Minneapolis Fed Pres. Kashkari invited Chicago Fed Pres. Goolsbee for a chat moderated by CNBC Liesman. It seems to be underway with comments starting to trickle in.
Chicago Fed Pres. Goolsbee:
- Fed 2% inflation target next as in anchor on expectations
- Short run inflation expectations aren’t what matters
- Not surprised that one year expectations was higher
- At this time not much evidence that inflation is stalling out at 3%.
- We hit an inflation bulb this year and now we wait.
- We need to sniff the data down.
- We are relatively restrictive on policy.
- Real fed funds rate is as high as it is been in decades.
- I’m hesitant to focus too much on the recent inflation data.
- I think we are restrictive on policy
- Positive supply developments can make it hard to gauge if economy is overheating
As Chicago Fed Pres. Goolsbee/Kashkari speak, a snapshot of markets shows: Dow up 0.19%, S&P index unchanged and NASDAQ index -0.20%. The 2-year yield is 4.863% and the 10 year yield is at 4.502% (1:22 PM ET)
- Increased immigration adds 80K monthly to jobs.
- Given the uptick in inflation we have to wait and see on policy.
- If the inflation uptick means overheating, the Fed has to do whatever it has to do to get to the 2% target.
- Housing inflation remains a significant puzzle and challenge
- If housing inflation comes down there will be an optimistic lane towards 2% inflation
- Does not accept that we were stuck at the last mile of inflation.
- Supply chain is mostly healed, but benefits of increase in the labor supply may last during 2024
- High rates are creating stickiness in housing and withdrawn some supply, but that is not behind housing inflation puzzle.
This article was written by Greg Michalowski at www.forexlive.com. Source