Chicago Fed President on inflation, recession, and Trump’s attacks

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**Austan Goolsbee** (2:00)
If you're going to have tariffs, and then the war in the Middle East begins, so the price of oil goes up, before the tariff shock went away, you got to keep a very close eye on how the inflation is going to transpire. But I don't want to be the guy who says, this is a once in a hundred year flood.

**Bob Safian** (2:22)
That's Austan Goolsbee, president of the Federal Reserve Bank of Chicago. I wanted to talk to Austan as the Fed heads into a big gathering today in Jackson Hole, Wyoming, to get an insider's perspective on the state of the US economy and how the Fed may act under the new leadership of Chair Kevin Warsh.
Austan shares eye-opening insights about what business leaders may be misreading about inflation, AI impacts, and the future of employment. And he talks directly about how the Fed operates in the face of pressure from the Trump White House. While he calls himself a grim optimist, his presence is certainly energetic, and he shares practical, on-the-ground advice for navigating an uncertain environment. So let's get to it. I'm Bob Safian, and this is Rapid Response.
I'm Bob Safian. I'm here with Austan Goolsbee, President of the Federal Reserve Bank of Chicago. Austan, great to chat with you.

**Austan Goolsbee** (3:25)
Yeah, Bob, great to chat with you.

**Bob Safian** (3:27)
There's a big Fed meeting in Jackson Hole this week. I was wondering how much of what goes on there is theatrics versus substantive engagement. Lots of conversations trying to cajole folks to see things your way, or more, quote, working vacation?

**Austan Goolsbee** (3:44)
It's put on every year by the Kansas City Fed because Jackson Hole, Wyoming, is in the Kansas City Fed district, but it's rustic. And so you got all of these Central bankers from around the world, the head of the European Central Bank, the head of the Bank of Japan, and they're gonna drapes them out into these little cabins. So it's good fun. I wouldn't call it theatrics, but there's a lot of learning, for me at least.
They're bringing in top people who are giving papers on various subjects. And there is substantive work, I think, that gets done, but it's not an FOMC meeting where we're making any decisions. And of course, everybody's sitting on the edge of their seat. They wanna know what the chair thinks, and the chair often gives the meaningful speech.

**Bob Safian** (4:35)
I mean, as an economist, you're trained to assess this broad range of factors, right? Jobs and supply chains and prices. And you're trying to integrate all that into this cohesive view in some ways, which there's always uncertainty in. I feel like right now things seem particularly uncertain with geopolitics and trade.
Does it feel that way to you?

**Austan Goolsbee** (5:00)
Yeah, it always feels like that. And then it's even worse sometimes, and now it's just a really, really strange moment. But that's no different than business people and startups. In every venue, we're always trying to make decisions under time pressure and without full information. And that's true at the Fed, too.
And so that's why I actually think this committee character that it has, where there's 12 reserve banks from around the country, and there's seven political appointees, each of which is on a 14-year term, is staggered so that you kind of try to get this as far out of the realm of political interference as is possible. I think that 19 people sitting around the table, each one with a different worldview, is pretty important at times when you got this much uncertainty, because at least we're not thinking the same way. We can yell at each other, get mad at each other, but my colleagues can change my views or how I interpret the data. And I think that's one of the more important aspects of how they have it set up.