Fed’s Goolsbee says inflation could come ‘roaring back’ if central bank independence goes away

Chicago Federal Reserve President Austan Goolsbee expressed caution Thursday about recent attacks on the central bank and Chair Jerome Powell, saying they could adversely affect inflation.

“Anything that’s infringing or attacking the independence of the central bank is a mess,” Goolsbee said during a CNBC “Squawk Box” interview. “You’re going to get inflation come roaring back if you try to take away the independence of the central bank.”

The comments come just days after Powell confirmed he’d been subpoenaed by the Justice Department regarding the multibillion-dollar renovation project at the Federal Reserve’s Washington, D.C., headquarters. Cost overruns have been a point of contention between the Fed and the White House, with the latest developments pointing to a potential criminal prosecution of Powell.

While Goolsbee said he wasn’t commenting directly on the legal issues, he expressed support for Powell’s statement Sunday that the questions over the construction project could be seen as a pretext toward President Donald Trump getting his way on interest rates.

“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. We should not be in that place,” he said.

Trump has been relentless in his biting, often-personal criticism of the Powell Fed. He repeatedly has called for much lower interest rates and has nicknamed Powell “Too Late” even though the Fed has cut its benchmark rate three times since September 2025.

Powell’s term as chair ends in May, though he could stay on as a governor until 2028.

Like other Fed officials, Goolsbee said the independence of the Fed is critical for it to achieve its goals.

“I know that there have been countries that had criminal investigations of their central banks, but those countries are Zimbabwe and Russia and Turkey and a bunch of places that you would not characterize as advanced economies,” he said.

Before taking his position at the Chicago Fed in December 2022, Goolsbee had a long history of involvement in Democratic politics.

He chaired the Council of Economic Advisers under former President Barack Obama and served as an advisor during Joe Biden’s campaign in 2020. However, he said Thursday that once “you’ve become a sworn member of the Federal Reserve, you’re out of the elections business.”

Goolsbee has called Powell a “first-ballot Hall of Famer” as a Fed chair for bringing down inflation without causing a recession.