Federal Reserve Bank of Chicago President Austan Goolsbee said much of the impact from the Fed’s rapid rate-hiking campaign is still working its way through the economy, and said policymakers need to be careful as they assess their next move.
(Bloomberg) — Federal Reserve Bank of Chicago President Austan Goolsbee said much of the impact from the Fed’s rapid rate-hiking campaign is still working its way through the economy, and said policymakers need to be careful as they assess their next move.
“There’s still a lot of the impact of the 500 basis points we did in the last year that’s still to come,” Goolsbee said in an interview with CNBC Monday.
Goolsbee said it’s too soon to say what officials should do at their June 13-14 meeting, though he said his vote to support a rate hike last month was “a close call” given the turmoil in the banking sector.
Policymakers raised rates by a quarter percentage point at a meeting earlier this month, bringing their benchmark to a target range of 5% to 5.25% and signaling they may be ready to pause their tightening cycle.
Goolsbee said the Fed is now focused on the extent to which financial stress is filtering through to the rest of the economy. Meanwhile, inflation is improving but not rapidly, he said, and the labor market is still strong, suggesting policymakers may have more work to do to rein in price pressures.
Prices climbed 4.9% from a year earlier in April, consumer price index data released Wednesday showed, the first sub-5% reading in two years.
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