Goolsbee More Balanced After Prior Dovish Leaning Comments

• Following from dovish leaning comments yesterday, Chicago Ged’s Goolsbee (’23 voter) offers slightly more balanced views speaking to Bloomberg TV.

One the one hand:

• There has been some froth taken off labor markets and he reiterated he felt it a close call on the May rate decision.
• Lowest market estimates of bank stress are equivalent to 25bp of higher interest rates from a Fed Funds equivalent and some saying 100-150bp increase on top of mon pol. If that does some of the work on top of mon pol you’ve just got to take that into account.

However,

• * DON'T KNOW IF FED HAS PUT IN ENOUGH RESTRAINT - bbg
• * SERVICE INFLATION IS MORE PERSISTENT THAN THOUGHT – bbg
• When asked about market pricing of cuts: I’m not a fan of setting mon pol based on what the market says or how it’s going to react. The overwhelming thing the Fed has to do is pursue the dual mandate. Far too premature to be talking about rate cuts and even to say for the next meeting what going to do.