Young Research & Publishing Inc.

Investment Research Since 1978

Disclosure

  • About Us
    • Contributors
    • Archives
    • Dick Young’s Safe America
    • The Final Richard C. Young’s Intelligence Report
    • You’ve Read The Last Issue of Intelligence Report, Now What?
    • Dick Young’s Research Key: Anecdotal Evidence Gathering
    • Crisis at Vanguard
  • Investment Analysis
    • Bonds
    • Currencies and Gold
    • Dividend Investing
    • ETFs & Funds
    • Investment Strategy
    • Retirement Investing
    • Stocks
    • The Efficient Frontier
  • Investment Counsel
  • Retirement Compounders®
  • Free Email Signup

FAILING UPWARD: Incoming Chicago Fed President Was Wrong about Inflation

December 7, 2022 By Jeremy Jones, CFA

Cupcakes are served to Treasury Secretary Timothy Geithner and economic advisor Austan Goolsbee during a surprise Oval Office celebration in honor of their shared birthday, Aug. 18, 2009. (Official White House Photo by Pete Souza)

Austan Goolsbee, a former Obama administration economist who currently teaches at the University of Chicago, has been tapped to replace Charles Evans as the President of the Chicago Federal Reserve. As Nick Timiraos reports in The Wall Street Journal, Goolsbee was among many economists who blamed supply chain issues for the rampant inflation of the last two years while discounting the role played by excessive fiscal stimulus. Timiraos writes:

In the summer of 2021, Mr. Goolsbee was among the many economists who argued that increasing inflationary pressures were being driven primarily by supply-chain bottlenecks and were likely to abate largely on their own.

The Fed largely maintained that view until one year ago, when officials began withdrawing stimulus after seeing that inflation was worsening. The central bank has raised rates this year at the fastest pace since the early 1980s in an effort to slow inflation by curbing demand.

This year, Mr. Goolsbee has pointed to high inflation in Europe and other parts of the world as evidence that U.S. fiscal stimulus hasn’t been the main phenomenon explaining higher prices. But he has said that with the benefit of hindsight, the Biden administration’s financial relief programs were probably too large.

In an interview on the Fox Business Network last week, Mr. Goolsbee said it was too soon to say whether inflation had peaked. “I hope that we’ve peaked but I think that the rate at which it comes down might not be as rapid as everyone wants,” he said.

Mr. Goolsbee also said it was premature to say how high the Fed might have to raise interest rates. “Anybody saying what the terminal rate is, where the Fed is going to stop, that hinges completely on what happens to inflation,” he said. “If we started to get month after month of inflation numbers that were worse than expected, there is no terminal rate. They will keep raising rates until they stop inflation.”

Mr. Goolsbee said a recession is “not inevitable,” but warned of the risks of aggressively raising rates to wring inflation out of the economy when the economy faces constraints on the ability to supply goods and services.

Read more here.

Share this:

  • Email
  • Twitter
  • Facebook

You Might Also Like:

  • This Isn’t the First Time the Fed Got Inflation Wrong
  • Is the Fed Losing the Inflation Battle?
  • The Fed Is Dismissing the Evidence With Inflation Push
  • Author
  • Recent Posts
Jeremy Jones, CFA
Jeremy Jones, CFA, CFP® is the Director of Research at Young Research & Publishing Inc., and the Chief Investment Officer at Richard C. Young & Co., Ltd. CNBC has ranked Richard C. Young & Co., Ltd. as one of the Top 100 Financial Advisors in the nation (2019-2022) Disclosure. Jeremy is also a contributing editor of youngresearch.com.
Latest posts by Jeremy Jones, CFA (see all)
  • The Cloud Slowdown Is Hurting Amazon the Most - February 8, 2023
  • Real Estate “Power Buyers” Suffering Glut of Inventory - February 7, 2023
  • AI SEARCH WAR BEGINS: Google and Microsoft Join AI Battle - February 6, 2023

Search Young Research

Most Popular

  • You Aren't Getting These Yields from Your Bank Account
  • What Your Survival Guy Invested in Today
  • Tom Brady Retires, Again. Should You?
  • Do You Trust This Rally?
  • Suddenly, Holding Cash Looks Good Again to Many
  • Vanguard Wellesley (VWINX) vs. Wellington (VWELX): Which Fund is Best?
  • Early Advice from Her Dad on Tipping at Charlie Trotter’s
  • The Power of a Compound Interest Table
  • Real Estate "Power Buyers" Suffering Glut of Inventory
  • What Happens if the "Fed Put" Is Over for Good?

Don’t Miss

Default Risk Among the Many Concerns with Annuities

Risk and Reward: An Efficient Frontier

How to be a Billionaire: Proven Strategies from the Titans of Wealth

Could this Be the Vanguard GNMA Winning Edge?

Cryptocosm and Life After Google

Warning: Avoid Mutual Fund Year End Distributions

Is Gold a Good Long-term Investment?

How to Invest in Gold

Vanguard Wellington (VWELX): The Original Balanced Fund

What is the Best Gold ETF for Investing and Trading?

Procter & Gamble (PG) Stock: The Only True Dividend King

The Dividend King of the North

You’ll Love This if You’re Dreaming of an Active Retirement Life

RSS The Latest at Richardcyoung.com

  • Big Hearted, Idealistic, Daring…
  • Yes, Your Children Are Listening to You
  • BEN CARSON: How Is Biden’s Speech Creating Unity?
  • Biden’s State of the Union Address Receives Rough Reception
  • Can a Capital Injection Save Bed Bath & Beyond?
  • You Aren’t Getting These Yields from Your Bank Account
  • Democrats’ Widening Schism
  • Jimmy Buffett Playing Key West
  • Whatever You Knew, Dave Hammer Knew More
  • Dragon Tours Open for Business

RSS The Latest at Yoursurvivalguy.com

  • Yes, Your Children Are Listening to You
  • You Aren’t Getting These Yields from Your Bank Account
  • Bidenflation Has Eaten Up Americans’ Pandemic Savings
  • Dragon Tours Open for Business
  • What Your Survival Guy Invested in Today
  • You Invest, They Win: FTX Edition
  • Your Retirement Life: Adventure Awaits
  • Zumwalt-Class Guided Missile Destroyers to Get Hypersonic Weapons
  • Early Advice from Her Dad on Tipping at Charlie Trotter’s
  • Treasury Bonds Ready to Rock and Roll

About Us

  • About Young Research
  • Archives
  • Contributors

Our Partners

  • Richard C. Young & Co.
  • Richardcyoung.com

Copyright © 2023 | Terms & Conditions

 

Loading Comments...
 

    loading Cancel
    Post was not sent - check your email addresses!
    Email check failed, please try again
    Sorry, your blog cannot share posts by email.