Chicago Federal Reserve Bank President Austan Goolsbee said on Wednesday that after the failure of two large regional Fed banks last month roiled the financial sector, he is waiting to see “whether there are other credit shoes to drop.”
“Not in the crisis sense, but in the how much squeezing is going to be coming up from the bank side,” Goolsbee said in an interview with American Public Media’s Marketplace. “I think it’s going to matter for whether this economy is going to slow down.”
Advertisement 2
THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLY
Subscribe now to read the latest news in your city and across Canada.
- Unlimited online access to articles from across Canada with one account.
- Get exclusive access to the National Post ePaper, an electronic replica of the print edition that you can share, download and comment on.
- Enjoy insights and behind-the-scenes analysis from our award-winning journalists.
- Support local journalists and the next generation of journalists.
- Daily puzzles including the New York Times Crossword.
SUBSCRIBE TO UNLOCK MORE ARTICLES
Subscribe now to read the latest news in your city and across Canada.
- Unlimited online access to articles from across Canada with one account.
- Get exclusive access to the National Post ePaper, an electronic replica of the print edition that you can share, download and comment on.
- Enjoy insights and behind-the-scenes analysis from our award-winning journalists.
- Support local journalists and the next generation of journalists.
- Daily puzzles including the New York Times Crossword.
REGISTER TO UNLOCK MORE ARTICLES
Create an account or sign in to continue with your reading experience.
- Access articles from across Canada with one account.
- Share your thoughts and join the conversation in the comments.
- Enjoy additional articles per month.
- Get email updates from your favourite authors.
Financial Post Top Stories
Sign up to receive the daily top stories from the Financial Post, a division of Postmedia Network Inc.
By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails or any newsletter. Postmedia Network Inc. | 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300
Goolsbee last month called for prudence and patience in policy-setting, and in the interview repeated those words, saying that tightening credit conditions may end up slowing inflation and the economy, replacing what might otherwise be the need for more monetary policy tightening.
But, he said, that does not mean he has decided whether the Fed needs to raise rates further at its upcoming May 2 to 3 rate-setting meeting, as financial markets and analysts expect it will.
“We still got a couple of weeks before the actual meeting, so if anybody imputed some specific basis points of what I was for, that’d be inaccurate,” he said.
In the next two weeks, he said, he will focus on prices and credit. Of note, he said, he will be looking at month-to-month inflation readings as giving a sense of recent trends; and he cautioned against paying too much attention to wages, which he said do not necessarily signal where prices are going. (Reporting by Ann Saphir Editing by Chris Reese and Josie Kao)
