Chicago Fed President says US central bank independence is crucial to curbing inflation

Federal Reserve Bank of Chicago President Austan Goolsbee emphasized the importance of maintaining the US central bank’s independence. His comments came amid growing criticism from Donald Trump targeting Fed Chair Jerome Powell.

Goolsbee argues that political interference would undermine the Federal Reserve’s ability to make strategically sound yet unpopular decisions. Such pressure could lead to higher inflation, a slower US economy, and rising unemployment.

On Friday, Donald Trump again criticized Jerome Powell for refusing to cut interest rates. The remarks sparked fresh debate over whether the US president might try to influence monetary policy either through legislative measures or by installing a “shadow chair”.

Kevin Hassett, Director of the US National Economic Council, confirmed that the Trump administration is actively weighing options to fire Powell. However, the Fed Chair has cited legal provisions that prevent his early removal, and has made clear his intention to serve out his term, which runs until 2026.