More from Fed’s Goolsbee is on the wires saying:
- If Fed sees lack of progress on the price side, it will have to raise restraint.
- Trying not to put much weight on conventional measures of overheating
- Have not decided what to do at the next meeting
- Recent inflation was mostly supply though there was a demand component
- The Fed will have a legitimate debate about how the current framework worked in this period of inflation
- Inflation targets do risk giving a false sense of precision around a variable that is noisy
- It will matter a lot how long auto strike lasts in terms of its GDP impact
- Auto strikes have not had a historical large impact on inflation. However current capacity and inventory situation is different
- Fed is trying to get a handle on whether an extended strike might lead to different price outcomes
- Have not been a big fan of an explicit fed target
- Once Fed his back to 2% target or on a clear path to it, then it would be perfectly appropriate to discuss the target itself.
- If long continues to increase, Fed will have to take account of that as a form of tightening
Goolsbee is more of a dove. He is a voting member on the board this year.
This article was written by Greg Michalowski at www.forexlive.com. Source