Inflation has spread into categories where prices not driven by energyThe jobs market looks stable, if not tightening a bitRates will eventually go well-below todayWe have had signs of trouble for several months in a row nowLately we’re not making any progress and if anything, it’s going the wrong wayInflation is rising and proving far more persistent than expected when it was just a matter of supply shocksThe Fed "definitely has work to do" to maintain its credibilityServices inflation and rising health care costs don't feel like they will change quicklyEven if the price of oil goes down rapidly, refining capacity is still very problematicMy feeling is that right now we're not on the way to 2% and we have to deal with thatDemand-overheating inflation shocks are extremely hard to get rid ofUntil about six months ago I thought AI overheating was staying in its lane; I’ve begun to change that viewThe tariff and oil price shocks were supposed to have gone away by nowThis is the guy who used to be the most reliable dove on the FOMC. He’s now talking about demand overheating and Fed credibility.He was pushed on 25 bps versus something faster in December and wouldn’t bite, but he didn’t push back on the premise either. He was also asked about Bessent’s warning, which invoked the ECB hiking in 2008 right before the financial crisis. He was polite about it and then went straight back to inflation persistence.There’s an out here. If tariffs, oil and the AI squeeze all ease, he’s comfortable going slow. But he’s not forecasting that, he’s hoping for it. Goolsbee votes in 2027. This article was written by Adam Button at investinglive.com.