Raphael Bostic
President and Chief Executive Officer
Federal Reserve Bank of Atlanta
June 3, 2025
Key Points
As I write in late May, the macroeconomic picture in important respects remains unchanged from earlier this year. In this quarterly message, I'll offer a window into my thinking on the implications of this for the macroeconomy and monetary policy. Then, as this will be my last essay before the final phase of the Federal Reserve's monetary policy framework review, I will share a few thoughts on that important exercise.
Starting with the broadest measure of economic activity, gross domestic product (GDP) had been generally strong before contracting in the first quarter. A shrinking economy is obviously unwelcome. But the data were distorted by the trade tensions, as many businesses rushed to import goods before import taxes were scheduled to take effect. Imports count against domestic economic activity in the GDP calculations, and so that development reduced economic activity.
The Federal Reserve has a dual mandate from Congress to strive for sustainable maximum employment and price stability. As for the first objective, the labor market still appears broadly healthy. Layoffs and unemployment remain at low levels, and there are no glaring signs of serious labor market deterioration. There are some indications of potential weakness, however. For example, data show it's taking job seekers longer to find work. But, so far, these signs have had limited influence on aggregate labor market outcomes.
On the other side of the mandate, inflation has fallen substantially from peaks in mid-2022. But progress in lowering price increases mostly stalled in the early months of 2025 and the 12-month inflation rate, as gauged by the personal consumption expenditures price index, remains somewhat above our 2 percent objective. As of April, we had not yet seen clear signs of tariffs boosting inflation, though research by economists, including ours here at the Atlanta Fed, suggests we might see upward pressure on prices over the coming weeks.
That's a quick summary of what we know. Much remains unknown.
Trade policy is one wildcard. The picture is unsettled right now, with large tariffs applied to some countries and sectors, and potentially larger and broader tariffs looming at the end of cooling-off periods. The way things ultimately play out on this front will likely depend on the eventual shape of tariff policy, and on how firms and consumers react to additional costs and ongoing uncertainty. If most of the import taxes are short-lived and lead to agreements that lower tariff levels among trading partners, then inflationary pressures may subside. If elevated import levies persist, then the opposite will probably happen.
There have been some shorter-run responses as this transition proceeds. Surveys and our staff's one-on-one interviews with business leaders across the Southeast found sentiment turning increasingly negative in the spring. The prospect of potentially higher costs has led many business leaders to pause new major investments and continue their cautious "not-hiring-but-not-firing" approach to their workforce. To be clear, the gloomier mood surfacing in April and May was not yet visible in hard economic data as I put fingers to keyboard. Time will tell whether that disconnect lasts.
I'm particularly focused on how prices of goods and services and consumer demand change over time. For now, questions outnumber answers. Will businesses pass through any increases in input costs to the price of the products they sell? Will suppliers be willing to absorb some of the tariff costs? Will businesses producing finished goods choose to absorb some of that cost? Will the responses and resilience to the changing environment differ for larger and smaller companies?
To the extent that firms pass through higher costs, will consumers pay them or will demand decline instead? Will the many ongoing bilateral trade negotiations produce agreements and, if so, when and what will they entail?
Trade-related monetary policy considerations
From a monetary policy perspective, if tariffs do spur price increases, will it be a one-time bump or the start of a more protracted inflationary episode? If the first, then monetary policy can likely look past it. If it's the second, then there is a risk that inflation and higher inflation expectations could get entrenched in a more enduring way, which could warrant a policy response.
This represents a lot of moving parts. And trade policy is but one source of unknowns. Fiscal, tax, and regulatory policy are all likely to see big changes in the coming months as Congress works through its budget processes and the Trump Administration continues to implement its agenda. In each area, one could generate a list of questions as long as the set I just offered about trade. For now, neither I nor anyone has clear answers for any of these questions.
There is a great deal of uncertainty out there, making it quite difficult to forecast the economy with confidence. Given that, I continue to believe the best approach for monetary policy is patience. As the economy remains broadly healthy, we have space to wait and see how the heightened uncertainty affects employment and prices. So, I am in no hurry to adjust our policy stance.
Policy framework review in final stages
No matter how the economy unfolds, it's a safe bet that the Fed will stay in the spotlight throughout 2025. Scrutiny and criticism come with a job that is crucial to the welfare of the American people.
