A senior Federal Reserve official warned Wednesday that the ongoing U.S.-supported conflict with Iran is primarily driving up prices across the American economy rather than damaging employment markets.
Chicago Federal Reserve President Austan Goolsbee expressed mounting anxiety about supply chain disruptions and sustained price increases during a video conference with reporters following his appearance at a Milken Institute conference in Los Angeles on Wednesday.
According to Goolsbee, the economic effects have not yet reached the level of stagflation, which would simultaneously harm both employment and price stability, forcing the central bank to choose which priority to address first.
“It has not yet been a stagflationary-direction shock,” Goolsbee explained during the call. “It has just been an inflationary shock. And the longer that continues, the more nervous that makes me.”
The Fed official noted that while job markets and economic growth have remained relatively stable so far, concerns are mounting about increasingly complex supply chain issues and price pressures that could prove more lasting than initially anticipated.
