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After a turbulent day on Wall Street, Chicago Fed President Austan Goolsbee assured that the Federal Reserve is ready to step in if the US economy starts to show signs of serious trouble.

What he said: During an interview on CNBC, Goolsbee said, “The Fed’s job is very straightforward: maximize employment, stabilize prices and maintain financial stability. That’s what we’re going to do. We’re forward-looking about it. So if the conditions collectively start coming in like that on the through line, there’s deterioration on any of those parts, we’re going to fix it.”

Timing: Goolsbee’s remarks came as the Dow Jones dropped $1,084 by 12:40 PM PDT, marking a 5% decline over the past five days. The NASDAQ also experienced significant losses, falling by about $600 and losing 7% in the same period. In addition, roughly $1.2 trillion was wiped out from crypto. 

Digging Deeper: Stocks are dropping primarily due to the Federal Reserve’s decision to maintain high interest rates. The recent weak job numbers have exacerbated fears of an economic slowdown, leading to a sell-off in global markets. Additionally, international factors like Japan’s interest rate hikes and geopolitical tensions have further contributed to the negative market sentiment. These combined elements are causing uncertainty and driving stock prices down.

What Goolsbee said about interest rates: When asked about his thoughts on the current fed rate, he said, “Should we reduce restrictiveness? I’m not going to bind our hands of what should happen going forward because we’re still going to get more information. But if we are not overheating, we should not be tightening or restrictive in real terms.”