Messing with the Fed’s independence could result in higher inflation and joblessness, Austan Goolsbee said.
by Jennifer Sor
Business Insider
Meddling with the Federal Reserve’s ability to independently set interest rates could result in dire consequences for the economy, Chicago Fed President Austan Goolsbee said on Monday.
The top official underscored the importance of Fed independence in an interview with CNBC on Monday, adding that political meddling with the central bank could result in hotter inflation and higher unemployment.
“When there is interference over the long run, it’s going to mean higher inflation, it’s going to mean worse growth and higher unemployment, because there’s just going to be a little less willingness to step up and do the hard things when the moment is tough,” Goolsbee said.