Chicago Fed President Austan Goolsbee strongly defended the central bank’s independence in remarks to CNBC, warning that undermining the Fed’s autonomy could have serious long-term economic consequences.
He emphasized that maintaining credibility around the Fed’s 2% inflation target depends on its ability to act free from political pressure.
“When there is interference over the long run,” Goolsbee said, “it’s going to mean higher inflation, worse growth, and higher unemployment, because there’s just going to be “a little less willingness to step up and do the hard things when the moment is tough”.
Goolsbee, who joined the Fed over two years ago, stressed that the economic consensus is overwhelmingly in favor of central bank independence. He pointed to global examples where the lack of such independence has led to significantly worse outcomes—higher inflation, weaker growth, and elevated unemployment.
His remarks come amid heightened concerns over potential political pressure from the White House, as reports circulate about President Trump exploring legal avenues to remove Fed Chair Jerome Powell.
