RSS Fed's Goolsby: Nice to get inflation number that better than expected

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 RSS Fed's Goolsby: Nice to get inflation number that better than expected

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  • Nice to get inflation number that is better than expected
  • There is more uncertainty noise
  • still on path to get to percent inflation.
  • Today stations recent ferment was a bump.
  • Next 12 to 18 months, rates can go down a paramount.
  • Employment is stable, want to keep it stable, to do so rates need to come down to something like neutral.
  • Agree policy rate is still far from neutral rate
  • The Fed is significantly less restrictive than we were
  • The neutral rate is around 3%.
  • Our goal is to get inflation down to 2% and incomes would rise faster than the prices
  • Anything that will impact jobs and prices we try to process
  • When the new administration is in, we will process what policy does for inflation and employment
  • Uncertainty on policy as part of why I feel rate path next year is a bit more shallow.
  • Rates will come down by a judicious amount next year
  • Rate path will be determined by employment and prices
  • We might be more dependent on data and the conditions and the economic outlook
  • If look at the dot plot, what is the long run neutral rate is below the level today.
  • The last 6-months of PCE inflation is very close to 2%
  • Recent inflation has been higher than expected, for sure bumps can happen and policy uncertainty, but its clear inflation is heading toward 2%.
This article was written by Greg Michalowski at www.forexlive.com.
 
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