MNI BRIEF: Fed Debating If It's Done Enough Already -Goolsbee

The Federal Reserve's central conundrum is deciding whether it's "done enough already" to bring inflation back to target after raising rates 500 bps in just over a year, Chicago Fed President Austan Goolsbee said Friday.

"Have we done enough already? Do we still have substantially more to do or modest amount more to do? And can we get inflation down without recession?" he said in a Fox Business interview. "You know that there's a lag impact when you make these interest rate decisions." Because the pandemic has been a unique experience, "the normal rules don't have to apply" for getting inflation down without causing a recession, he added. "I am hopeful that we can pull it off."

Inflation remains too high and the labor market very strong, he said. The PCE inflation data out Friday show goods inflation has been more persistent than expected, and it's not clear if that's due to one-off reasons or something else. "That's the thing that everybody should put their eye on in the immediate term are goods prices," he said.