before the war began to $4.118 on Tuesday, according to national average figures from AAA. "}],[{"start":146,"text":"Goolsbee flagged research from economist Yuriy Gorodnichenko that shows consumers’ expectations of future inflation depend greatly on prices at the fuel pump. "}],[{"start":158.25,"text":"If the public begins to think higher costs will be persistent rather than temporary, it can lead people to demand pay rises or businesses to raise prices, which can entrench inflation."}],[{"start":171.23,"text":"While the impact of Trump’s tariffs is expected to be a one-off, Goolsbee said he wanted to see evidence that the effect was going away and inflation was on course towards 2 per cent before supporting interest rate cuts. "}],[{"start":186.38,"text":"Goolsbee, who does not hold a vote on the rate-setting Federal Open Market Committee this year, said earlier on Tuesday that the Fed should put off cutting borrowing costs from their current 3.5-3.75 per cent range until the “disruption” in inflation was in the rear-view mirror. "}],[{"start":205.97,"text":"“The longer this inflation disruption goes, the more likely it is in my view that the appropriate rate cutting would be put off,” Goolsbee told the Semafor World Economy Summit in Washington."}],[{"start":220.21,"text":"Markets are not pricing in any rate cuts by the Fed before the end of 2026, having pencilled in one to two before the Middle East conflict broke out."}],[{"start":231.86,"text":"He also countered views espoused by Fed chair nominee Kevin Warsh that an AI-induced productivity boom would give the US central bank space to cut borrowing costs by boosting productivity — and the economy’s capacity to grow without inflation."}],[{"start":249.91000000000003,"text":"The boom in investment in AI infrastructure was more likely to add pressure to prices in the short run before the US experienced any “supply side bounty”. "}],[{"start":261.90000000000003,"text":"However, he also praised Warsh ahead of his confirmation hearing next Tuesday. “I respect him a lot as a central banker, as a thinker,” Goolsbee said. “I have every expectation he’s gonna take the job really seriously.” "}],[{"start":278.59000000000003,"text":"Additional reporting by Myles McCormick in Washington"}],[{"start":295.41,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1776324187_1574.mp3"}