Trading Secrets, Episode 280

Austan Goolsbee: Chicago Fed President on Inflation, Interest Rates & the Real State of the U.S. Economy

Release Date: March 2, 2026
Host: Jason Tartick
Featured Guest: Austan Goolsbee, President & CEO, Federal Reserve Bank of Chicago

Episode Overview

In this timely and highly anticipated episode of Trading Secrets, Jason Tartick sits down with Austan Goolsbee—President and CEO of the Federal Reserve Bank of Chicago and an influential voice in American economics. Goolsbee shares candid insights into his journey from academia to central banking, demystifies the Fed’s role in the U.S. economy, discusses policy decision-making under uncertainty, and tackles current issues like inflation, interest rates, housing affordability, and the “real” state of the economy. The conversation blends accessible explanations with deep expertise—perfect for finance buffs and casual listeners alike.

Key Discussion Points & Insights

1. Austan Goolsbee’s Career & Early Lessons

• Reflecting on the Journey (07:23)
  • Goolsbee looks back at his 21-year-old self, noting he was probably “insufferable” and too narrowly focused on economics.
  • Advice to his younger self: “Go, go travel around, go see stuff, go do some things that are not economics.”
    (08:38)
  • Memorable encounter with Nobel Prize winner James Tobin, who observed that most people regretted not having more fun—or not working hard enough.

  “The number one answer was, do less, aim lower. … The number two answer was, work harder, aim higher. … They seemed ancient, they haven’t got it figured out.”
  — Austan Goolsbee (09:03)

2. Entering the World of Policy & Decision-Making at the White House

• How Goolsbee Ended Up Advising President Obama (10:06)

  • Developed relationship with Barack Obama as fellow professors at University of Chicago; started as “the guy from the birthday parties.”
  • First-hand involvement during the 2008 financial crisis.
  • Contrast between academic and policy work:

    “In academics the standard of evidence is this high and the time pressure is this low. And in Washington, it’s completely the opposite.”
    — Austan Goolsbee (11:58)

• Decision-Making Under Pressure (13:32)

  • Importance of gathering information quickly and consulting diverse experts, even if it means challenging hierarchy.
  • Inspiration from history: English “command and control” vs. flatter Nordic models—flatter models often performed better in crises.
  • Fed is intentionally designed as a committee to avoid D.C.-centric or Wall Street-centric control, bringing in regional perspectives.

  “Bringing in your own personal board of directors… just getting different viewpoints because you might make a mistake.”
  — Austan Goolsbee (16:35)

3. Personal Financial Impact of the Crisis

• Goolsbee reveals he personally struggled with housing during the 2008 crisis—owning a house he couldn't sell while renting in D.C.
  (17:30)

  “Somebody described, they were like, cool, but you’re a one man walking housing crisis.”
  — Austan Goolsbee (17:53)

• On the human impact of economic policy:

  “Economics is not a game. Yes, it’s intellectually interesting, but this affects people’s real lives.”
  — James Tobin, quoted by Goolsbee (18:59)

4. The Federal Reserve 101: What It Is & What It Does

• Role and Structure of the Fed (27:16)

  • Created in 1913 for economic stabilization after the panic of 1907.
  • Mandate: Stabilize prices & maximize employment (“the dual mandate”).

    “There’s nothing in that that says make sure the stock market is happy… The Fed’s job is that dual mandate.”
    — Austan Goolsbee (28:37)

  • Regional Fed banks (like Chicago) provide local perspective and operational support (e.g., maintaining the cash vault, running payment systems).

• Public Misconceptions (36:01)

  “80 something percent of people said they did not know what the Federal Reserve [is]. But 2/3 of people thought they were doing a bad job.”
  — Austan Goolsbee (36:09)

  • The Fed doesn't directly set mortgage rates and has less control over the economy than the public often assumes.

• Community Involvement (38:41)

  • Chicago Fed engages locally (parades, partnerships with local businesses, addressing elder financial exploitation).
  • Relates to real community issues: maximizing employment, addressing affordable housing, fighting financial abuse.

5. Setting Policy Amid Conflicting Data

• The Unique Moment: All-Time High Markets & Economic Uncertainty
  (41:35)

  • Prepares for Federal Open Market Committee (FOMC) meetings with extensive input from economists.
  • Rejects simple “hawk” or “dove” labels:

    “I said, I don’t even know if I like birds. … All I’ve ever wanted to be is one of the data dogs.”
    — Austan Goolsbee (42:05)

  • Normally, inflation and employment move oppositely in the business cycle, but recent years have seen both challenging at once.
  • U.S. consumer spending is still strong despite negative “vibes.”

  “The unsung hero of the US economy… is the bread and butter US consumer.”
  — Austan Goolsbee (44:24)

  • Rates “can still go down a fair bit more from where they are today” if inflation keeps trending to 2%. But caution is needed.

