The Federal Reserve has been grappling with a delicate balancing act during the pandemic, as state economies, businesses and workers have struggled with high unemployment and inflation. In an attempt to address these challenges, the Fed has increased interest rates multiple times. Although these actions have resulted in nearly 50-year high employment levels and prevented a recession, Fed Chair Jerome Powell believes that the economy still has a long way to go.
Meanwhile, Raphael Bostic, the president and CEO of the Federal Reserve Bank of Atlanta, asserts that the economy was robust prior to the pandemic and is gradually recovering. During a recent interview on “Closer Look,” Bostic discussed inflation, interest rates and the economic progress being made in the southeastern U.S. He also shared his economic forecast for 2024 and acknowledged that the economy performed better in 2023 than he originally anticipated.
Bostic highlighted that while inflation remains a concern for many Americans, it is important to note that it is not necessarily indicative of an overheating economy. Instead, he suggests that it could be seen as a sign of supply chain disruptions caused by the pandemic. Additionally, Bostic believes that while interest rates may continue to rise in order to combat inflationary pressures, they will likely do so at a slower pace than many anticipate.
Overall, both Powell and Bostic believe that while progress has been made in addressing some of the challenges posed by the pandemic, there is still much work to be done in order to fully recover from its impact on state economies and businesses across America.