The president of the Chicago Fed. Goolsbee speaking to FoxBusiness says:
- The United States is in a “cross-current” environment
- The Fed must bring inflation back to its target
- I don’t like putting constraints on what the Fed might do at a future meeting
- The “long arc” on inflation shows it coming down from high levels; if the PCE shows better readings, it will “make us feel better”
- If the PCE “reinflates”, the Fed will “stabilize prices”
- The “last mile” question of inflation is “a bit more difficult”; supply may not help as much
- The most important short-term figure for inflation is what’s happening with housing.
- If housing inflation does not return to where it was before the pandemic, it will be difficult to return to target.
- Instability in the Middle East poses a wild card for the Fed in terms of oil and gas prices; a negative supply shock is “not good”
- The Fed follows a dual mandate and fails to address political concerns
- Personally, I don’t feel any political pressure; The Fed continues its dual mandate on employment and prices
This article was written by Greg Michalowski at www.forexlive.com.
cnbctv18-forexlive
