Chicago Fed President: “A criminal probe of the Fed is something you’d see in Zimbabwe” [Fed Watch]

Austan Goolsbee, president of the Federal Reserve Bank of Chicago, warned that inflation could surge again if the independence of the U.S. central bank (the Fed) is undermined. He said the Trump administration’s recent political offensive targeting the Fed and Fed Chair Jerome Powell could adversely affect price stability.

In an interview with CNBC on the 15th (local time), Goolsbee said, “Any act that infringes on or attacks the independence of a central bank is a serious problem,” adding, “If you try to strip the Fed of its independence, inflation will come roaring back.”

The remarks came just days after Powell said he had received a subpoena from the Justice Department in connection with the renovation project at the Fed’s headquarters in Washington, D.C. The project, worth several billion dollars, has become a flashpoint in tensions between the Fed and the White House over cost overruns. Recently, the possibility of criminal charges against Powell has also been raised.

Goolsbee avoided commenting on the specific legal issues, but said he agreed with Powell’s view that complaints about the construction project could serve as a pretext for President Donald Trump to impose his will on interest-rate decisions.

“If an investigation is used as a pretext simply because someone disagrees with an interest-rate decision, that is a serious problem,” he said. “We should not be in that situation.”

President Trump has continued to deliver scathing—and at times personal—criticisms of the Fed under Powell. He has repeatedly argued for deep rate cuts, and despite the Fed having cut rates three times since September 2025, he has attacked Powell by calling him “Too Late.”

Powell’s term as Fed chair ends in May, but he can remain on the Board of Governors until 2028.

Like other Fed officials, Goolsbee stressed that the Fed’s independence is essential to achieving its policy goals of price stability and employment. “There are countries where criminal investigations have been carried out against central banks,” he said, adding that such countries include “Zimbabwe, Russia and Turkey—places that generally are hard to classify as advanced economies.”

Before taking office as Chicago Fed president in December 2022, Goolsbee was active in Democratic politics. He served as chair of the White House Council of Economic Advisers under the Barack Obama administration and also advised President Joe Biden’s 2020 presidential campaign. “From the moment you become a member of the Fed, you fully step away from the realm of politics and elections,” he said.

Goolsbee has previously credited Powell with bringing down inflation without a recession, calling him “a Hall of Fame-caliber figure who would be inducted on the first ballot as Fed chair.”

New York—Park Shin-young, Correspondent nyusos@hankyung.com