Fed's Goolsbee: Fed needs to be steady hand and take long view on economy

In an interview with CNBC on Friday, Federal Reserve (Fed) Bank of Chicago President Austan Goolsbee said that they have to wait for things to clear up when there is a lot of uncertainty.

Key takeaways

"There has been a decided turn towards anxiety and waiting on capital spending among business contacts."

"Current conditions are maybe a shock to the economy depending on how long they last."

"The Fed needs to be a steady hand and take the long view on the economy."

"Markets want information fast but that is not realistic at this moment."

"Still a lot of strength in the economy right now."

"Unemployment and inflation do reflect progress towards the dual mandate."

"Before judging how monetary policy reacts to tariffs, Fed needs to know how long the tariffs last, possible retaliation, pass through to consumers."

"Imports are only 11% of GDP, so one time tariffs that are not followed by retaliation are more likely to be transitory."

"The bigger they are and the more like supply shocks they are the harder it will be for the fed to look through them."

"The answer to what transitory means this time around is whether the tariffs apply to intermediate goods, stoke retaliation, and other factors."

Market reaction

These comments failed to trigger a noticeable reaction in the US Dollar Index. At the time of press, the index was up 0.12% on the day at 103.92.