From CNBC: 2024-08-05 09:11:52

Chicago Federal Reserve President Austan Goolsbee expressed readiness to respond to signs of economic weakness, hinting that interest rates might be too restrictive currently. Goolsbee did not commit to specific actions but emphasized the need to adjust policy in case of economic deterioration, without ruling out an emergency rate cut. Markets showed turbulence, with Dow Jones futures dropping nearly 3% amid plummeting Treasury yields post-Fed’s decision not to lower rates, fueling concerns about the Fed being slow to react to weakening economic indicators. Despite disappointing job growth and rising unemployment rates, Goolsbee believes the economy is not yet in a recession and that policy should reflect forward-looking economic data. Fed officials analyze the “real” fed funds rate, currently at 2.73%, amid expectations of aggressive easing measures starting with a 0.5% rate cut in September as fully priced in by market participants.

Read more: Chicago Fed President Goolsbee says if economy deteriorates, Fed will ‘fix it’