Goolsbee, top Obama adviser, tapped to lead Chicago Fed

Austan Goolsbee, a former top economic adviser to President Barack Obama, has been named the next president of the Federal Reserve Bank of Chicago, the bank announced Thursday.

Goolsbee, who served as chairman of the White House Council of Economic Advisers from 2010 to 2011, will succeed Chicago Fed President Charles Evans, who is set to retire early next year after 15 years leading the bank.

Goolsbee’s appointment is effective Jan. 9. He will serve as one of 12 voting members of the Fed’s policy committee next year, having a crucial say on interest-rate decisions as the central bank weighs when to stop raising rates.

“The Federal Reserve Bank of Chicago has always been one of the crown jewels of the Fed system and the district it represents is the backbone of the American economy,” Goolsbee said in a statement released by the bank. “I am both humbled and excited to serve the public in this role.”

The 53-year-old economist is currently a professor at the University of Chicago’s Booth School of Business, where he has served on the faculty for the past 28 years.

Dr. Helene Gayle, who chairs the bank’s board and led the search for a new president, praised Goolsbee as “a highly accomplished economist with extensive policy experience and a strong commitment to public service.”

In an interview with Fox Business Network last week, Goolsbee said he hoped inflation had reached its height but cautioned against reading too much into a single encouraging report.

“If you look at what’s happening in China and the Covid shutdowns, war in Ukraine, there could still be more supply shocks to come,” he said. “So I hope that we’ve peaked, but I think that the rate at which it comes down it might not be as rapid as everyone wants.”

Asked whether he thought the Fed should aim to stop raising rates once its benchmark federal-funds rate reaches 5 percent, Goolsbee said it hinges entirely on progress in taming inflation.

“If we started to get month after month of inflation numbers that were worse than expected, there is no terminal rate,” he said. ”They will keep raising rates until they stop inflation.”

Fed Chair Jerome Powell signaled this week that central bank policymakers will likely dial back the size of their rate increases to half a percentage point when they meet on Dec. 13-14. Officials will also submit new forecasts for where they see inflation and interest rates heading next year.

The Fed’s 12 regional banks are quasi-private entities each overseen by independent boards of directors, who select each bank’s president for five-year terms that are approved by the board of governors in Washington. The Chicago Fed district includes the state of Iowa, and most of Illinois, Indiana, Michigan and Wisconsin.