Austan Ghoolsby, president and CEO of the Federal Reserve Bank of Chicago, said he hopes the Federal Reserve maintains financial independence and cites the agency’s credibility amid the attacks from President Trump.
Ghoolsby joined CBS News’ Face the Nation on Sunday, squeezing Trump’s pressure on Federal Reserve Chairman Jerome Powell as the president rolls out his tariff agenda.
“There’s a virtual unanimity between economists that financial independence from political interference, that the Fed or central bank can do the work that needs to be done,” Goolsbee said.
He pointed out that financial independence from politics was a long-standing idea that US economists had decided after seeing other countries that had no such independence.
“We strongly hope that we will not move ourselves into an environment where financial independence is questioned because… it undermines the Fed’s reliability,” he said.
Ghoolsby’s remarks come after Trump urged Powell to cut interest rates to ease pressure on the economy amid his tariff rollout.
His attempts to change interest rates to the Fed have raised concerns before. While Trump was campaigning, experts and investors expressed vigilance over the potential plans of the then alliance to cut central bank independence.
Trump criticized Powell sharply after Powell warned about stagflation due to tariffs, saying the end of the Fed’s chair “can’t come quickly enough.”
Powell was appointed by Trump in 2017 to the Fed, and while his term will not end until next year, the administration’s top economic adviser said he is looking for a way to expel him sooner.
If Powell sees him pass his term, he will be chaired until next May and will serve on the federal government’s board of directors until 2028.
Goolsbee noted that there was a lot of uncertainty about the tariff plan, and that the announcement of the “liberation date” on April 2 was greater than companies expected.
After Trump’s initial announcement that Trump had shocked markets around the world, he returned to his plan and announced a 90-day suspension on mutual tariffs on many countries. He lowered import taxes from countries except China to 10% and gave them a 90-day extension to negotiate deals with the US.
Goolsbee claimed it caused “many question marks.”
“We don’t know 90 days from now… when they revisit the tariffs, we don’t know how big they will be,” he said.
