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With the right to vote on interest rate decisions this year, Austan Goolsbee said he monitors oil prices as an “area of concern.”

 

Per

Estadão Content

5 Oct 2023 6:20 pm

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Updated 3 hours ago

 

The US Treasury building in Washington, DC, US, on Friday, Dec. 30, 2022. The Federal Reserve's preferred inflation measures eased in November while consumer spending stagnated, suggesting the central bank's interest-rate hikes are helping to cool both price pressures and broader demand, with more tightening on the way.

The president of the Chicago Federal Reserve (Fed, the North American central bank), Austan Goolsbee, did not say what his next vote on monetary policy decisions might be, and highlighted that the institution will in fact react to the indicators. Participating in a Bloomberg podcast, the director highlighted, however, that the Fed will not back down from its intention to reach the 2% inflation target.

 

With the right to vote on interest rate decisions this year, Goolsbee said he monitors oil prices as an “area of concern.”

 

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Another mentioned was the labor stock, which could also influence inflation. “But this is also running out of steam,” he added.

 

Goolsbee commented on the possibility of controlling inflation without causing a major recession. He sees this as possible in the current framework, although not guaranteed.

 

The director also noted that the market expects the Fed to raise interest rates once again, keeping them at a high level for a while to contain inflation. According to him, the market expectation is that inflation will return to the target “relatively in the near future” without a recession.

 

Goolsbee said the Fed is also monitoring the bond market following the recent rise in Treasury rates. If a credit crisis occurs, there could be a substantial worsening of the situation, and the North American BC would adjust to this, he said.