Fed's Goolsbee Says Fed Will Need to Monitor Risks of Overshooting on Rates
A sustained rise in long-term rates can ‘have a very substantial effect on real economic performance,’ the Chicago Fed president says
- “The historical evidence suggests that long rates, even more than short rates, have a very substantial effect on real economic performance in a number of predictable areas—construction, investment, consumer durables,”
- “If that is sustained, the Fed will have to think about the tightening impact of those credit conditions on economic performance, and would there be dangers of overshooting.”
