Fed;s Goolsbee in a interview with the New York Times commented :
- Inflation Report: Austan Goolsbee called the latest inflation data “sobering” but cautioned against overreacting to one report.
- Policy Impact: He emphasized that multiple months of high inflation would indicate the job is not done.
- Rate Outlook: Goolsbee expects interest rates to settle “a fair bit below” current levels but needs confidence inflation is on track to 2% before supporting further cuts.
- Long-Term Inflation Expectations: He finds some reassurance that households and businesses still expect inflation to decline over time.
- Trump’s Policies & Fed Challenges: He warned that policies like tariffs could complicate the Fed’s ability to interpret inflation drivers, making policy decisions more challenging.
- Supply vs. Demand Inflation: The Fed will need to distinguish between inflation caused by supply shocks (e.g., tariffs) and demand-driven overheating.
