Austan Goolsbee Named Next President of the Chicago Fed
Austan Goolsbee, who served as a top economic adviser to former President
Barack Obama,
will become the next president and chief executive of the Federal Reserve Bank of Chicago, the bank said Thursday.
Mr. Goolsbee, 53, is a professor of economics at the University of Chicago’s Booth School of Business. He was chair of the White House Council of Economic Advisers from 2010 to 2011.
The Chicago Fed president will have a vote on the Federal Reserve’s interest-rate-setting committee next year as it faces key decisions about how to battle inflation, which is running near a four-decade high.
Mr. Goolsbee will succeed
Charles Evans,
who hits a mandatory retirement age in January and has served as the bank’s president since 2007. Mr. Goolsbee will be eligible to serve in the position until 2034.
The presidents of the Fed’s 12 quasi-private reserve banks are chosen by the individual banks’ boards of directors, whose members are typically business or nonprofit executives. The selections are subject to approval by the Fed’s seven-member board of governors in Washington.
In the summer of 2021, Mr. Goolsbee was among the many economists who argued that increasing inflationary pressures were being driven primarily by supply-chain bottlenecks and were likely to abate largely on their own.
The Fed largely maintained that view until one year ago, when officials began withdrawing stimulus after seeing that inflation was worsening. The central bank has raised rates this year at the fastest pace since the early 1980s in an effort to slow inflation by curbing demand.
This year, Mr. Goolsbee has pointed to high inflation in Europe and other parts of the world as evidence that U.S. fiscal stimulus hasn’t been the main phenomenon explaining higher prices. But he has said that with the benefit of hindsight, the Biden administration’s financial relief programs were probably too large.
In an interview on the Fox Business Network last week, Mr. Goolsbee said it was too soon to say whether inflation had peaked. “I hope that we’ve peaked but I think that the rate at which it comes down might not be as rapid as everyone wants,” he said.
Mr. Goolsbee also said it was premature to say how high the Fed might have to raise interest rates. “Anybody saying what the terminal rate is, where the Fed is going to stop, that hinges completely on what happens to inflation,” he said. “If we started to get month after month of inflation numbers that were worse than expected, there is no terminal rate. They will keep raising rates until they stop inflation.”
Mr. Goolsbee said a recession is “not inevitable,” but warned of the risks of aggressively raising rates to wring inflation out of the economy when the economy faces constraints on the ability to supply goods and services.
“If we get a massive rail strike, the Fed keeps raising rates, and there’s no improvement in external conditions—either the war in Ukraine or in China—then I think it’s very likely that we have a recession,” he said. “The Fed raising interest rates is by far the most common cause of recessions if you look since World War II. And if they’re raising rates this rapidly … the chance that you overshoot is pretty high.”
Mr. Goolsbee, a Democrat, in 2019 endorsed the presidential candidacy of
Pete Buttigieg,
who was then the mayor of South Bend, Ind., and is now the U.S. secretary of transportation.
Write to Nick Timiraos at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Austan Goolsbee, who served as a top economic adviser to former President
Barack Obama,
will become the next president and chief executive of the Federal Reserve Bank of Chicago, the bank said Thursday.
Mr. Goolsbee, 53, is a professor of economics at the University of Chicago’s Booth School of Business. He was chair of the White House Council of Economic Advisers from 2010 to 2011.
The Chicago Fed president will have a vote on the Federal Reserve’s interest-rate-setting committee next year as it faces key decisions about how to battle inflation, which is running near a four-decade high.
Mr. Goolsbee will succeed
Charles Evans,
who hits a mandatory retirement age in January and has served as the bank’s president since 2007. Mr. Goolsbee will be eligible to serve in the position until 2034.
The presidents of the Fed’s 12 quasi-private reserve banks are chosen by the individual banks’ boards of directors, whose members are typically business or nonprofit executives. The selections are subject to approval by the Fed’s seven-member board of governors in Washington.
In the summer of 2021, Mr. Goolsbee was among the many economists who argued that increasing inflationary pressures were being driven primarily by supply-chain bottlenecks and were likely to abate largely on their own.
The Fed largely maintained that view until one year ago, when officials began withdrawing stimulus after seeing that inflation was worsening. The central bank has raised rates this year at the fastest pace since the early 1980s in an effort to slow inflation by curbing demand.
This year, Mr. Goolsbee has pointed to high inflation in Europe and other parts of the world as evidence that U.S. fiscal stimulus hasn’t been the main phenomenon explaining higher prices. But he has said that with the benefit of hindsight, the Biden administration’s financial relief programs were probably too large.
In an interview on the Fox Business Network last week, Mr. Goolsbee said it was too soon to say whether inflation had peaked. “I hope that we’ve peaked but I think that the rate at which it comes down might not be as rapid as everyone wants,” he said.
Mr. Goolsbee also said it was premature to say how high the Fed might have to raise interest rates. “Anybody saying what the terminal rate is, where the Fed is going to stop, that hinges completely on what happens to inflation,” he said. “If we started to get month after month of inflation numbers that were worse than expected, there is no terminal rate. They will keep raising rates until they stop inflation.”
Mr. Goolsbee said a recession is “not inevitable,” but warned of the risks of aggressively raising rates to wring inflation out of the economy when the economy faces constraints on the ability to supply goods and services.
“If we get a massive rail strike, the Fed keeps raising rates, and there’s no improvement in external conditions—either the war in Ukraine or in China—then I think it’s very likely that we have a recession,” he said. “The Fed raising interest rates is by far the most common cause of recessions if you look since World War II. And if they’re raising rates this rapidly … the chance that you overshoot is pretty high.”
Mr. Goolsbee, a Democrat, in 2019 endorsed the presidential candidacy of
Pete Buttigieg,
who was then the mayor of South Bend, Ind., and is now the U.S. secretary of transportation.
Write to Nick Timiraos at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
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