If you still think the people running America’s central bank understand inflation and interest rates, think again.

A prime example is Chicago Federal Reserve Bank President Austan Goolsbee, who was wrong about inflation and is now wrong about interest rates and a soft landing for the economy. He is an ideologue clearly undeterred by facts—a scary reality for someone who helps control the money supply.

Mr. Goolsbee, a perpetual cheerleader for the Biden administration, was a staunch supporter of the narrative that inflation was transitory, even as it accelerated month after month throughout 2021 and for the first half of 2022. The facts were immaterial because they contradicted the administration’s narrative. Mr. Goolsbee helped deliver a political talking point and inflation by pushing for low interest rates.

After being so wrong about inflation’s staying power, he persists in his misconceptions by insisting that inflation is trending to the 2 percent target of the Federal Reserve. Nothing could be further from the truth. Inflation peaked in June 2022 and has indeed been trending down, but it has yet to fall below 3.1 percent. In fact, it has accelerated the last two months.

>>> Time To End the Fed and Its Mismanagement of Our Economy

Furthermore, if Mr. Goolsbee had merely paid attention to the monthly inflation data since June 2022, he would’ve seen that the average monthly inflation rate corresponds with an annual inflation rate over 3 percent. That means the economy was never trending toward 2 percent as he so frequently claimed. The data were there, but he blatantly ignored it.

These elevated inflation numbers aren’t surprising, given today’s multi-trillion-dollar federal deficits. But Mr. Goolsbee would never admit to that reality, given his devotion to ever-increasing levels of government spending. Instead, the Chicago Fed president remains perplexed regarding the basic functioning of supply and demand in determining interest rates.

Many people—including Mr. Goolsbee, apparently—don’t think of interest rates as a price, but that’s what they are: the price of loanable funds. Savers and borrowers come together and agree on a price that the borrower will pay the saver in exchange for the temporary use of the saver’s money.

Like any price, this one is determined by the basic interactions of supply and demand. When there are more savers, the supply increases and price decreases. When there are more borrowers, the demand increases and price increases.

What’s happening today, courtesy of the trillions of dollars in excess government spending encouraged by Mr. Goolsbee, is an unprecedented increase in demand for loanable funds. The sheer volume of borrowing by the Treasury has increased demand to such an extent that interest rates have risen to the highest level in 15 years and are poised to go even higher.

Yet Mr. Goolsbee is puzzled by the rise in long-term interest rates, as if he’s surprised that the laws of basic economics still hold true, no matter what your political ideology.

>>> The Rate Hikes Will Continue Until Government Spending Improves

Rates will continue to rise as long as the Treasury maintains its unsustainable trajectory of borrowing. Earlier this month, the Treasury had to borrow $275 billion—in just one day.

That single-day surge was more than all the borrowing from the previous month and 13 percent of all borrowing in the last fiscal year. The Treasury has borrowed over $2 trillion just since the debt ceiling was suspended in June; of course this will push up interest rates. It’s disturbing that a Ph.D. economist would not understand such a basic concept from Econ 101.

With people like Mr. Goolsbee at the controls, it’s no wonder that the Fed has managed to orchestrate 40-year-high inflation, a banking crisis, a frozen housing market, and de-dollarization abroad.

The engineers on this train either have no idea what they’re doing or they’re trying to crash it on purpose. It’s unclear which is the case, so severe is the incompetence of Mr. Goolsbee and others at the Fed.