Federal Reserve Bank of Chicago President Optimistic About Inflation Easing
BY PYMNTS | JULY 14, 2023
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The Federal Reserve Bank of Chicago President Austan Goolsbee expressed his optimism regarding the recent consumer-price data, which showed inflation easing.
“It’s at least promising that this week we got inflation numbers that show inflation is coming down at a pretty rapid clip,” Goolsbee told Fox News, Bloomberg reported Friday (July 14). “It’s still higher than where we want it but it’s making progress.”
According to the report, Goolsbee felt strongly about securing a “golden path” to keep a lid on inflation without inducing a recession. With the recent inflation coming down “at a pretty rapid clip,” the chances of Fed officials meeting their 2% goal before a recession become more promising.
Late Thursday, Fed Reserve Governor Christopher Waller shared a similar sentiment by expressing his confidence in achieving the 2% inflation target with only two more rate increases, the report said. Furthermore, Waller is convinced this can occur before the year ends.
The Federal Reserve paused its tightening campaign in June, after 15 months, but indicated that there would likely be two more rate increases this year, according to the report. At their next meeting, Fed officials are expected to raise rates by 25 basis points.
The Consumer Price Index released Wednesday (July 12) by the Bureau of Labor Statistics showed that prices were up 3% overall in June, measured annually, a notable deceleration from the 4% seen in May and the peak of 9% seen roughly a year ago.
That led to speculation about whether and when the Federal Reserve might keep raising rates. The 3% pace is still above the 2% stated inflation target set forth by the Fed.
PYMNTS research has found that 40% of small and medium-sized businesses (SMBs) remain more worried about inflation than they were a year ago.
Among these businesses, 15% reported being concerned about declining revenues and 48% said they would look to tap financing options to keep their operations running, according to “Main Street Health Q2 2022: Credit’s Key Role in SMBs’ Plans.”
On June 28, Federal Reserve Chair Jerome Powell said core inflation may not reach the 2% mark until 2025.
“Of course, if that day comes when that turns around, that’ll be great. But we don’t expect that,” Powell said during a forum moderated by CNBC.
