Chicago Fed Pres. Goolsbee: We had new substantial progress over long-term on inflation

Chicago Fed Pres. Goolsbee is speaking and says:

  • We’ve had very substantial progress over a long-term basis on inflation
  • Even with January PCE data showing a month of rebound, should be careful to extrapolate
  • There is element of truth that disinflation of 2023 was supply chain repair
  • Should be careful with the argument that supply change is now fixed.
  • Should not expect more benefit in 2024
  • Impact on supply shock on inflation takes time.
  • Suggests benefits of supply chain disinflation are still to come.
  • Lags on supply shock from labor on inflation are probably long.
  • As of labor supply shocks probably have a longer lasting effect on inflation then supply chain shocks
  • If substantial productivity growth continues, that would have an impact on monetary policy.
  • What I’m watching the most is why hasn’t housing inflation improved more than it has
  • There is a risk of betting against the Fed being commitment to doing what it says
  • Rates are pretty restrictive.
  • I still think the question is how long do we want to remain in this restrictive

Goolsbee is a voting member and is mostly considered a dove.

This article was written by Greg Michalowski at www.forexlive.com. Source