Chicago Fed President Austan Goolsbee, in a Marketplace interview, emphasized the importance of a significant decline in housing inflation to achieve the Fed’s 2% overall target.
“It would be hard for me to see that we could get to the 2% overall target unless house prices, inflation comes down substantially from where it is right now,” Goolsbee stated.
Despite the current challenges, Goolsbee remains optimistic, noting, “I’m still both optimistic and my read of the evidence is that that is going to happen.” He pointed to yesterday’s CPI numbers, which show some decrease in housing costs, as a positive sign.
However, he cautioned that if this trend does not continue, Fed will need to delve deeper to understand the underlying issues.
