Austin Goolsbee said that services prices in the US have been accelerating for several months. He said this on Monday, November 9, a day before the inflation data release.
Goolsbee heads the Federal Reserve Bank of Chicago and participates in the Fed's rate decisions. CPI is the consumer price index, the main measure of inflation in the country.
For a trader, the cause of price growth matters. As long as services are getting more expensive, the explanation "it's all import tariffs" stops working, and a rapid rate cut becomes harder to expect.
What did Goolsbee say?
The speech took place at a Leadership Greater Chicago event in a Q&A format. His wording:
- "the whole big problem is on the inflation side"
- "we're going to have to acknowledge a miss on inflation"
- "we're starting to see inflation accelerate in services"
- "like old-fashioned overheating" - that's how he described data center construction
He spoke more calmly about the economy. Goolsbee called employment and growth "fairly stable", and consumer spending the main engine of the economy.
Why is this inconvenient for the market?
The whole difference lies in what exactly is getting more expensive. That is what decides whether the Fed can cut rates quickly.
- Tariffs. A one-time effect: prices jump once and then stay at the new level.
- Services. Sustained growth: it drags on for months and does not fade on its own.
How did the market react?
By Monday evening, money was leaving the dollar after Friday's jobs report.
- $4,100 - gold returned above this level and gained more than 1%
- 1.3400 - GBP/USD rose above this mark
- 158.00 - USD/JPY is holding around this level
- 0.6900 - AUD/USD is near this mark on news that China extended the suspension of its 24% tariff on American goods
What does this mean for a trader?
The main point: if inflation is sitting in services, the Fed's pivot to rapid rate cuts is postponed. The dollar and gold will move on every new price figure.
Choosing the instrument matters more than the forecast. Before such releases, it's worth picking a challenge for your markets in advance and checking whether news trading is allowed.
What's next?
Tuesday, November 10, 16:30 MSK - the US consumer inflation report. This is the nearest date that will decide whether gold's rebound and the dollar's pullback hold, and it is already in the economic calendar.
- Scenario A. The figures confirm acceleration in services - sharp moves in the dollar, gold and indices in the first minutes after publication.
- Scenario B. Inflation comes in softer - volatility shifts in favor of risk assets, the dollar continues to give back Friday's gains.
Will you be sitting in a position at 16:30?
The entire daily move in the dollar and gold is packed into the half hour around the inflation data. This is exactly where prop programs differ the most. One forbids holding a position two minutes before the release, another considers such a trade normal, a third will zero out the account on the daily drawdown at the very first spike. News trading rules are read before paying for the evaluation, not in support after a block. Selection by market and style will filter out programs where Tuesday is closed for you.