Fed's Goolsbee: 2023 a “hall-of-fame” year for reducing inflation

President of the Federal Reserve (Fed) Bank of Chicago Austan Goolsbee threaded the needle on Thursday, joining other Fed Presidents in making public observations about inflation following the US Consumer Price Index (CPI) inflation print earlier in the day.

Key Highlights

• Goolsbee: 2023 was a hall-of-fame year for inflation reduction.
• Persistent shelter inflation in CPI components may have less implication for Fed's Personal Consumption Expenditures (PCE) targets.
• Persistent housing price inflation and potential supply shocks remain the key risks.
• Inflation itself will be the primary determinant of when and how much the Fed will cut rates.
• Goolsbee's personal Fed funds rate view is not the lowest dot on the plot, closer to the median.
• Fed is still on a comfortable path forward on inflation, will have to evaluate policy restrictiveness as inflation continues to decline.