Chicago Fed Chair Goolsbee Agrees With Bessent: 'Fed Independence Is A Jewel Box,' Awaits Tariff Revisit Before 'Jumping To Action'

Chicago Federal Reserve President Austan Goolsbee has underlined the need to wait for policy action on tariffs before jumping to any “action,” while agreeing with Treasury Secretary Scott Bessent‘s comments on the central bank’s independence being like a “jewel box” that needs to be preserved.

What Happened: Goolsbee, while talking about preemptive rate cuts on CNBC, reaffirmed Federal Reserve Chairman Jerome Powell‘s stance on waiting for further policy before altering the path of the monetary policy.

“We’re getting retaliation announced, we’re talking about revisiting the tariffs in 90 days, and we don’t know what the impact on the supply chain is going to be. So I think we want to be a little more the steady hand and trying to figure out the through line before we’re jumping to action,” said Goolsbee.

President Donald Trump called for preemptive rate cuts in a Truth Social post on Monday and heavily criticized Jerome Powell, calling him “Mr. Too Late”.

Meanwhile, his cabinet also hinted at ways to fire Powell from his position as the Fed Chair. Last week on Friday, economic adviser Kevin Hassett told the reporters at the White House that Trump and his team would “continue to study” whether Powell could be fired.

However, Bessent told Bloomberg Television last week that Fed independence in deciding on monetary policy was a “jewel box that has got to be preserved.” –

Agreeing with Bessent, Goolsbee said, “I agree with the Secretary of the Treasury when he said Fed independence is a jewel box that we don’t want to mess with.”

“I’ve been at the Fed for a little over two years. Before I was ever at the Fed, I would tell you that economists are basically unanimous that Fed independence is critically important. And to see why, just look at the countries where they don’t have Fed independence. Inflation is higher, unemployment is higher, growth is worse,” he added.

See Also: Tom Lee Urges Bessent And Lutnick To ‘Put Points On The Board’ For A ‘Positive Policy Shock’ To The Stock Market

Why It Matters: This comes after Powell hinted at no sign of a ‘Fed put’ in the near term. He said, “For the time being, we are well-positioned to wait for greater clarity before considering any adjustments to our policy stance,” said Powell at the Economic Club of Chicago, Chicago, Illinois, on April 16.

Fed should be “following its legal mandate, stabilize prices, maximize employment, and it is the conditions that determine what Fed actions are right or not,” said Goolsbee.

“The difficult part of a scenario for a central bank is if both sides of the mandate start going wrong at the same time.”

Price Action: Trump’s Truth Social post about Powell triggered a selloff on Monday as the S&P 500 index tracked by SPDR S&P 500 ETF Trust SPY fell 2.36% and the Nasdaq 100 tracked by Invesco QQQ Trust, Series 1 QQQ slipped 2.46%.

After Monday’s close, the Nasdaq 100 was down 19.86% from its all-time high of 22,222.61 points. The S&P 500 index was 16.09% lower than its previous record of 6,147.43 points, and the Dow Jones was 18.09% below its 52-week high of 45,073.63 points.

In pre-market on Tuesday, the SPY was up 0.89% and the QQQ advanced 0.91%.

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