Fed's Goolsbee (2027 Voter) says that a mix of supply and demand pressures on inflation has more impact on PCE than destination

Markets: Historically US long rates are not particularly high and does not think they reflect a loss of confidence in the US. Guidance: Without the Fed’s Summary of Economic Projections, the world will still be looking to understand officials’ reaction functions. The job of a central banker is not to respond to markets or the President, but to economic conditions. Fed should be open to making the SEP more informative. Fed remains very credible and everyone takes the job extremely seriously. Not thinking about any coming hikes as reversing last year’s cuts. Inflation: Components of inflation will matter to the Fed’s analysis, with services inflation not seen as tied to the oil price shock but as a product of strong demand. The Fed’s only choice if supply-shock inflation proves persistent is to reduce aggregate demand. District contacts are relaying concerns that sound like traditional demand overheating. Inflation data earlier this year seemed to show supply shocks waning; now some inflation is coming from demand. If inflation is mostly demand-driven, the rate response will have to be more aggressive and more front-loaded. The Fed is now more in the “action scenario” given the mix of inflation pressures. Labour Market: Business contacts report the labour market is getting tighter and alternative measures tell the same story. Current unemployment rate is “pretty close” to full employment. Month-to-month job growth is not a good measure of labour market health when there is doubt about population growth due to immigration policies.