Fed/Goolsbee: Caution should be exercised on rate hikes

Chicago Fed President Austan Goolsbee said the Fed should be cautious about raising interest rates amid recent tensions in the banking sector. Chicago Fed President Austan Goolsbee emphasized the need for “prudence and patience” in monetary policy decision-making. “In moments like these when there is financial stress, I think the right monetary approach to assessing the potential impact of financial stress on the real economy requires prudence and patience,” he said in a speech at the Economic Club of Chicago. Goolsbee said that tighter credit conditions would help ease inflationary pressures, adding that the Fed’s monetary policy agenda was aligned. “There’s no contradiction between our current monetary policy and these tighter credit conditions, especially if they’re part of strengthening the financial system; they can work together to cool inflation,” Goolsbee said. “But we also have to recognize that this combination may hit some sectors or regions in a way that looks different than monetary policy acting on its own,” Goolsbee said.