Federal Reserve Bank of Chicago President Austen Goolsby believes that Maintaining caution, vigilance and prudence is the right monetary policy during moments of financial stress.
What happened: “And I don’t say this because I think we should stop prioritizing the fight against inflation just because the market got upset. It’s a perspective I call financial dominance which believes that financial issues are more important and They should dominate monetary policy concerns when they do conflict. There are people who believe that, who believe those financial conditions should drive Fed action. But I absolutely do not,” he said Tuesday. Video Tweeted by Bloomberg TV.
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Major Wall Street indices closed mixed on Tuesday as investors and traders remained cautious ahead of the release of consumer price inflation data on Wednesday. SPDR S&P 500 ETF Trust Spy closed 0.03% higher, while Invesco QQQ Trust Series 1 QQQ fell 0.64%.
On rate hike: Golsby’s comments on the need to be cautious about raising rates aggressively provided some respite to market participants amid caution ahead of the release of inflation data on Wednesday.
“Given how much uncertainty there is about when these financial headwinds are going to go away, I think we need to be cautious. We should gather more data and we should be extra careful about raising rates aggressively.” until we see how adversity is working for us.” reducing inflation,” Golsby said.
According to the CME Fedwatch tool, market participants are considering more than 67% probability for a rate hike of 25 basis points during this period. Fed’s next policy meeting
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