Podcast Summary: Bloomberg Talks — "Austin Goolsbee Talks Inflation Risk, Tariffs, Powell"

Date: February 24, 2026
Host: Bloomberg
Guest: Austan Goolsbee, President of the Chicago Fed

Main Theme & Purpose

This episode features a timely conversation with Austan Goolsbee, President of the Chicago Federal Reserve, centering on the current state and future outlook of the U.S. economy. Discussions focus on inflation concerns, the impact of tariffs, policy uncertainties, labor market dynamics, Federal Reserve leadership changes, and the challenges facing monetary policy in 2026.

Key Discussion Points & Insights

Inflation Takes Center Stage

• Primary Concern: Goolsbee identifies persistent inflation as the central economic risk, even as labor markets and growth appear stable.

  • "Inflation's ... never gone away as a central focus. ... I’m not hawkish about rates. I’m pretty optimistic that we can get rates down further — multiple cuts in 2026 — as long as we see the progress on inflation." (01:44)

• Inflation Target Slippage: The host notes, and Goolsbee concurs, that Fed forecasts continually push the return to the 2% inflation target further into the future.

  • "Every time you put out a summary of economic projections ... the 2% target gets hit two years from now. The next, it's two years from now." (03:02)

• Tariff Impact: Tariff-related inflation was supposed to be transitory. Goolsbee stresses the need for actual progress towards the inflation target rather than just rhetorical confidence.

  • "If the tariff inflation is transitory, it’s supposed to start going away. ... We must get inflation down from this 3% level that we’ve been stalled out at for now, a year or more." (03:08–04:40)

Policy Uncertainty and Labor Market Effects

• Uncertainty Weighs on Decisions: Ongoing legal and policy shifts — especially around tariffs and trade — fuel business caution, especially in hiring.

  • "The thing to remember about the tariffs, even if the tariffs stay exactly as they were ... the inflation impact is supposed to go away." (05:14)
  • "Low hiring with high layoffs, that's what the beginning of a recession looks like. For both of those to be low is a bit of a weird duck ... explained by a lot of 'we want to wait and see what's going to happen.'" (05:14–06:40)

• CEO Sentiment: Businesses, notably in auto manufacturing (a key Chicago Fed district industry), want regulatory clarity before making hiring decisions.

  • "What they tend to say is we want to know what the rules of the road are going to be. And right now, we don't know ..." (06:47)

Sector-Specific Labor Trends

• Diverse Outlooks: Labor demand varies by industry.
  • Tech firms face AI-driven uncertainty about staffing; healthcare is booming and still hiring robustly.
  • "If you talk to software companies ... the only uncertainty is, should we not hire, or should we actually let people go? But if you look in the health care sector—it’s a booming sector. Employment continues to expand ..." (08:36)

Productivity, AI, and Inflation

• Optimism and Caution: The new incoming Fed chair, Kevin Warsh, is bullish on AI-driven productivity increases taming inflation. Goolsbee is more circumspect.
  • "Productivity growth is the thing that makes us rich ... It can be deflationary. At the same time ... people counting on future productivity growth can overheat the economy just in the near term." (09:37)
  • "I mostly agree [with Warsh], but ... we just got to think about some of those [secondary] issues." (10:32)

Federal Reserve Forecasting and Policy Regimes

• Summary of Economic Projections: Goolsbee admits current levels of economic uncertainty make confident forecasting difficult.

  • "There’s a lot of uncertainty and we have to make decisions with the data we have. ... I take my own views and that of my staff with a heavy grain of salt." (11:16)

• Monetary Policy Debate: The possibility of reverting to a "scarce reserves" model for monetary policy management is discussed.

  • "We should constantly be evaluating as a body what we’re doing and the efficacy ... We switched out ... to what we do now because in crisis there were some holes in a scarce reserves regime." (12:29)

Fed Leadership & Succession

• Jay Powell’s Legacy: Goolsbee is a strong supporter of Fed Chair Jay Powell as his term nears its end.
  • "I’ve said unapologetically, I think Jay Powell is a first ballot hall of fame Fed chair and, and I’m a big supporter of his." (13:46)
  • "I like him being around, for sure." (14:20)

Notable Quotes & Memorable Moments

• On Inflation’s Stubbornness:

  • “We must get inflation down from this 3% level that we’ve been stalled out at for now, a year or more.” — Austan Goolsbee (04:28)

• On Policy Uncertainty:

  • “...the low hiring, low firing environment is what you would expect when there’s a lot of uncertainty. That’s not really what the beginning of a recession looks like. For both of those to be low is a bit of a weird duck.” — Austan Goolsbee (06:00)

• AI & Productivity:

  • “Productivity growth is the thing that makes us rich. ... It can be deflationary. At the same time, people counting on future productivity growth can overheat the economy just in the near term.” — Austan Goolsbee (09:40)

• On Jay Powell:

  • “I’ve said unapologetically, I think Jay Powell is a first ballot hall of fame Fed chair and, and I’m a big supporter of his.” — Austan Goolsbee (13:46)

• Humorous Local Touch:

  • "Wherever they build a stadium, they better be called the Chicago Bears. But where the public financing, that's out of the Fed's lane." — Austan Goolsbee (14:55)

Timestamps for Important Segments

• 01:14 – Inflation as the Fed’s top concern
• 03:07 – The problem with forecasts and the moving 2% target
• 05:14 – Tariffs, Supreme Court uncertainty, and labor trends
• 06:47 – CEO perspectives on policy uncertainty
• 08:36 – Industry-specific labor market trends (AI, tech, healthcare)
• 09:37 – AI, productivity, and potential impacts on inflation
• 10:55 – Challenges with Fed forecasting amidst uncertainty
• 12:29 – Discussion on possible return to “scarce reserves” regime
• 13:46 – Goolsbee’s views on Fed leadership succession and Powell
• 14:55 – Quick take on the Chicago Bears’ stadium debate

Tone and Language

Throughout, the conversation is candid, accessible, and policy-focused, with Goolsbee balancing a tone of empirical caution and optimism. He repeatedly emphasizes the importance of data, the unusual nature of the current economic moment, and his respect for both current and incoming Fed leadership.

This summary provides a comprehensive guide to the episode for listeners interested in central bank strategy, current economic challenges, and the leadership direction of the Federal Reserve in 2026, all in the original, conversational style of the speakers.