Important statements for the US economy came from FED Senior Member Austan Goolsbee amid a busy agenda!

FED Board Member Austan Goolsbee made important assessments regarding the economic outlook and the impacts of trade policies on inflation.

Goolsbee stated that attention should be paid to the moderate trend of economic data during the transition process.

While evaluating the effects of the recently resurfaced customs duties, Goolsbee stated that these policies have "an effect similar to stagflationary impacts from oil shocks." However, he also added that this effect is weaker compared to the past. He expressed that lower customs duty rates and exemptions limit the impact of customs duties on the economy.

Goolsbee stated that it is still unclear how customs duties will influence inflation. Goolsbee, who said, "If we do not see an increase in inflation due to customs duties, it means the economy is still on a golden path," expressed that there has not been a significant increase in inflation in the last three months.

A Fed official argued that interest rate cuts should continue in the event that the impact of trade policy completely disappears. However, Goolsbee expressed concerns about the possibility of stagflation, stating that it is unclear what kind of policy should be pursued in this environment.

Goolsbee noted that he does not believe a 1970s-style stagflation will hit the U.S., but that the Fed faces certain risks in its dual mandate that encompasses employment and price stability.

*This is not investment advice.

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