Goolsbee: ‘We Might Equal the Fastest Drop in Inflation in the Last Century’

EXCERPT:

GOOLSBEE: "I’ve been saying for months that the thing that we want to be paying attention to, as you look at the mandate, by law, we want to stabilize prices and maximize employment. I’ve been saying for months, be careful looking at the traditional side of if growth is high, if the job market is strong, and we’re creating a lot of jobs, that that means demand overheating, because I’ve thought these supply shocks are working their way through. That the overwhelming thing we need to do is pay attention to inflation and get the inflation down. The employment side of the mandate’s going well. It’s been — the inflation has been the problem. And I just want to emphasize, inflation has come down a lot. If you look over the last 100 years, in years that are not demobilizations for World War II and stuff like that, in the last hundred years, the fastest drop in the inflation rate in any year was 1982, of course, at the peak of the Volcker tightening. And depending which measure of inflation you want to use, it was a little over 4% drop in a single year. We’ll see what happens over the next couple of months. We might equal the fastest drop in inflation in the last century. So we’re making progress on the inflation rate. And as long as we’re making progress, as I have been saying for a while, the moment of arguing how high should the rate go is going to fade to how long should we keep rates at this level, as inflation is coming down, we're being more restrictive."