Chicago Fed's Goolsbee Says Central Bankers Must Avoid Over-Dependence On Market Reaction: 'Our Job Is Ultimately Judged By...'

Federal Reserve Bank of Chicago President Austan Goolsbee reportedly said central bankers must avoid putting too much weight on financial markets and should focus on what they learn from incoming data.

This was Goolsbee's first speech since he took office last month. In his remarks prepared for an event at Ivy Tech Community College in Indiana, Goolsbee it is a danger and a mistake for policymakers to rely too heavily on market reactions.

"Our job is ultimately judged by what happens in the real economy," he said according to a Bloomberg report.

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U.S. markets ended the last trading day of February in the red as investors and traders remained concerned about the Federal Reserve's future policy path. Markets pared gains made in January as strong economic data coupled with a tight labor market raised concerns the central bank may remain on its rate hike path for longer than expected.

The SPDR S&P 500 ETF Trust SPY closed 0.37% lower on Tuesday while the Invesco QQQ Trust Series 1 QQQ lost 0.13%.

Goolsbee also observed data that bounces around can make it difficult to see what's going on in the economy.

"So, it's important to supplement these traditional data with observations on the ground from the real economy," he said, adding that this is especially true when things are as strange and up in the air as they have been through much of the pandemic times.”

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