FED Official Said May Interest Rate Decision Was Just a Thing, Answered the Question of Interest Rate Cuts!

FED Board member Austan Goolsbee spoke to reporters today about the state of the US economy and the Fed’s interest rate decisions. He said he has yet to make up his mind on the next rate move in June and thinks it was a mistake to take any policy action while more data comes in.

“May Interest Decision Has Been Closely Taken”

Goolsbee said that he considers the interest rate decision in May, when the Fed increased the interest rate by a quarter point to 5.25%, as a narrow point. Goolsbee said he wasn’t sure if the Fed had yet reined in the economy enough to reduce inflationary pressures, especially in the housing and services sectors.

He said housing inflation hasn’t dropped yet, but he expects it to drop in the coming months. He also said that services inflation is more persistent than previously thought and that the Fed should take into account the tightening in financial conditions caused by higher interest rates.

Goolsbee said it’s too early to discuss rate cuts and the Fed’s policy stance remains data-driven. He said he would closely monitor the incoming economic indicators before making his decision for the interest rate meeting in June.

*Not investment advice.