Fed’s Goolsbee: We need to asses potential impact of financial stress on the economy

Federal Reserve Bank of Chicago President Austan Goolsbee, said on Tuesday that they need to be cautious about raising interest rates after recent development in the banking sector. He mentioned that the central bank needs to assess the potential impact of the financial stress on the real economy. 

Speaking at the Economic Club of Chicago, Goolsbee said that they should gather further information and be careful about raising rates “too aggressively” until they see how much work the headwinds are doing for the central bank in getting inflation down. According to him, markets and financial issues should not drive actions from the Fed. 

Market reaction 

The US Dollar Index is falling on Tuesday, ending a four-day positive streak. It is hovering around 102.20, down 0.32% for the day. US bond yields are higher, with the 2-year yield at 4.06%, the highest in a week.