The president of the Federal Reserve Bank of Chicago says that the Fed may have to postpone the decisions of the interest in the midst of the volatile rate policy of President Donald Trump.
Chicago Fed leader Austan Goolsbee warns In a new interview with CNBC that Trump’s policy choices can also lead to an unfavorable economic environment that is known as stagflation, dominated by stagnating economic growth, high inflation and high unemployment.
“In the short term we just have to wait until the dust comes out of the sky … everything is always on the table, but I feel that the bar is a little higher for me for action in every direction while we wait to get some clarity.
And then, on the longer run, if they set up rates that have a stagflatery impact, that is, a delayed output by increasing the production costs, while also increasing prices, then that is the worst situation of the central bank. ”
Goolsbee says that the FED of Chicago in conversations is conversations with business owners in their districts who say they hope for policy consistency.
“The CEO of a construction company said, for them, they are now on a well-pencil-down moment where they just have to wait. If there will be a new big announcement every week or every day or every day, they simply cannot take action until some of those things have been resolved.”
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