Housing inflation has proved more stubborn than other components of the Consumer Price Index, and may determine when the Fed cuts interest rates, Chicago Fed President Austan Goolsbee said Thursday…
Chicago Fed President Austan Goolsbee, then a professor of economics at the University of Chicago Booth School of Business, interviews then Senior Advisor to Obama President at the Booth School of Business in Chicago on Thursday, April 9, 2015. Goolsbee hopes to reach the goal of reducing inflation to its 2% target without triggering recession.
Inflation peaked at an annual rate of 9.1% in June 2022 but has since cooled significantly. The Consumer Price Index was up 3.2% over the previous 12 months in February, which is still above the Fed’s annualized target of 2%, but potentially on track for predicted interest rate cuts this year.“It has to come down. I still think it will,” Goolsbee said during a multi-chamber economic outlook luncheon Thursday in west suburban Oak Brook.
The Consumer Price Index for March will be released next week, data that could well determine the likelihood for rate cuts this year. Fed monetary policy usually navigates a trade-off between inflation and unemployment. But as inflation has declined, the unemployment rate, which peaked at 14.8% in April 2020, has also dropped to pre-pandemic levels, hovering under 4% for more than two years.
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