By Ann Saphir
(Reuters) – Chicago Fed President Ostan Goolsbee on Sunday welcomed news of a deal to suspend the U.S. debt ceiling, saying no A deal would be “extremely detrimental to the financial system and the broader economy.”
In an interview with CBS’s “Face the Nation,” he declined to say whether he would support a deal in June Raise interest rates at the Federal Reserve meeting 14-14. He said that the full impact of the central bank’s rate hikes has not yet been felt.
Goolsby said: “There was a lot of great data coming out of the meeting. “Written by Republican Congressional Leader Kevin McCarthy and Democratic President Joe Biden.
“If you don’t, the impact on the financial system and the broader economy will be extremely negative, “Even the anticipation of these issues has an impact on the economy, and it does have an impact on financial markets.”
There is already “fear and uncertainty around interest rates , the Fed has increased by a full five percentage points since March 2022, said Goolsbee.
Questioning the value of U.S. debt — one of the safest and most widely held assets in the world — “isn’t good for lending, bad for the real economy . . . let’s avoid it: let’s Raise the debt ceiling and move on to the next thing.”
Goolsbee said he believed the Fed could avoid a recession.
“Action by the Fed will take months if not years There is no doubt that inflation is still too high – it has come down – we just want to manage. Can we bring inflation down without triggering a recession?”
Goolsbee is considered one of the Fed’s more dovish policymakers, more sensitive to threats to the Fed’s mission to keep Americans at full employment than to the dangers of an economic crisis. High inflation, although he has joined colleagues in raising interest rates so far this year.
Adjusted the policy rate to 5 after the direct rate hike earlier this month. %-5.25% range, Fed policy makers have signaled they may skip a rate hike in June to assess
Traders are betting if the Fed isn’t done raising rates yet, as fresh data showed that inflation is still more than double the Fed’s 2% target and progress has been slower policymakers had hoped.
Ahead of the Fed’s June interest rate decision, the monthly reading for the US unemployment rate remains at a multi-decade low of 3.4%, along with consumer price inflation.