Chicago Federal Reserve President Austan Goolsbee said Monday that he’s more worried about inflation now than he is unemployment, even with apparent progress made on the war with Iran.

In a CNBC interview, the central banker said policymaking is difficult in the current environment. He spoke shortly after President Donald Trump announced that progress had been made in negotiations with Iran and that further attacks on energy infrastructure would be halted for five days as talks continue.

“The most important thing is to figure out the through-line of what is happening,” Goolsbee said in a “Squawk Box” interview. “What makes this a fraught but intense moment is nobody can tell us what is going to happen on the ground in the conflict in the Middle East, and how long that lasts.”

Goolsbee had dissented on a rate cut in December and said he agreed with the majority to hold short-term rates steady at the January and March meetings of the Federal Open Market Committee. He is not an FOMC voter this year but will vote again next year.

Following Monday’s war news, traders, in volatile market action upped bets of a rate hike by the end of the year but still expect a cut in 2027. Stocks spiked higher and oil prices plunged.

FOMC officials last week indicated a majority still expect a cut this year and another next. However, Goolsbee said that his inclination will depend on the progress of inflation, and he cautioned against “a repeat of the team-transitory mistake” where the Fed underestimated the severity of inflation in 2021.

“I remain fairly optimistic that by the end of ’26 rates could go down, but I wanted to see proof that we’re back on an inflation headed to 2%. This [war] definitely throws a wrench into the plans. We do need to see progress,” he said.