FILE PHOTO: Federal Reserve Bank of Atlanta President Raphael Bostic participates in a panel discussion at the American Economic Association/Allied Social Science Association (ASSA) 2019 meeting in Atlanta, Georgia, U.S., January 4, 2019. REUTERS/Christopher Aluka Berry
UPDATED 1:21 PM PT – Monday, May 17, 2021
In an interview with CNBC on Monday, Atlanta Federal Reserve Bank President Raphael Bostic said it is essential the central bank maintains its current policy until substantial progress is made on the labor market recovery.
Bostic said the U.S. economy is still eight million jobs short of where it was pre-pandemic. Yet, he downplayed recent evidence of high inflation. Instead, Bostic stated the rising prices are actually a sign of a strengthening economy.
“I actually think that having a healthy level of inflation is a sign that the economy is healthy, the economy is going to be dynamic and growing and that should translate into jobs for the people, who everyone is concerned about at the lower end of the wage distribution,” he said.
An American flag flies over the Federal Reserve building, Tuesday, May 4, 2021, in Washington. (AP Photo/Patrick Semansky)
The Fed has vowed to keep interest rates near zero and are continuing to buy at least $120 billion worth of monthly asset purchases until the labor market returns to pre-pandemic employment levels. Bostic announced that it will take at least until the fall to understand inflation dynamics, stating that it depends on how rapidly we recover.