The outgoing head of the Federal Reserve Bank of Atlanta pushed back against claims that the central bank has lost public confidence, saying Friday that Americans still believe the institution will stick to its mission despite mounting criticism from Washington.
Raphael Bostic, who steps down at month’s end, told Bloomberg News he remains optimistic his colleagues will continue resisting outside pressure and focus on what’s best for the economy. The remarks come as President Donald Trump and members of his administration have ramped up demands for quicker rate cuts.
“Ultimately, my current, soon to be former, colleagues will have to rise to the moment and do what they think is right, or they won’t,” Bostic said. “And if they don’t, then we’ll see it. But I’m pretty confident, for the people that I know, that they will.”
Public confidence holds despite political attacks
The comments follow sharp criticism from Treasury Secretary Scott Bessent, who told lawmakers Wednesday that the Fed had “lost the trust of the American people.” Trump himself has repeatedly called for the central bank to bring down borrowing costs faster than officials have been willing to move.
But Bostic offered a different take on public sentiment. He pointed to steady inflation expectations even during the recent upheaval as proof that people still trust the Fed to act without bowing to political influence.
“I take that as a signal that the business community and families still have faith in the Federal Reserve, that we’re going to do the things that we’ve been asked to do and charged to do,” he said. “I think our institution has been resilient in the face of a chaotic world.”
The Atlanta Fed president stressed that getting prices under control remains the top priority. He noted inflation has stayed well above the 2% target for nearly two years, calling that trend unacceptable. Even with challenges in the job market, Bostic argued the Fed can’t take its eye off rising costs.
His solution: keep borrowing costs high enough to slow the economy until inflation hits the 2% goal. He warned that expensive goods and the threat of further increases leave many families struggling. This has created what he called a “K-shaped” or “barbell” economy, where households with less money feel especially squeezed.
Labor market faces structural shifts
On the jobs front, Bostic said employers are pulling back on hiring for entry-level positions because artificial intelligence could soon handle those tasks. He also blamed companies for cutting staff after hiring too many people during the pandemic, plus confusion over shifting immigration policies for current labor market troubles.
Getting a clear picture of what’s really happening with employment might take until April or May, he suggested, as officials try to separate temporary disruptions from lasting changes in how the economy works.
Addressing calls for “regime change” from incoming officials like chair-designate Kevin Warsh, Bostic defended the Fed’s approach of making decisions based on economic data. He said the central bank should rely even more on information gathered directly from business leaders, not just government reports.
He also stood by the Fed’s expanded role in watching for risks in the banking system and making sure the economy benefits everyone, saying these duties help achieve maximum employment. While some want to narrow the Fed’s focus, Bostic argued this broader view is necessary.
The retiring Fed official acknowledged that political heat “comes with the territory” but said the institution must stay committed to stable prices and full employment to keep the economy predictable over time. He cautioned that once inflation gets stuck in people’s thinking, it changes how the entire economy operates.
Bostic wrapped up by emphasizing the Fed has a job to do on price stability, regardless of what other players in the financial system might want or need. Different groups may have their own goals and timelines, he said, but the central bank needs to stick to its mandate.
The statements mark one of Bostic’s final defenses of Fed independence as he prepares to leave his post after years navigating criticism from politicians on both sides.
Source: https://www.cryptopolitan.com/bostic-defends-fed/
