Bloomberg Talks: Atlanta Fed President Raphael Bostic Talks Inflation, Jerome Powell

Date: February 6, 2026
Host: Michael McKee (Bloomberg)
Guest: Raphael Bostic (President, Atlanta Federal Reserve, retiring Feb 2026)

Episode Overview

This episode features an in-depth interview with Raphael Bostic, President of the Atlanta Federal Reserve, as he approaches his retirement. The conversation, led by Michael McKee, explores Bostic’s perspective on the economy’s current state, persistent inflation, labor market turbulence, internal debates within the Fed, and the legacy of Chair Jerome Powell. Bostic also shares candid responses to criticisms regarding Fed policies, inclusivity in economic growth, and potential regime changes ahead.

Key Discussion Points & Insights

1. Economic Sentiment in the Southeast (01:33–03:17)

• Current Mood:

  • Businesses and consumers display “cautious optimism” after adapting to recent economic shocks, particularly high tariffs announced in April 2025.

  • Many are unsure if best-case scenarios are possible, but most no longer fear the worst.

    "The sentiment is one of cautious optimism. But I put emphasis on the cautious as opposed to the optimism." — Raphael Bostic (01:47)

• Looking Forward:

  • Expectations are for a continuation of 2nd half of 2025 trends into 2026, with some upside potential as tax bill stimulants take hold and tariff effects wear off.

2. Labor Market & Inflation Outlook (03:17–05:00)

• Recent Bad Jobs Data:

  • Despite worrisome employment releases, Bostic is not inclined to push for Fed rate cuts prematurely.

    “We’ve been in a situation where inflation has been too high for too long…that's not acceptable.” — Raphael Bostic (03:32)

• Structural Labor Issues:

  • Hesitation in entry-level hiring due to automation and pandemic-era labor overhang.
  • Immigration changes could shift the long-run rate of job creation.

• Data Gaps:

  • Significant real-time data issues.

    “It'll be April or May before we start to be able to draw clear signals from the data to really understand what's going on.” — Raphael Bostic (04:50)

3. Lessons from a Fed Career: Complexity & K-shaped Recovery (05:00–06:56)

• Economy Is Vast & Nuanced:

  • Direct engagement is vital to understand people’s experiences and the drivers of their decisions.

• Inflation Mindset:

  “Once inflation gets entrenched in people’s minds, it changes how the economy evolves… we need to keep our policy in a restrictive posture so that we get inflation back to 2%. That's paramount.” — Raphael Bostic (05:14)

• K-shaped/Barbell Economy:

  • Economic divergence was a concern before the pandemic (“barbell economy”).

  • Many families remain precarious, leading to low consumer confidence.

    “There are a lot of families that are precarious and are feeling very uncertain about their prospects for the future and their prospects for their children for that matter.” — Raphael Bostic (06:16)

4. Public Confidence in the Fed (06:56–07:37)

• Perception in the District:

  • Bostic rejects accusations (from Treasury Sec. Bessant) that the Fed has lost public trust.

    “People tell me we’re grateful for what you’re doing. You have a very hard job and we want you to be as data dependent and as open to information so you can make the best judgment that you, that you can.” — Raphael Bostic (07:09)

5. Inclusivity, “Wokeness” Critique, and Fed Mandates (07:37–08:55)

• On Whether Fed Was ‘Too Woke’:

  • Focus on inclusive employment is, in Bostic’s view, necessary for achieving maximum employment.

    “If we’re not mindful about the ways that the economy is not working for people, then our maximum employment outcome is going to be lower than it can be…that is exactly the thing that the Federal Reserve needs to be doing.” — Raphael Bostic (07:58)

• Market vs. Fed Projections:

  • Bostic points out that market outlooks have at times been more extreme than the Fed’s.

6. Regime Change and Future Direction (08:55–11:24)

• Chair-Designate Kevin Warsh’s Call for ‘Regime Change’:

  • Bostic: “I have no idea. You’re going to have to ask him what that means.”
  • Defends being data-dependent and increasing business engagement.

• “Mission Creep” Criticism:

  • Bostic pushes back, saying risk conversations with banks are appropriate; the Fed doesn’t dictate lending decisions.

