Bessent says the Fed should not hike over an energy shock, Goolsbee says there is work to do, and a December rate hike stays priced at 91.5%
The two interviews came within hours of the October producer price report, covered in our report on the PPI results, and less than four weeks before the Fed's final meeting of the year.
What happened
Bessent spoke in a CNBC interview on Friday, November 13, as reported by Reuters and carried by Investing.com. His argument was that the current inflation is driven by an energy supply shock linked to the conflict involving Iran, that the shock is already easing, and that tightening hard into it would be a mistake. He described the underlying economy as very strong and the inflation data as very noisy, and said a central bank is supposed to look ahead rather than in the rearview mirror. He noted that the Fed was cutting rates last year and said a sharp reversal based only on an energy shock is not what he would do if he sat on the committee. He added that he does not sit on it, would not tell the Fed what to do, and wants officials to keep an open mind.
Goolsbee followed on CNBC's Squawk Box, according to Investing.com. His reading of the data was close to the opposite. He said price pressure has spread beyond energy and tariffs into services and health care, categories that do not normally move with oil, and that heavy demand from the build-out of AI data centres is adding to it. Asked whether the economy is on a path back to 2%, he said his feeling is that it is not and that the Fed has to deal with that. He said the Fed cannot look through inflation if demand is overheating and that it definitely has work to do to protect its credibility. He stopped short of calling for a larger move in December, saying the coming inflation reports will decide whether a faster pace of increases is needed. Reuters noted that some officials have discussed a half-point increase at the December 8 to 9 meeting.
What the market is pricing
Prices are from BetG8's live Fed rate decision odds page, which reads Kalshi and Polymarket every five minutes. The earlier Polymarket column is the reading taken by our markets desk at 14:44 UTC, after the first headlines from the two interviews. The current columns are as of 17:08 UTC.
| Fed decision | Polymarket 14:44 UTC | Polymarket 17:08 UTC | Kalshi 17:08 UTC |
|---|---|---|---|
| December 9: 25 bp hike | 90.5% | 91.5% | 91.5% |
| December 9: hike of 50 bp or more | 6.25% | 4.7% | 5.5% |
| December 9: no change | n/a | 2.9% | 3.5% |
| January 2027: 25 bp hike | 57.5% | 57.5% | 58.5% |
| January 2027: no change | 40.5% | 40.5% | 39.5% |
A Treasury secretary arguing against a hike did not make a pause look more likely to traders: "no change" in December is priced at about 3% on both venues, little changed from the 2.6% and 3.5% in the morning reading in our PPI report. The small movement there was came in the size of the move. A half-point or larger December hike slipped from 6.25% to 4.7% on Polymarket, and that probability went into the quarter-point contract, not into a hold. January did not move on Polymarket and still leans towards a second hike.
The 10-year Treasury yield was around 5.14% on Friday, according to Investing.com.
Why it matters
The disagreement is about diagnosis, and the diagnosis decides the treatment. If inflation is mostly an oil shock, the usual view is that it fades without help and higher rates mainly cost growth. If it has spread into services and is being fed by strong demand, the usual view is that the central bank has to lean against it. Each side can point to something in October's PPI: energy prices fell, which fits Bessent's account of a shock that is easing, while the measures that strip out food and energy stayed firm, which fits Goolsbee's.
The Fed sets policy independently, and Bessent took care to say so. On Friday's evidence traders are weighting what Fed officials say about their own decision more heavily; other comments from officials this week are covered in our report on New York Fed President John Williams and our report on Hammack and the 10-year yield. BetG8 takes no position on which side is right.
What to watch next
The decision is due on December 9 at 2 p.m. ET, at the end of a two-day meeting. Goolsbee has said the next inflation reports will set the pace, and the contract most sensitive to them is January, where a hike and a hold are separated by fewer than 20 points. Our Federal Reserve topic page collects the related markets. Crude is the other input, since Bessent's case rests on the energy shock continuing to ease.
Method and limits
Statements are as reported by Reuters via Investing.com and by Investing.com from the CNBC interviews; we did not have access to full transcripts, so remarks are paraphrased. Kalshi and Polymarket prices come from BetG8's live page and will keep moving. Nothing here is a forecast by BetG8 or investment advice.
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Frequently asked questions
What did Bessent say about a Fed rate hike?
In a CNBC interview on November 13, 2026, Treasury Secretary Scott Bessent said the Fed should not raise rates over inflation caused by an energy supply shock that is already easing. He added that he is not on the Fed, would not tell it what to do and wants officials to keep an open mind.
What did Goolsbee say about inflation?
Chicago Fed President Austan Goolsbee said on CNBC that inflation has spread into services and health care, that the economy is not currently on a path back to 2% and that the Fed definitely has work to do. He did not commit to a larger hike in December.
What are the odds of a Fed rate hike in December 2026?
At 17:08 UTC on November 13, a quarter-point hike at the December 9 decision was priced at 91.5% on both Kalshi and Polymarket, with a hike of 50 basis points or more at 4.7% and 5.5%. These are market prices, not predictions.
Sources
- Reuters via Investing.com, US Treasury chief says Fed should not hike rates over energy shock
- Investing.com, Goolsbee says Fed not on track to hit 2% inflation target
- Kalshi and Polymarket, Fed decision markets, read 17:08 UTC via BetG8's live page
Market prices, not predictions or advice. 18+. This page reports market prices and published facts; it is not betting, financial or legal advice. If gambling stops being fun, help is available at 1-800-GAMBLER.