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Odd Lots · August 28, 2026 · 46m

Austan Goolsbee Is Worried the Economy Is Overheating

Austan Goolsbee
Show Notes

Chicago Fed President Austan Goolsbee joins Odd Lots to discuss his concerns about the US economy overheating. He explains why inflation remains stubbornly above the Fed's 2% target, the puzzling state of the labor market with low churn, and how AI-driven growth is dominating GDP. Goolsbee shares his skepticism of traditional metrics like r*, his support for Kevin Warsh's approach to forward guidance, and the intense uncertainty central bankers face in trying to cool the economy.

This summary was generated from show notes and public descriptions, not from a full transcript review. Details may contain inaccuracies.

Highlights

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Stalled Inflation Progress
Goolsbee notes that inflation remains high and the Fed's 2% target is actually farther away than it was a year ago, indicating the economy may be overheating.
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Strange Labor Market Dynamics
The labor market is sending mixed signals: GDP is growing, but both hiring and firing remain unusually low, a pattern Goolsbee finds puzzling.
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AI-Driven GDP Growth
Goolsbee points out that much of the recent GDP growth appears to be driven by AI and data center construction, not broad-based economic expansion.
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Skepticism of the Neutral Rate and Forward Guidance
Goolsbee expresses doubt about the usefulness of metrics like r* (the neutral rate of interest) and supports cutting back on forward guidance, aligning with former Fed governor Kevin Warsh’s view.
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Misc

✧Recorded at the Jackson Hole Economic Symposium.
✧Goolsbee voices support for Kevin Warsh's philosophy on reducing forward guidance.
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