Chicago’s Federal Reserve Chairman is concerned with the definitions that lead to continuous inflation

Tuesday, Federal Reserve The head of the Austan Golsby Bank, the head of the Austan Golsby Bank, warned of the high inflation and said it is not clear whether the high prices caused by customs tariffs will be one time or could pose a more stable challenge for politics if the recession begins.

Goolsbee spoke with Edward Lawrence to Fox Business at the Middle West Agriculture Conference on Tuesday, and said that the recent high inflation is related to the rate of price growth from a height of 40 years in 2022 amid increased inflation after the ruling.

“I will be tense because we spent four and a half years with inflation higher than a 2 % goal and was a decrease, and I fell, at least I believed and made the argument on the road to 2 %,” said Golsby. “Now, it is going wrong … the inflation has increased for several months.”

Goodsbee explained that while he hopes The rise in inflation It is a temporary or transient phenomenon, and he warned that if “inflation proves more stable now, just as it happened in 21 and 22, it will be a truly difficult scenario or for any central bank because it will be what I call a available direction” that would test the ability of the FBI to both the goals of the double factories.

The Trump administration, the Federal Reserve, and the Central Bank of Oman, the conflicting economic expectations for the next four years

“Under the law, we have a double mandate to increase employment to the maximum and price stability. It usually gets worse and the other side improves.” “If you are high, unemployment is very low and inflation is the problem. If you are in stagnation, this is the opposite. If both start in a mistake at the same time, it is not clear now what you do.”

the laboratory It has also been cooled in recent months, making this dilemma a living issue facing the central bank because it weighs its next movement after the first interest rate of 2025 was reduced in September.

Federal Reserve Chair Jerome Powell He said that the Federal Reserve Bank framework directs policy makers to focus on any double goal that is beyond the goal in such a scenario.

The Federal Reserve’s favorite inflation scale shows that consumer prices have been high in August

This strategy still represents challenges to the economy and feeding politics, as Powell recently warned that “there is no risk -free path” for the economy in view of the risks of high inflation and the weakest labor market.

Reducing interest rates may support the labor market while inflation is already high over the goal of the Federal Reserve by 2 %, which can stimulate Economic activity To the extent that inflation crawls, while raising interest rates to scientific inflation can slow down the labor market.

Goodsbee use what he calls “11 % lane” as a frame to assess if it is High prices caused by customs tariffs It is limited to imported goods, or has broader economic impacts of the economy, after indicating earlier this year that goods imports are equal to 11 % of GDP in the United States in 2024.

The Federal Reserve reduces interest rates for the first time this year amid twice the labor market

Goolsbee is concerned with definitions that may affect intermediate goods, which are ingredients used to make final products – or in this case, imported goods used in the final products that they made American manufacturers.

“I want to be, this is what I hope, and I hope that the effect of this increase will be modest in size, and that it remains in the 11 % GDP. The things that begin to make me tense when the customs tariff begins to advance to medium goods … now it comes out of its hot, and it provokes the costs of production.”

the Federal Reserve Chicago Chief added that inflation in services has risen up, which may be a warning sign that the customs tariff inflation will not represent a single time as it hopes.

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“If we want to see a continuation of what we have seen now a little, which is the high inflation in services – it is very difficult to explain the reason for the high services of customs tariffs, and this would make me tense that the matter is not, and it is not done.