Chicago Fed President Austan Goolsby on Thursday warned that recent attacks on the central bank and Chairman Jerome Powell could have a negative impact on inflation.
“Anything that violates or attacks central bank independence is disruption,” Goolsby said in an interview on CNBC’s “Squawk Box.” “If we try to take away central bank independence, inflation will return to full force.”
The comments came days after Chairman Powell acknowledged that he had received a subpoena from the Department of Justice regarding a multibillion-dollar renovation project at the Washington, D.C., Fed’s headquarters. Cost overruns have been a point of contention between the Fed and the White House, and the latest developments point to the possibility of criminal charges against Mr. Powell.
While Goolsby said he was not commenting directly on legal issues, he expressed support for Powell’s statement on Sunday that questions over construction projects could be seen as an excuse for President Donald Trump to get his way on interest rates.
“I agree with his argument that if they’re investigating it as an excuse to disagree with the interest rate decisions, that’s outrageous. We shouldn’t be there,” he said.
Mr. Trump has been relentless in his harsh and personal criticism of Powell. He has repeatedly called for deep cuts in interest rates, earning Mr. Powell the nickname “Too Late,” even though the Fed has lowered its benchmark rate three times since September 2025.
Powell’s term ends in May, but he could remain governor until 2028.
Goldsby, like other Fed officials, said the Fed’s independence is important to achieving its goals.
“I know that there have been countries that have conducted criminal investigations against their central banks, but many of those countries are not developed countries, such as Zimbabwe, Russia, and Turkey,” he said.
Prior to joining the Chicago Fed in December 2022, Goolsby had a long history of involvement in Democratic politics.
He served as chairman of the Council of Economic Advisers under former President Barack Obama and served as an adviser to Joe Biden during his 2020 campaign, but said Thursday that he will no longer be involved in campaign work once he becomes a sworn member of the Federal Reserve Board.
Mr. Goldsby called Mr. Powell a “first-ballot Hall of Famer” as Fed chair for his work in controlling inflation without causing a recession.
