Fed's Goolsbee: Mix Of Supply And Demand Pressures On Inflation Has More Impact On Pace Than Destination
If Inflation Is Mostly Demand Driven Rate Response Will Have To Be More Aggressive And More Front-Loaded Inflation Data Earlier This Year Seemed To Show Supply Shocks Waning; Now Some Of It Is Coming From Demand The Fed Is Now More In The "Action Scenario" Given Mix Of Inflation Pressures District Contacts Are Relaying Concerns That Sound Like Traditional Demand Overheating Not Thinking About Any Coming Hikes As Reversing Last Year s Cuts The Only Choice The Fed Has If Supply Shock Inflation Proves Persistent Is To Reduce Aggregate Demand Month-To-Month Job Growth Is Not A Good Measure Of Health Of Labor Market When There Is Doubt About Population Growth Due To Immigration Policies Current Unemployment Rate Is "Pretty Close" To Full Employment Business Contacts Say Labor Market Is Getting Tighter, Alternate Measures Tell The Same Story Fed Remains Very Credible, Everyone Takes The Job Extremely Seriously Components Of Inflation Will Matter To Fed's Analysis, With Services Inflation Not Seen As Tied To Oil Price Shock But A Product Of Strong Demand Should Be Open To Making The Sep More Informative Job Of A Central Banker Is Not To Respond To Markets Or The President, But To Economic
If Inflation Is Mostly Demand Driven Rate Response Will Have To Be More Aggressive And More Front-Loaded Inflation Data Earlier This Year Seemed To Show Supply Shocks Waning; Now Some Of It Is Coming From Demand The Fed Is Now More In The "Action Scenario" Given Mix Of Inflation Pressures District Contacts Are Relaying Concerns That Sound Like Traditional Demand Overheating Not Thinking About Any Coming Hikes As Reversing Last Year s Cuts The Only Choice The Fed Has If Supply Shock Inflation Proves Persistent Is To Reduce Aggregate Demand Month-To-Month Job Growth Is Not A Good Measure Of Health Of Labor Market When There Is Doubt About Population Growth Due To Immigration Policies Current Unemployment Rate Is "Pretty Close" To Full Employment Business Contacts Say Labor Market Is Getting Tighter, Alternate Measures Tell The Same Story Fed Remains Very Credible, Everyone Takes The Job Extremely Seriously Components Of Inflation Will Matter To Fed's Analysis, With Services Inflation Not Seen As Tied To Oil Price Shock But A Product Of Strong Demand Should Be Open To Making The Sep More Informative Job Of A Central Banker Is Not To Respond To Markets Or The President, But To Economic Conditions Without Fed's Summary Of Economic Projections The World Will Still Be Looking To Understand Officials' Reaction Functions Historically US Long Rates Are Not Particularly High; Don't Think It Reflects Loss Of Confidence In US