Fed’s official: Prolonged tightening of monetary policy will hurt jobs

Austin Goolsbee, president of the Federal Reserve Bank of Chicago, said that it is becoming more difficult for individuals and businesses to obtain loans in the United States and that failure to cut interest rates will hurt the labor market.

Goolsbee added that the Fed is widely expected to cut interest rates next month.

He added, in an interview with CBS, “When you raise the interest rate, as we did, and keep it there while inflation is falling, you are in effect tightening (monetary policy).”

While economic data shows a mix of positive and worrying indicators, Goolsbee said, “If you keep your monetary policy tightening for a long time, you are going to have a problem with employment.”