The president of the Chicago Fed. Goolsbee: US is in a ‘cross currents’ environment

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.

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