Chicago Fed President Austan Goolsbee went on CNBC and basically said that messing with the Fed’s independence is a bad idea if you don’t want inflation to come roaring back.
This comes after Powell confirmed he’s been subpoenaed by the DOJ over cost overruns on the Fed’s HQ renovation. Goolsbee didn’t comment on the legal side, but he backed Powell’s point that going after the Fed as a way to influence rate decisions is dangerous.
His main message was simple: If the central bank starts taking political pressure on interest rates, inflation risk goes up. He even pointed out that countries where central banks get criminally targeted aren’t exactly the ones you want to copy.
Trump has been publicly criticizing Powell for years and keeps pushing for lower rates, even though the Fed has already cut rates three times since September 2025.
Markets didn’t love the headlines dollar dipped, gold stayed strong, and futures were slightly red.
No immediate trade idea here, just another reminder that Fed independence actually matters for price stability.