400tmax/iStock Unreleased via Getty Images
- The last three months of inflation data show that it’s going to take longer than originally expected for inflation to get to the Federal Reserve’s 2% goal, Austan Goolsbee, the president of the Federal Reserve Bank of Chicago, said on Friday.
- “Now I think we have to recalibrate. And we have to wait and see,” he added.
- 11:17 AM ET: Event concludes.
- 11:13 AM ET: Rising delinquencies is an area of concern, but it’s rising from an abnormally low level, Goolsbee said. The consumer balance sheet got “unprecedently strong” during COVID. Overall consumer debt levels are not especially high. Consumer delinquencies are one of the more concerning parts of the economy he added.
- 11:03 AM ET: In the short run, more immigration makes the Fed’s dual mandate goals a little easier to accomplish, Goolsbee said.
- 10:52 AM ET: It’s not productive to hypothetically think about what it would take to raise rates or cut rates, he said. Right now, policy is restrictive.
- 10:50 AM ET: “The puzzle right now in housing is: why is the official data looking so different than the market data?,” Goolsbee said. Market rent inflation has come down, but it’s not yet showing up in the official inflation gauges.
- 10:44 AM ET: One particularly stubborn factor in inflation is housing. “Housing — that’s the part that hasn’t behaved the way we thought it would,” he said.
- He still thinks easing in rents will flow through to the official inflation measures. If it doesn’t, it will be much harder to get inflation to 2%. Yet he insists the Fed will achieve that goal.
- Updated at 10:39 AM ET: Progress in getting inflation to the Fed’s goal has stalled from the good progress made in the previous six months, he noted.
- Supply chain healing, labor participation force improvement, and productivity gains “opened the door” last year to achieving the “golden path” of getting inflation to 2% without tipping the economy into recession, Goolsbee said. This year, that’s become more difficult.