A MARTÍNEZ, HOST:
Let's dive a little deeper into the numbers with Austan Goolsbee. He's president of the Chicago Federal Reserve Bank. So, Austan, I mean, what stood out to you in the latest inflation report?
AUSTAN GOOLSBEE: Well, it didn't get worse, and that stood out. That's nice. Prices are on everyone's mind, but the showing that we're, let's say, on path headed back to 2% is an important challenge for us over the next couple of months.
MARTÍNEZ: I got to say, Austan, when you said it didn't get worse, I had to smile because does that qualify as good news now? It doesn't - it's not getting worse.
GOOLSBEE: Yeah. I - look, I don't know if that's necessarily good news. But before the lights went out in the government shutdown, we had gotten some semi-disturbing reports, and we're wanting to get assurance that things were not getting worse. So maybe there's a bright lining in that.
MARTÍNEZ: All right. We'll have to live with that, I suppose. Wondering what impact are President Trump's tariffs having on inflation?
GOOLSBEE: I think it's pretty clear in the data that tariffs have increased the price of goods pretty significantly. That said, our hope is that over the coming months, you would see this one-time increase in costs be one-and-done and that that might go away. As I'm out here in the Midwest, and the Chicago Fed is the most manufacturing intensive of all the Fed districts in the country, it's still on the minds of business people and of community leaders - their costs, their input costs, their costs that they're paying when they're going into the grocery store. That's still very much on people's mind. So if that tariff inflation proves to be more lasting than we hope, that would be a serious issue that we'd have to think about.
MARTÍNEZ: What are you going to be looking out for as the economy moves further into 2026?
GOOLSBEE: The best thing about the economy is the growth rate remains pretty strong, and the powerful driver of growth in the economy is not actually AI data center investment, and those - yes, those are strong, but it is the continued spending of the American consumer. That's been the strongest part. So one thing I'm looking for, is the consumer going to continue to be the driver of growth? And then on the inflation side, is there evidence that we're kind of putting this spike up in prices behind us?
MARTÍNEZ: You mentioned, Austan, you're wondering if consumers will drive growth. That, I would imagine, requires consumers to have confidence, investors to have confidence in the independence of the Federal Reserve Board. And now there's a big shadow hovering over the numbers because the Trump administration is apparently putting pressure on Federal Reserve Chair Jerome Powell. So I'm wondering, what's your assessment of that situation, and if that somehow will lead to having a lack of confidence in the independence of the Federal Reserve?
GOOLSBEE: Well, there are a lot of moving parts to that question. The independence of the Fed couldn't be more important for the long-run inflation rate in this country. Any place where you don't have central bank independence, inflation comes roaring back. And we've spent the last five years fighting to get the inflation rate down, and that hasn't been easy. And if you're attacking the independence of the Fed, that makes that problem worse. And I will say, I consider Chair Powell to be a first-ballot Hall of Fame Fed Chair. And if we're going to get into a circumstance where the independence or even the integrity of Chair Powell is in question, we - we're in a bad spot.
MARTÍNEZ: That's Austan Goolsbee, president of the Chicago Federal Reserve Bank. Austan, thank you very much. Always appreciate you making time for us.
GOOLSBEE: Yeah. Great talking to you again.
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