Fed's Goolsbee: Inflation isn't stalling, it's getting worse

• Raising interest rates to combat supply-side inflation risks demand destruction, as monetary policy cannot address underlying supply issues.
• Stagflationary shocks, characterized by destroyed employment and rising prices, are among the worst challenges for a central bank.
• Inflation is currently 'getting worse' and not merely stalled, while the job market has remained stable for over a year.

Chicago Fed President Austan Goolsbee discusses the challenges of stagflationary shocks, where supply-side issues simultaneously destroy employment and drive up prices. He notes that traditional monetary policy tools are ineffective against such shocks and expresses concern that inflation is 'getting worse,' not just stalling, despite a stable job market. This situation necessitates a serious look at the inflation side.