Fed’s Goolsbee sees housing price pressures as inflation’s greatest threat

Outsized price rises in the housing services industry is the most significant hurdle to the Federal Reserve reducing inflation to its 2% target rate according to Chicago Federal Reserve Bank President Austan Goolsbee.

Key Quotes:

“If housing inflation does not come down, would be very difficult to return inflation to 2%.”

“I had been expecting it to come down more quickly than it has.”

“Housing inflation my most valuable indicator for immediate future.”

“Inflation in core services ex housing has come down more than expected.”

“Last two months of inflation data a bump; can’t write it off as purely noise.”

“Risks to inflation and employment mandates have moved into better balance.”

“If we stay restrictive for too long, we will likely see employment begin to deteriorate.”