Fed's Goolsbee: The Fed needs to focus on longer trends.
|Federal Reserve (Fed) Bank of Chicago President Austan Goolsbee noted on Friday that markets tend to overreact to interest rate changes, and that the Fed should maintain a slow and steady approach to reaching the neutral rate.
Key highlights
(In regards to a December rate cut or pause) I don't like tying our hands, still more data to come.
Markets react immediately and in most extreme terms; that's not the Fed's timetable.
The Fed needs to focus on longer trends.
We are going to be looking at rate cuts along the lines of September Fed policymaker projections.
I am personally comfortable with not charging right towards neutral and slow down as we approach it.
Inflation numbers have to keep improving.
If we started to see reversal on inflation progress, we would have to figure out if it is a bump.
Not a lot has changed on that in last couple weeks.
Recent inflation has been a little higher than the target, if that is extended, it's too high.
There's a lot of volatility on inflation data series.
Neutral is significantly lower than where the Fed policy rate is now.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.