Odd Lots
Austan Goolsbee on the 'Golden Path' to a Soft Landing
Oct 4, 2023
Austan Goolsbee, President of the Federal Reserve Bank of Chicago, weighs in on the quest for a 'golden path' to a soft landing in the economy. He discusses the delicate balance of ongoing inflation concerns amid low unemployment rates. Goolsbee analyzes the current turbulence in the bond market and shares insights on how recent labor supply shifts, particularly with rising immigration, may signal a stabilization. His optimistic outlook contrasts historical economic challenges, offering a fascinating perspective on the Fed's pivotal role in navigating these uncertain waters.
58:08
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Quick takeaways
- Austan Goolsbee believes in the possibility of achieving a 'golden path' or a soft landing for the economy, and emphasizes the Fed's commitment to getting inflation down to its target rate and maintaining maximum employment.
- Goolsbee highlights the importance of anchored inflation expectations, as they play a crucial role in bringing down inflation and avoiding the challenges faced by the Fed in the 1970s when expectations became unhinged. Current market expectations are seen as well-anchored for achieving the desired inflation outcome.
Deep dives
The Fed's Commitment to Achieving the Golden Path
Austin Goolsbee, President of the Chicago Fed, discusses the possibility of achieving a soft landing or the 'golden path' for the economy. He emphasizes the Fed's commitment to getting inflation down to its target rate and maintaining maximum employment. Goolsbee believes that the Fed will do whatever it takes to achieve this goal and points out that the market expects the Fed to stick to its target and believes it can pull it off. He also addresses concerns about rising interest rates and the potential impact on financial markets, stressing that the Fed will monitor the conditions and adjust its policies accordingly.
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