Federal Reserve's Goolsbee Says Impact of War with Iran Resembles an Inflation Shock More Than Anything Else

Chicago Federal Reserve President Austan Goolsbee said on Wednesday that the war with Iran increasingly appears to be an inflationary shock to the economy. While the impact on employment and economic growth is not yet clear, concerns over supply chain disruptions and sustained price increases are growing. "This is not yet a 'stagflationary' shock," the kind that hits the labor market while pushing up inflation, forcing the Fed to decide which of its policy objectives faces greater risk, Goolsbee said after a meeting at the Milken Institute in Los Angeles. "This is purely an inflation shock. And the longer it persists, the more uneasy I become."