Goolsbee has warned against raising interest rates too aggressively since taking on his new role in January
Economist Austan Goolsbee at the University of Chicago's Gleacher Center in 2016, was an economic adviser to President Barack Obama.
While the Federal Open Market Committee does not meet again until September, economists are watching the Fed’s annual Jackson Hole Economic Policy Symposium, which begins Thursday, to get a sense of which way monetary policy is headed. Goolsbee said rates may not have to go much higher, but it may be a while before they begin to come down.
Fed monetary policy, meanwhile, which usually navigates a trade-off between inflation and unemployment, has somehow seen both numbers improve, defying conventional economic theory. Goolsbee said. As inflation declines, the unemployment rate, which peaked at 14.7% in April 2020, has since dropped to pre-pandemic levels, coming in at 3.5% in July.
Goolsbee said youth employment is a more complicated issue, especially as the economy evolves, when those who discontinue their education may lack the degrees and certificates needed to compete for future jobs.For much of the past year, Fed members have projected that interest rates would be higher for longer than the market was betting. More recently, the market has aligned with the Fed. Goolsbee said it may be until late next year before rates begin to come down.
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