Chicago Fed President: The Federal Reserve will respond to signs of economic weakness

The Federal Reserve will respond to signs of economic weakness and suggest that the level of interest rates may be too tight. Goolsbee stated that if any part of the overall situation deteriorates, the Federal Reserve will take corrective action. Goolsbee also stated that the current policy is restrictive and should only be adopted in the case of an overheated economy. Goolsbee does not believe that the U.S. economy is heading into a recession, but emphasizes the need to be forward-looking in addressing economic developments. Market expectations for a Fed rate cut have increased, leading to a sharp drop in bond yields. In addition, July non-farm payroll data fell short of expectations, but Goolsbee believes it does not resemble a recession