Austan Goolsbee Warns U.S. Economy Is Overheating

Chicago Federal Reserve President Austan Goolsbee warned that the United States economy is overheating, noting that inflation remains high and the 2% target is more distant than it was a year ago. Speaking at Jackson Hole, Goolsbee identified a stagnant labor market and GDP growth driven primarily by artificial intelligence and data center expansion as signs of instability.

Goolsbee highlighted the uncertainty facing central bankers regarding the necessary actions to cool the economy and warned that another economic shock could be imminent. He expressed skepticism toward r-star metrics and voiced support for reducing forward guidance.

To address these challenges, Goolsbee discussed the role of new Federal Reserve task forces designed to shape the central bank's reaction function and determine the most effective ways to stabilize the economy.