Federal Reserve's Goolsbee: Increasingly concerned about employment rather than inflation
Chicago Fed President Charles Evans said that given recent progress on price pressures and disappointing employment data, he is increasingly concerned about the labor market rather than inflation. Evans said on Wednesday that the current level of interest rates is "very restrictive," noting that such a stance is only appropriate in cases of an overheating economy. He declined to comment on the possibility and extent of a rate cut by the Fed at its September meeting. When asked about the balance between inflation and labor market risks, Evans said, "I feel increasingly concerned about the employment side of the mandate." He pointed out that the recent rise in the unemployment rate may reflect more people entering the labor market, but it could also "indicate that we are not at a stable level, but moving towards a potentially worse situation in the short term."
According to data from Citi on August 15th, Chicago Fed President Charles Evans said that given recent progress on price pressures and disappointing job data, he is increasingly concerned about the labor market rather than inflation. Evans said on Wednesday that the current level of interest rates is "very restrictive," and he said that this stance is only appropriate in the case of an overheated economy. He declined to comment on the possibility and extent of a rate cut by the Fed at the September meeting. When asked about the balance between inflation and labor market risks, Evans said, "I feel more and more concerned about the employment side." He pointed out that the recent rise in the unemployment rate may reflect more people entering the labor market, but it may also "indicate that we are not at a stable level, but moving towards a worse situation in the short term."