    “I actually don’t even see the mission creep argument...we are asking prudent questions to make sure that financial sector business leaders are aware of trends that could be introducing risk.” — Raphael Bostic (09:44)

• Balance Sheet and QE:

  • Warsh wants to end QE, shrink the balance sheet, return to scarce reserves.

  • Bostic says it’s possible, but cautions about increased volatility and stresses the need for liquidity.

    “So much of what we’ve done is just to make sure there’s liquidity in the marketplace. And that liquidity is actually important to make sure that consumers and businesses are not worrying…” — Raphael Bostic (11:04)

7. Jay Powell’s Legacy & Independence of the Fed (11:24–12:38)

• On Powell’s Tenure:

  “Jay has been great. He’s a colleague. I consider him a friend. Very open and very transparent… I think his legacy will be quite positive.” — Raphael Bostic (11:28)

• On Fed’s Independence:

  • The Fed must stick to its dual mandate, regardless of political pressures:

    “It is essential that the Fed perform its duty, mindful to its charge… Even when people with different horizons and different objectives… have their views about what we want to do.” — Raphael Bostic (12:03)

8. Ethics, Rulemaking, and Transparency (12:38–13:36)

• Questioned About Ethics Issues:

  • Bostic admits to previous reporting mistakes, welcomed IG validation of his intent.

  • Calls for “clear rules and bright lines” for public servants to follow.

    “I thought I was doing the right thing and I found out that I wasn’t… I want to make sure that no one goes through that at all.” — Raphael Bostic (12:50)

9. On Trump, Powell and the Future of the Fed (13:36–14:36)

• Message to Trump About Jay Powell:

  “Jay’s trying to do the best that he can. He’s a smart man, he understands markets, and if you want him to succeed, you should let him succeed.” — Raphael Bostic (13:44)

• Is the Fed Under Threat?:

  • Bostic doesn’t see existential risk, frames current political scrutiny as part of the job.

    “My whole time here...there have been people who thought the Fed should do other things and talked about that and called them out. This is another one of those times…we need to be solid and resolute to stay focused on what we’ve been asked to do.” — Raphael Bostic (14:00)

Notable Quotes

• On the K-shape of the Economy:
  "There are a lot of families that are precarious and are feeling very uncertain about their prospects for the future and their prospects for their children for that matter." — Raphael Bostic (06:16)

• On Data and Adaptability:
  “It’ll be April or May before we start to be able to draw clear signals from the data to really understand what’s going on.” — Raphael Bostic (04:50)

• On the Importance of Fed Independence:
  “It is essential that the Fed perform its duty, mindful to its charge…to create long term stability and predictability in the US Economy.” — Raphael Bostic (12:03)

• On Legacy and Succession:
  "Jay's trying to do the best that he can. He's a smart man, he understands markets, and if you want him to succeed, you should let him succeed." — Raphael Bostic (13:44)

Timestamps for Key Segments

• 01:33 – Sentiment among businesses and households
• 03:32 – No urgency to pause Fed tightening despite jobs data
• 05:14 – Reflections on economic complexity and inflation
• 06:11 – K-shaped economy & inequality
• 07:09 – Public trust in the Fed
• 07:58 – Responding to criticism on “inclusive employment”
• 09:01 – On “regime change” and future Fed policy
• 09:44 – Mission creep and relationship with banks
• 10:43 – QE, balance sheet, and liquidity
• 11:28 – Jay Powell’s leadership
• 12:03 – Fed independence and legal scrutiny
• 12:50 – On ethics missteps and rule clarity
• 13:44 – Advice to Trump about Powell
• 14:00 – Political threats to Fed independence

Takeaway

Raphael Bostic leaves the Atlanta Fed with an emphasis on resilience, data-driven policy, and protecting public trust. He advocates an inclusive economic approach, stresses the need for flexible and forward-looking data use, defends the institution's integrity, and underlines the enduring necessity of central bank independence amid political change. The episode offers unique insight into how a top Fed official frames the past, present, and future challenges facing monetary policy in the U.S.