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

(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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