Morning Brew Daily How the Fed Evaluates Inflation During a Shutdown, with the Chicago Fed President
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Oct 16, 2025 
Austan Goolsbee, President of the Federal Reserve Bank of Chicago, dives into how the Fed navigates the data blackout caused by the government shutdown. He explains the challenges of interpreting labor signals and the slow hiring landscape attributed to AI. Goolsbee emphasizes the essential independence of the Fed from political pressures, warning how meddling can fuel inflation. Listeners get a rare glimpse into the intricate voting process of FOMC meetings and a lighthearted story about teaching on his wedding day.
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Labor Rates Tell A Truer Story
- Four labor rates (unemployment, vacancy, hiring, layoff) reveal deeper cycle signals than headline payrolls.
- Currently hiring looks like recession while layoffs look like boom, creating a mixed picture.
AI Is A Factor, Not The Main Story
- Goolsbee thinks AI has influenced some sectors but is not the main driver of nationwide labor weakness.
- He notes computer science grads face more unemployment, yet their overall rates remain low.
Low Hire, Low Fire Labor Market
- Goolsbee describes the labor market as "low hire, low fire" with unusually low turnover.
- He suggests businesses hire less but also avoid layoffs, reflecting high uncertainty and labor frictions.