Fed's Goolsbee (2027 Voter) says it is an intense moment with a lot in the balance, at best inflation has stalled and the Fed is waiting for that to go away, via CNBC interview
Importance
Level 1
- Remains optimistic that by end of the year rates could go down, but needs proof on inflation.
- Gas prices have a high impact on household expectations; Fed has to hope it does not have a lasting impact.
- Many unemployment metrics have shown stability of late.
- Job creation may not be a reliable measure of slack.
- Labour market data suggests economy nears full employment, raising inflation concerns.
- Inflation now appears to be the primary risk.
- Unemployment rate has not gone up much.
- Inflation expectations remain anchored.
- Fed could be back in an environment of multiple cuts, but also see conditions where the Fed would hike.
- Historically oil shocks have been stagflation, making both inflation and joblessness worse.
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