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Fed's Goolsbee: Will take longer than 2025 to get to neutral policy rate

Federal Reserve (Fed) Bank of Chicago President Austan Goolsbee hit markets on an already-volatile Friday with more bad news, noting that inconsistent policy approaches from the US government cause a high level of economic uncertainty that make it difficult for the Fed to draw a bead on where the economy, and inflation specifically, are likely heading. 

Key highlights

This was a solid jobs report.

Tariffs add a little uncertainty.

The potential of escalating trade wars throwing a wrench into supply chains is very real.

I am hopeful, after what we saw recently, that tariffs end up not being a big impediment to trade.

I'm comfortable with path of the economy.

Consumer survey showing jump in near-term inflation expectations is less influential to me.

Wage growth is about consistent with 2% inflation.

Longer-run market-based inflation expectations show the market believes the Fed will get inflation to 2%.

One-time tariff is a transitory shock.

Retaliation would complicate impact of tariffs.

I see the neutral rate a fair bit lower than where we are today.

The Fed are on hold now, but over next 12-18 months, the settling policy rate will be a fair bit below where it is now.

The speed at which rates come down will be slower with more fogginess.

We need to get to settling rate on a judicious timetable.

What's happening in longer-run rates is not our target; that's more the purview of the Treasury.

I think it will take longer than end-2025 to get to neutral policy rate.

I think we are on path to 2% inflation.

I don't think the Fed would play a role in any sovereign wealth fund.

Russia Unemployment Rate remains unchanged at 2.3% in November

Russia Unemployment Rate remains unchanged at 2.3% in November
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UoM Consumer Sentiment Index drops as inflation fears climb

According to the University of Michigan's (UoM) Consumer Sentiment Index, American consumers are beginning to grow increasingly concerned about US President Donald Trump's approach to economic policy and international trade.
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