In the Asian session on Monday (May 8), the U.S. dollar index fell back from a high, and the latest price of the U.S. dollar was 101.26, a decrease of 0.01%. Bullard said he supported the Fed‘s recent rate hikes and said a “majority” on the committee would like to see rates above 5%, a level that currently puts rates in a sufficiently restrictive range. He also played down recent pressures on the banking sector, which he said were manageable.
Chicago Fed President Goolsbee sounded more dovish, arguing that stress in the banking sector could hurt growth and reduce the need for officials to continue raising interest rates. “We know that credit conditions, as we’re seeing now, have been associated with recessions in the past, and tighter credit has somewhat substituted for tighter monetary policy. We have to rely on data,” he said. It should be “cautious and patient”, especially as the Fed assesses the impact of tightening lending on the economy after several bank failures. Still, he joined his colleagues in voting for a quarter-point hike.
