Chicago Fed President Goolsbee Warns of Stagflation Shock in Asia Due to Prolonged Energy Inflation

Chicago Fed President Austan D. Goolsbee stated on Thursday that energy inflation related to the war with Iran has lasted longer than expected, posing a 'stagflation shock' to Asian economies. According to Jin10, Goolsbee made these remarks during a conference organized by the Bank of Japan and the Japan Bank for International Cooperation. Initial forecasts in the futures market had anticipated energy prices to be 'significantly lower' than current levels. Although recent signs of progress in peace talks between the U.S. and Iran have led to a decline in oil prices, they remain noticeably higher than pre-war levels. Goolsbee also issued a warning to Asian economies, noting that due to their reliance on energy imports, the impact resembles a 'traditional stagflation shock.'