In 2022 and 2023, the Federal Reserve basically had one focus: defeating inflation. That's now changed. Keeping inflation at bay is still important, but the Fed is now attuned to labor market risks as well. On this episode of the podcast, we speak with Chicago Fed President Austan Goolsbee about how the US economy achieved something that almost nobody thought was possible: a marked decline in inflation without a major increase in the unemployment rate or a slowdown in economic activity. We discuss what actually happened to the economy over the last four years. What was the role of monetary policy in bringing down inflation? How much of the inflation turned out to be transitory all along? And what are the risks today, with the September jobs report having come in much stronger than expected? He explains why the Fed has shifted its priority and how he's thinking of risk management at this point in the economic cycle.

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