Chicago Fed President Austan Goolsbee stated on Friday that the Federal Reserve is attempting to determine whether the strong inflation observed in the first quarter was an indication that the economy was overheating.
Goolsbee stated in a Bloomberg Television interview that it is challenging to fully understand this important subject due to “crosscurrents.”
Even though inflation was improving at the end of last year, Goolsbee said that inflation “clearly hit a bump at the start of this year.”
“We just need to step back from the situation and consider whether that indicates an overheating economy or something else entirely.” stated Goolsbee.
He hinted that the Fed might take its time coming to a decision.
“There is an economic schedule and a schedule for day traders. You need to adopt a longer-term perspective when determining monetary policy, he said.
According to Goolsbee, the Fed would feel more certain that the economy might not be overheating if there were more evidence, such as the April jobs report. The economy appears to be “moving back to pre-COVID and conventional times,” according to the jobs figures, he claimed.
Goolsbee called the overall 175,000 employment growth in April “very solid.”
Jobs report: Despite expectations, the US economy added 175,000 new jobs in April.
When asked if Fed officials had brought up the prospect of a rate hike during their meeting earlier this week, the president of the Chicago Fed sidestepped the topic.
When asked if a walk was possible, Goolsbee responded, “As a central banker, nothing is ever off the table.”