Chicago Federal Reserve President Austan Goolsbee defended the central bank's independence, asserting it is essential for achieving low and stable prices.
"The Fed's independence is absolutely critical for the long-term inflation rate in this country," Goolsby stated in an interview with NPR on Wednesday.
"In any place where the central bank is not independent, inflation comes roaring back," Goolsby remarked when questioned about pressure from the Trump administration on the Fed Chair. "We have spent the last five years trying to bring inflation down, and it hasn't been easy. If you attack the Fed's independence, you only make the problem worse."
Fed officials and economic policymakers worldwide voiced support for the U.S. central bank this week, following the Department of Justice serving a subpoena to the Fed related to Chair Powell's congressional testimony last year.
Powell issued a statement on Sunday condemning the action, stating that "the threat of criminal charges essentially stems from the Fed setting interest rates based on the best assessment of public interest, not from catering to a president's personal preferences."
Neel Kashkari, President of the Minneapolis Federal Reserve Bank, expressed agreement. He said, "The escalation over the past year is fundamentally about monetary policy."
Goolsby praised Powell during the NPR program, adding, "If we get into a situation where the independence of Chair Powell, or even his personal integrity, is called into question, then we are in a very bad place."
The Chicago Fed President also commented that the lower-than-expected Consumer Price Index reading for December was "very good."
Comments