Austan Goolsbee of the Chicago Fed commented today on the US economy and monetary policy. Here are the main points of his speech.
- The Fed will reach 2%, we should not consider changing the target. The recent increase in productivity appears to be concentrated in high-tech sectors, which may have a longer lifespan.
- Rates will be significantly lower in a year. Given the behavior of the rest of the economy, interest rates are the only exception and are expected to fall over the coming year.
- The Fed will hold a series of meetings in which the decision to cut or not cut interest rates will be tight.
- I will not commit in advance to the decision of the December meeting; several data are still awaited, particularly regarding inflation and consumer spending.
- Overall progress on inflation remains encouraging. Inflation has increased slightly. I still think the United States is on the path to 2%.
- The fate of immigration will have a very significant impact on the size of the future workforce.
- Measures such as the ratio of vacant positions to the number of unemployed people demonstrate the balance of the labor market.
- The job market appears largely stable.
- The employment figures for recent months give the impression of a situation of lasting full employment.
- On average, we have the impression that the job market has gone from a very high level to a level close to sustainable full employment. We want it to stabilize at this level.
- Consumer delinquencies are not high compared to historical levels.
- With a more speculative asset that doesn’t have an obvious use case in the real economy, it’s difficult to see what the real-world impacts will be.
- So far, the rise of cryptocurrency-based assets hasn’t had much of a macroeconomic impact, but it could have a wealth effect.
Source: xStation5
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