-
Policy
Policy
Exclusive interviews with leading policymakers that convey the true policy message that impacts markets.
LATEST FROM POLICY: -
EM Policy
EM Policy
Exclusive interviews with leading policymakers that convey the true policy message that impacts markets.
LATEST FROM EM POLICY: -
G10 Markets
G10 Markets
Real-time insight on key fixed income and fx markets.
Launch MNI PodcastsFixed IncomeFI Markets AnalysisCentral Bank PreviewsFI PiFixed Income Technical AnalysisUS$ Credit Supply PipelineGilt Week AheadGlobal IssuanceEurozoneUKUSDeep DiveGlobal Issuance CalendarsEZ/UK Bond Auction CalendarEZ/UK T-bill Auction CalendarUS Treasury Auction CalendarPolitical RiskMNI Political Risk AnalysisMNI Political Risk - US Daily BriefMNI Political Risk - The week AheadElection Previews -
Emerging Markets
Emerging Markets
Real-time insight of emerging markets in CEMEA, Asia and LatAm region
-
Commodities
Commodities
Real-time insight of oil & gas markets
-
Credit
Credit
Real time insight of credit markets
-
Data
-
Global Macro
Global Macro
Actionable insight on monetary policy, balance sheet and inflation with focus on global issuance. Analysis on key political risk impacting the global markets.
Global MacroDM Central Bank PreviewsDM Central Bank ReviewsEM Central Bank PreviewsEM Central Bank ReviewsBalance Sheet AnalysisData AnalysisEurozone DataUK DataUS DataAPAC DataInflation InsightEmployment InsightGlobal IssuanceEurozoneUKUSDeep DiveGlobal Issuance Calendars EZ/UK Bond Auction Calendar EZ/UK T-bill Auction Calendar US Treasury Auction Calendar Chart Packs -
About Us
To read the full story
Sign up now for free trial access to this content.
Please enter your details below.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Real-time Actionable Insight
Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.
Free AccessMNI: Goolsbee Sees Risk Fed Overshoots As Supply Recovers
The Federal Reserve can generate a rare soft landing but the risk is that policymakers overshoot by relying on misguided models suggesting a clampdown down on demand when the real economic driver is a rebound in supply, Chicago President Austan Goolsbee said Thursday.
Employment and GDP have been much stronger recently than economic models had suggested following the Fed’s recent tightening cycle, while core PCE inflation has been much slower, so much so that “the real data have not followed the historical patterns at all,” according to the text of remarks to the Peterson Institute for International Economics in Washington.
"In today’s environment, believing too strongly in the inevitability of a large trade-off between inflation and unemployment comes with the serious risk of a near-term policy error," Goolsbee said. His remarks didn't give a specific view on where the fed funds rate should move in the near term. (See MNI INTERVIEW: Fed Likely Overtightened-Ex-Boston Fed's Fuhrer)
The Fed has hiked from near zero to a policy rate ranging from 5.25% to 5.5%, the most aggressive cycle in decades, as the U.S. economy powered ahead following the end of most Covid restrictions. Officials earlier this month predicted one more quarter-point hike by year's end and scaled back projected rate cuts next year citing the need to make sure inflation sustainably moves back to 2%.
Supply chains appear set to continue loosening up, Goolsbee said, helping further ease inflation even as the focus often remains on the risk that job and output growth will keep inflation above target.
"Holding to the simple historical correlations of what growth and labor market conditions mean for inflation in the face of positive supply developments is a recipe for overshooting and causing an unnecessary downturn," Goolsbee said, again referring to a soft landing as a "golden path."
The Fed is determined to bring inflation and calls for raising the target are "a recipe for ratcheting up inflation expectations just like we saw in the old days," he said.
To read the full story
Sign up now for free trial access to this content.
Please enter your details below.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.