Chicago Federal Reserve Bank President Austan Goolsbee issued a warning on Thursday regarding recent attacks on the Fed and its Chair, Jerome Powell, stating such actions could negatively impact inflation. Goolsbee stated, "Any action that infringes upon or undermines the Federal Reserve's independence will yield adverse consequences. Attempts to strip the central bank of its autonomy will lead to a forceful resurgence of inflation." This statement came just days after Powell confirmed he had received a subpoena from the U.S. Department of Justice concerning the multi-billion-dollar renovation project at the Fed's Washington headquarters. Cost overruns on this project had previously become a point of contention between the Fed and the White House, and the latest developments suggest Powell could potentially face criminal charges. Although Goolsbee indicated he would not comment directly on the legal matter, he expressed support for a statement Powell made on Sunday. In that statement, Powell suggested the investigation into the infrastructure project might be a pretext for former President Trump to achieve personal goals regarding interest rate policy. Goolsbee said, "I agree with his perspective. It would be a disaster if investigations were used as a tool for intervention simply because of disagreements over interest rate decisions. We must avoid finding ourselves in such a situation." Trump has consistently launched sharp, often personal, verbal attacks against the Fed under Powell's leadership. Despite the Fed having cut its benchmark interest rate three times since September 2025, Trump has repeatedly called for more substantial rate reductions, even dubbing Powell with the nickname "Mr. Too Late." Powell's term as Fed Chair is set to expire next May, although he could remain on the Fed's Board of Governors until 2028. Echoing the views of other Fed officials, Goolsbee emphasized that the central bank's independence is crucial to achieving its policy objectives.
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