Fed’s Goolsbee: Persistent inflation is like “playing with fire”
Chicago Federal Reserve (Fed) President Austan Goolsbee, a voter in the Federal Open Market Committee (FOMC) in 2027, said Tuesday that “the fact that we have been 5 ½ years above inflation target is playing with fire,” adding that “massive deficits” can overheat the economy.
He said inflation in 2023 and 2024 was headed toward the Fed’s 2% goal but stalled out, confirming that “we have to get evidence that inflation is coming back down.”
Key highlights:
Expectation of productivity gains from AI in the future creates a high danger of overheating now
Nothing in the federal reserve act says make sure bond market is happy, stock markets aren't surprised
Need to revisit the logic of looking through supply shocks
The fact we have been 5-1/2 years above inflation target is playing with fire
Price of oil could go down relatively quickly, but deeper problem is getting refineries back online
Keep your eye on productivity
Massive deficits are a form of stimulus, can overheat economy
In '23 and '24 felt inflation was headed back to 2%, then stalled out
In dot plot I'm one of more optimstic folks at fed
We have to get evidence inflation is coming back down
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.35% | 0.26% | -0.03% | 0.11% | 0.58% | 0.55% | 0.27% | |
| EUR | -0.35% | -0.09% | -0.36% | -0.26% | 0.23% | 0.20% | -0.09% | |
| GBP | -0.26% | 0.09% | -0.29% | -0.15% | 0.30% | 0.27% | -0.00% | |
| JPY | 0.03% | 0.36% | 0.29% | 0.15% | 0.60% | 0.59% | 0.30% | |
| CAD | -0.11% | 0.26% | 0.15% | -0.15% | 0.45% | 0.44% | 0.16% | |
| AUD | -0.58% | -0.23% | -0.30% | -0.60% | -0.45% | -0.02% | -0.30% | |
| NZD | -0.55% | -0.20% | -0.27% | -0.59% | -0.44% | 0.02% | -0.29% | |
| CHF | -0.27% | 0.09% | 0.00% | -0.30% | -0.16% | 0.30% | 0.29% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Author
Christian Borjon Valencia
FXStreet
Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.
