Fed's Goolsbee says May rate hike was 'close call' for him By Reuters

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Fed's Goolsbee says May rate hike was 'close call' for him

Published May 15, 2023 08:59AM ET

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Fed's Goolsbee says May rate hike was 'close call' for him

© Reuters. FILE PHOTO: Austan Goolsbee, who is now the president of the Chicago Federal Reserve, speaks during the Obama Foundation "Democracy Forum" in New York City, U.S., November 17, 2022. REUTERS/Brendan McDermid

(Reuters) - Chicago Federal Reserve Bank President Austan Goolsbee said on Monday that his decision to support an interest rate hike at the U.S. central bank's most recent meeting in May was a "close call" as he weighed the impact of credit tightening from recent bank stresses.

"The thing that made it a close call for me is this big question mark about what is going to be the impact of this on credit conditions," Goolsbee told CNBC, adding that things did not appear to have become notably worse since the prior Fed meeting.

Asked about market expectations for rate cuts later in the year, even though Fed policymaker forecasts do not call for any, Goolsbee appeared to have a warning, noting that failed Silicon Valley Bank took off its own hedges against higher interest rates because it believed markets and not the Fed's projections.

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