Austan Goolsbee, president of the Chicago Fed, stated on Thursday that any attempts to undermine the independence of the Federal Reserve would lead to a resurgence of inflation.
“Anything that’s infringing or attacking the independence of the central bank is a mess,” Goolsbee said. “You’re going to get inflation come roaring back if you try to take away the independence of the central bank.”
Goolsbee’s remarks followed Fed Chair Jerome Powell’s confirmation that the Justice Department had issued him a subpoena. Powell described this action as part of an illegal case related to a significant renovation of the Fed’s headquarters in Washington, D.C.
The Chicago Fed president supported Powell’s recent assertion that the subpoena could be a tactic by Donald Trump to exert influence over interest rate policy.
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“I agree with it, with his argument that if you’re investigating as a pretext because you disagree with the rate decisions, that’s a mess,” Goolsbee stated. “We should not be in that place.”
Trump has continued to exert pressure on Powell, criticizing him with insults and advocating for considerably lower interest rates. Trump even gave Powell the moniker "Too Late."
This pressure comes despite the Fed having already reduced its main interest rate three times since September 2025. Trump's dissatisfaction persists, and he is now reportedly targeting Powell using federal government authority.
Powell's tenure as chair is set to conclude in May, though he has the option to remain a Fed governor until 2028. Goolsbee emphasized that such attacks extend beyond Powell personally and are not characteristic of stable, advanced economies.
“I know that there have been countries that had criminal investigations of their central banks,” Goolsbee said. “But those countries are Zimbabwe and Russia and Turkey and a bunch of places that you would not characterize as advanced economies.”
The loss of a central bank’s independence often leads to a decline in its credibility, which in turn typically results in rising inflation.
Goolsbee, who has a background in politics and previously advised Barack Obama and Joe Biden's 2020 campaign, affirmed that his personal political affiliations are irrelevant in his current role. “Once you’ve become a sworn member of the Federal Reserve, you’re out of the elections business.”
He also commended Powell's performance, describing him as a "first-ballot Hall of Famer" for his success in reducing inflation without triggering a recession.