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

Chicago Federal Reserve President Austan Goolsbee warned Thursday about recent attacks on the central bank and Chairman Jerome Powell, saying they could negatively impact inflation.

“Anything that violates or attacks the independence of the central bank is a complete mess,” Goolsbee said during a CNBC “Squawk Box” interview. “If you try to take away the independence of the central bank, you will cause inflation to come rushing back.”

The comments came just days after Powell confirmed he had been subpoenaed by the Justice Department regarding a multibillion-dollar renovation project at the Fed’s Washington, D.C. headquarters. Cost overruns have been a point of contention between the Fed and the White House; Recent developments point to potential criminal prosecution against Powell.

While Goolsbee said he does not comment directly on legal matters, he expressed support for Powell’s statement on Sunday that questions about the construction project could be seen as an excuse for President Donald Trump to get his own way on interest rates.

“If you are making an investigation as an excuse because you do not agree with the interest rate decisions, this is a complete disgrace. I agree with his claim that we should not be in this situation,” he said.

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

Powell’s term as president will end in May, but he can serve as governor until 2028.

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