During an interview at a European Central Bank conference in Sintra, Portugal, Chicago Federal Reserve Bank President Austan Goolsbee expressed concerns about signs of weakening in the economy. He emphasized the importance of monitoring inflation trends to determine if they are moving closer to the Fed’s 2% target. If inflation continues along its current path, he indicated that it could increase confidence in the Fed’s decision-making regarding interest rates.
Goolsbee highlighted the need to only maintain a restrictive policy for as long as necessary to achieve economic stability. He emphasized that Fed policy naturally becomes more stringent as inflation decreases. He noted that while lowering inflation is important for maintaining price stability, it must be balanced with not negatively impacting the labor market.
Overall, Goolsbee’s comments suggest a cautious approach to managing economic indicators and policy decisions in order to support the health of the economy and labor market.
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