Federal Reserve Bank of Chicago President Austan Goolsbee said tighter credit conditions stemming from the recent banking turmoil could help the US central bank in its effort to bring down inflation, and reiterated that policymakers should not be too aggressive in raising interest rates.
(Bloomberg) — Federal Reserve Bank of Chicago President Austan Goolsbee said tighter credit conditions stemming from the recent banking turmoil could help the US central bank in its effort to bring down inflation, and reiterated that policymakers should not be too aggressive in raising interest rates.
“We’ve still got several weeks before the FOMC meeting, so I don’t want to specify to the basis point what is that going to mean for what I would be for at the FOMC meeting, because I still want to see the data,” Goolsbee said Friday an in an interview with CNBC. “But let’s just be mindful that we’ve raised a lot, it takes time for that to work its way through the system.”
Goolsbee said retail sales data released Friday morning suggest the Fed’s bid to cool the economy may be working, and recent inflation reports also show price pressures are easing, though he pointed to “clear stickiness” in some price categories.
He also said he would be focusing closely on credit conditions and lending data ahead of the Fed’s May 2-3 meeting.
Policymakers raised interest rates by a quarter point at their meeting last month. It was the second such hike, which followed larger increases last year as the Fed sought to bring down inflation.
Goolsbee earlier this week sounded a more dovish note than most of his colleagues, saying that the Fed should exercise “prudence and patience” in raising interest rates as policymakers assess just how much last month’s banking turmoil will contribute to tighter lending conditions.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.