The conflict in Iran could potentially trigger a surge in inflation and a slowdown in the U.S. economy, cautioned Chicago Federal Reserve Bank President Austan Goolsbee.
Goolsbee voiced his concerns at the Detroit Economic Club on Tuesday and noted that the war has already led to a spike in oil prices. He expressed concern over a potential “stagflationary outbreak” resulting from high oil prices and the U.S. consumer losing confidence.
This could further embed inflation into the economy, escalating prices and jeopardizing an already “stable but not great” job market.
He also underscored the challenging position of the Federal Reserve, which lacks a clear “cookbook” for managing such a situation. Stressing the importance of the Fed’s independence, he said that its primary duties are stabilizing prices and maximizing employment, not appeasing anyone.
“There’s nothing in the …Full story available on Benzinga.com