• Inflation: Public Perception vs. Fed Metrics (47:31)

  • Fed focuses on “core inflation” (excluding food and energy) due to volatility in those prices, which sometimes irritates the public.

  “The Fed can’t get into the vibes business too deep because the law tells us we’re supposed to look at the actual numbers.”
  — Austan Goolsbee (48:17)

  • Consumer sentiment—once a leading indicator for spending—now less predictive.

6. The Housing Market & Affordability

• Housing Cost Dynamics (53:39)

  • Housing prices have risen much faster than the cost of goods for decades.
  • Lack of new supply a major factor—making homes more expensive, especially for first-time buyers.
  • Relative price of housing has compounded at 5% a year for 20 years.

  “My worries are… did the door just get slammed in the face of the next generation?”
  — Austan Goolsbee (57:13)

• Old Benchmark & Today’s Reality (56:56)

  • The old threshold was that housing costs above 31% of income put you at risk of foreclosure; today, that number is probably higher, but the crisis is about accessibility for young people, not just foreclosure risk.

7. Long-Term Investing & The Trading Secret

• Warren Buffett’s Perspective (59:08 & 59:30)
  • The ultimate secret: “You can never beat the market… Just, just try not to look at it. … If you have money, invest it and don’t get stressed out about it.”
  • Buffett’s quiz on the Dow going from 50 (in 1900) to 50,000 (in 2026) even after all imaginable disasters:

    “The ultimate trading secret is that the human ingenuity has proved unbounded. And American innovation, that is what made us rich.”
    — Austan Goolsbee (60:54)

Notable Quotes & Memorable Moments

• On Obama’s Temperament as a Leader:

  “He was even keel and he was very thoughtful… but he had something about him that could inspire people.”
  — Austan Goolsbee (24:00)

• On Misconceptions of the Fed:

  “Some people hear Federal Reserve and they think it’s something about land management.”
  — Austan Goolsbee (36:25)

• Personal Anecdote (Humor):

  “We took a poll in this entire campaign whose wife is the most out of his league. And you won.”
  — Austan Goolsbee (22:00)

• On Data, Perception, and Inflation:

  “We can’t ignore inflation by any means. I think there’s still a danger.”
  — Austan Goolsbee (46:20)

Timestamps for Key Segments

| Topic | Guest/Host | Timestamp (MM:SS) | |-----------|----------------|----------------------| | Goolsbee’s career reflections | Austan Goolsbee | 07:47-09:03 | | Obama administration anecdote | Austan Goolsbee | 10:06-13:02 | | Policy decision processes | Austan Goolsbee | 13:32-17:19 | | Personal housing struggle, 2008 | Austan Goolsbee | 17:30-19:43 | | What is the Federal Reserve? | Austan Goolsbee | 27:16-31:57 | | Biggest misconceptions about the Fed | Austan Goolsbee | 36:01-38:23 | | Policy considerations, inflation/markets | Austan Goolsbee | 41:35-46:23 | | The housing market dilemma | Austan Goolsbee | 53:39-57:13 | | Trading secret—long-term investing | Austan Goolsbee | 59:08-61:30 |

Takeaways & Practical Advice

• Decision-Making: Create your own “board of directors”—seek diverse perspectives to offset blind spots and improve choices, whether in business, career, or finances.
• Understand the Fed: The Federal Reserve’s mandate is economic stabilization—focused on inflation and employment, not the stock market or political approval.
• Don’t Try to Outguess the Market: Adopt a long-term, steady investment approach; history shows human innovation drives markets upward, despite crises.
• Housing Reality: Expect continued housing affordability issues unless more supply comes online; this especially impacts first-time buyers.
• Navigating Perceptions: Inflation feels worse than the data sometimes shows—look at real wage growth relative to prices and recognize shifts in the broader economic landscape.

Episode Wrap-Up

This episode serves as an accessible yet in-depth primer on the Federal Reserve, offering relatable stories, humor, and actionable lessons. Austan Goolsbee succeeds at breaking down complex matters for listeners of all backgrounds, and his parting “trading secret” underscores the power of long-term market participation and faith in continued economic progress.

To learn more:

• Visit the Chicago Fed website for educational resources and updates.
• Follow Austan Goolsbee on Twitter (with a caveat—he jokes that the Fed is “nervous” about it).

Standout Quote

“The ultimate trading secret is that the human ingenuity has proved unbounded. And American innovation, that is what made us rich… In the end, it’s going to be fine. You want to attach yourself as a trader, not to the business of trading… it’s not gambling, just be in it for the long term.”
— Austan Goolsbee (59:30-60:54)

Next up: Amanda Batula and the return of JTA!
For more actionable financial insights, stay tuned to Trading Secrets.