Chicago Federal Reserve President Austan Goolsbee said new U.S. import levies represent a “stagflationary shock,” warning that higher tariffs risk both slowing growth and lifting prices by undermining productivity gains. Goolsbee told a monetary-policy forum in Springfield, Illinois, that he is uneasy with the view that tariffs will deliver only a one-off bump to prices. Citing fresh duties on items such as semiconductors, he cautioned that the inflation impulse could prove persistent, and said rising consumer-price components not linked to tariffs would be an even bigger concern. On employment, the Chicago Fed chief noted that recently subdued payroll gains may stem from slower population growth and shifts in immigration rather than a broadening economic downturn. He described labor conditions as "pretty solid" overall but flagged pockets of weakness that the central bank is monitoring closely. A material deterioration, he added, would argue for lowering interest rates. Policy deliberations this autumn will be “live,” Goolsbee said, with no advance commitment on the path of rates. The Federal Open Market Committee needs several consecutive months of benign inflation before contemplating cuts, yet could ease pre-emptively if officials are convinced that price growth is moving sustainably toward the 2% target. Conversely, the Fed “will have to act” if inflation re-accelerates. Goolsbee also reaffirmed that maintaining the Fed’s independence from political interference is essential to preventing a resurgence of inflation and preserving credibility with investors and the public.