Federal Reserve’s Goolsbee emphasizes importance of Fed independence

Austan Goolsbee, President of the Federal Reserve Bank of Chicago, is making one thing very clear: keep your hands off the central bank. In a series of public remarks, Goolsbee has stressed that the Fed’s ability to operate free from political pressure is the single most important safeguard against runaway inflation in the US. Goolsbee hasn’t been shy about naming names. In interviews with NPR and CNBC, he drew a direct line between countries that have undermined their central banks and the inflation disasters that followed, pointing to Zimbabwe, Russia, and Turkey as cautionary tales. “The independence of the Fed couldn’t be more important for the long-run inflation rate in this country.” He went further, warning that any attempts to compromise the Fed’s autonomy would act as what he colorfully described as “a festering stink bug in the middle of that road back to 2%.” His remarks came during a period of heightened scrutiny of the Fed’s leadership. A US Justice Department investigation into Fed Chair Jerome Powell, related to a renovation project, added an unusual layer of tension to the conversation about central bank autonomy. Goolsbee responded by praising Powell as one of the ...