Masters in Business At the Money: Chicago Fed President Austan Goolsbee on Tariffs, Supply Chains and Inflation
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Mar 5, 2025 
Austan Goolsbee, President of the Chicago Federal Reserve and former chairman of the Council of Economic Advisors, dives into the complexities of tariffs and their inflationary effects. He discusses the challenges of navigating supply chains, particularly in the auto industry, and examines the housing market's struggles with regulation and underbuilding. Goolsbee also reflects on the critical 2% inflation target, emphasizing a data-driven approach to monetary policy and urging investors to grasp the intricate nature of current economic conditions.
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The Golden Path of Disinflation
- The "golden path" involved a significant drop in inflation without a recession, while unemployment stayed below 4%.
- Supply chain healing and increased labor force participation contributed to this disinflation.
Auto Industry Supply Chain Disruptions
- Goolsbee uses the auto industry's complex supply chain as an example of how disruptions can have lasting effects.
- COVID-19 showed these effects can last longer than anticipated, impacting various sectors.
Why Recession Predictions Failed
- Most recession predictions were wrong because they relied on demand-driven models.
- The COVID-19 recession was unique, driven by service disruptions, not typical cyclical industries.