Chicago Fed names ex-Obama adviser Goolsbee as next leader

Dec 1, 2022, 1:08 PM | Updated: Dec 2, 2022, 7:08 am
FILE - Then-Council of Economic Advisers Chairman under President Barack Obama, Austan Goolsbee, le...

FILE - Then-Council of Economic Advisers Chairman under President Barack Obama, Austan Goolsbee, left, testifies on Capitol Hill in Washington on Feb. 28, 2013, before the Joint Economic Committee hearing on state of the U.S. economy. Goolsbee will become president of the Federal Reserve Bank of Chicago next month, the regional Fed branch said Thursday, Dec. 1, 2022, replacing retiring president Charles Evans. (AP Photo/J. Scott Applewhite, File)

(AP Photo/J. Scott Applewhite, File)

WASHINGTON (AP) — Austan Goolsbee, who was a top economic adviser to President Barack Obama, has been chosen as the next president of the Federal Reserve Bank of Chicago, the regional Fed bank announced Thursday.

Goolsbee, 53, an economics professor at the University of Chicago who is a frequent commentator in opinion columns and television appearances, will succeed Charles Evans on Jan. 9. Evans is retiring after 15 years as head of the Chicago Fed after reaching the mandatory retirement age of 65.

As head of a regional Fed bank, Goolsbee will have a vote on the central bank’s interest rate decisions in 2023. Each year, four of the regional bank presidents rotate into voting positions on the Fed’s rate-setting committee.

Goolsbee was chair of the Obama White House’s Council of Economic Advisers from 2010 to 2011 after having served as a member of the council since 2009. He received a Ph.D. in economics from the Massachusetts Institute of Technology.

Like his predecessor, Evans, Goolsbee is likely to bring a dovish view to Fed rate-setting policy. “Doves” generally stress the need to keep rates low to support hiring and growth, while “hawks” are likelier to favor higher rates to restrain inflation.

Like many economists, Goolsbee initially characterized the current bout of inflation as a temporary one that would likely pass. In response to a survey by the University of Chicago’s Booth Business School, in July 2021, he suggested that the then-elevated unemployment rate of about 7% made it unlikely that high inflation would persist.

Last September, Goolsbee expressed some concern in an interview with the business cable channel CNBC that the Fed might raise rates higher than needed to fight inflation and cause an economic downturn.

He urged the Fed to take a “data dependent” approach to its rate decisions and said, “If the Fed keeps raising rates, that’s been the most common cause of recessions in the history of the United States.”

Last week, on Fox Business, Goolsbee sounded a more cautious note, saying there could be more supply shocks from China’s COVID-19 lockdowns, which would likely keep inflation elevated.

“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,” he said.

As an academic, Goolsbee has pushed to expand the available data on inflation. He worked with the software company Adobe to create an online inflation index. That index showed that online price increases have generally been smaller than those in physical stores.

He cited that data in a column in the New York Times last year that urged the government to measure how inflation affects different income groups. Goolsbee wrote that because higher-income Americans are more likely to shop online and to spend a smaller proportion of their incomes on food and gas, they likely experience a smaller inflation rate than do lower-income Americans.

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              FILE - Charles Evans, president of the Federal Reserve Bank of Chicago, speaks at a conference involving its review of its interest-rate policy strategy and communications on June 4, 2019, in Chicago. Evans is retiring after 15 years as president, with economist Austan Goolsbee, a top economic adviser to President Barack Obama, replacing him next month, the regional Fed branch said Thursday, Dec. 1, 2022. (AP Photo/Kiichiro Sato, File)
            
              FILE - Then-Council of Economic Advisers Chairman under President Barack Obama, Austan Goolsbee, left, testifies on Capitol Hill in Washington on Feb. 28, 2013, before the Joint Economic Committee hearing on state of the U.S. economy. Goolsbee will become president of the Federal Reserve Bank of Chicago next month, the regional Fed branch said Thursday, Dec. 1, 2022, replacing retiring president Charles Evans. (AP Photo/J. Scott Applewhite, File)

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Chicago Fed names ex-Obama adviser Goolsbee as next leader