Chicago Fed’s Austan Goolsbee wants to get back to ‘old school’ economics: Focused on ordinary Americans, mindful of AI hype, and sharp on inflation

Chicago Federal Reserve President and CEO Austan Goolsbee has emphasized the importance of focusing on ordinary Americans and focusing less on speculative predictions about the transformative potential of artificial intelligence (AI). Speaking at a Jackson Hole speech, Goolsbee highlighted that inflation, rather than AI, is currently the primary concern for the Federal Open Market Committee (FOMC), as prices have surpassed the central bank's target of 2%.

While AI has generated significant optimism about job creation and economic growth, Goolsbee remains cautious about the potential for overheating in the economy. He pointed to data center buildouts as a major contributor to this concern, noting that while they may push other sectors down, they could also push up services inflation.

Goolsbee remains comfortable with maintaining the base interest rate at its current level, as recent inflation data has shown some improvement. He remains wary of overreacting to the potential long-term benefits of AI-driven productivity gains, as historical examples of technological advancements often fail to deliver the anticipated results.