As a participant in the Federal Open Market Committee (FOMC), it is my duty to stay focused on achieving price stability and maximum employment, so that the US economy has a sound foundation that enables all Americans to live their best lives.
Monetary policy is most effective when the public understands why and how it is being pursued. As a consequence, it is good practice for policymakers to periodically take a look at how well our policy is understood. That is why the FOMC conducts a review of our communications and strategic policymaking framework every five years. The current review is in its final stages.
An important part of that project is hearing from the public via events we call Fed Listens, including one we'll host at the Atlanta Fed headquarters on June 4. If you're reading this on June 3, please tune into the session via livestream. Or you can watch a recording here. Each of the dozen regional Reserve Banks is holding a similar gathering of business and community leaders.
The framework review was also informed by academics and practitioners from outside the Fed System at the Thomas Laubach Research Conference in mid-May. In addition, the review involved many weeks of discussion among FOMC participants and staff.
I look forward to the results of the framework review. I trust that it will further the Federal Reserve's tradition of transparency and openness and help us in our pursuit to make our actions as clear as possible to the public. The better the American people understand our monetary policy approach and actions, the more effective that policy can be.
Though this review may result in some changes to the current framework, I assure you one thing that has not changed: my commitment to striving to achieve price stability and sustainable maximum employment, which together constitute the underpinnings of an economy that works for everyone.
Dr. Raphael W. Bostic took office June 5, 2017, as the 15th president and chief executive officer of the Federal Reserve Bank of Atlanta. He is responsible for all the Bank's activities, including monetary policy, bank supervision and regulation, and payment services. He serves on the Federal Open Market Committee, the monetary policymaking body of the Federal Reserve System.
From 2012 to 2017, Bostic was the Judith and John Bedrosian Chair in Governance and the Public Enterprise at the Sol Price School of Public Policy at the University of Southern California (USC).
He arrived at USC in 2001 and served as a professor in the School of Policy, Planning, and Development. His research has spanned many fields, including home ownership, housing finance, neighborhood change, and the role of institutions in shaping policy effectiveness. He was director of USC's master of real estate development degree program and was the founding director of the Casden Real Estate Economics Forecast.
Bostic also served USC's Lusk Center for Real Estate as the interim associate director from 2007 to 2009 and as the interim director from 2015 to 2016. From 2016 to 2017, he was the chair of the center's Governance, Management, and Policy Process Department.
From 2009 to 2012, Bostic was the assistant secretary for policy development and research at the U.S. Department of Housing and Urban Development (HUD). In that role, he was a principal adviser to the secretary on policy and research, helping the secretary and other principal staff make informed decisions on HUD policies and programs, as well as on budget and legislative proposals.
Bostic worked at the Federal Reserve Board of Governors from 1995 to 2001, first as an economist and then as a senior economist in the monetary and financial studies section, where his work on the Community Reinvestment Act earned him a special achievement award.
He serves on many boards and advisory committees, including Georgia's Partnership for Inclusive Innovation. He is also a member of Harvard University's Board of Overseers. He previously served as the chair of the board of directors of the United Way of Greater Atlanta and chair for the Metro Atlanta Chamber of Commerce, and a member of the Advisory Committee on Economic Inclusion at the Federal Deposit Insurance Corporation.
Bostic graduated from Harvard University in 1987 with a combined major in economics and psychology. He earned his doctorate in economics from Stanford University in 1995.
The Federal Reserve Bank of Atlanta serves the Sixth Federal Reserve District, which covers Alabama, Florida, and Georgia, and parts of Louisiana, Mississippi, and Tennessee. The Bank has branches in Birmingham, Jacksonville, Miami, Nashville, and New Orleans.
Updated February 2024Bostic, Raphael W. April 18, 2020. "Opinion: Fed's Working to Aid Economy, Post-Pandemic Recovery
." Atlanta Journal-Constitution.
Bostic, R. and Johnson, M. January 15, 2020. "BankThink: How to keep community banks thriving." American Banker.
Boarnet, M. G.; Bostic, R. W.; Rodnyansky, S.; Burinskiy, E.; Eisenlohr, A.; Jamme, H.; and Santiago-Bartolomei, R. 2020. "Do High Income Households Reduce Driving More When Living near Rail Transit?" Transportation Research Part D: Transport and Environment 80.
Bostic, R. W.; Jakabovics, A.; Voith, R.; and Zielenbach, S. 2019. "Mixed-Income LIHTC Developments in Chicago: A First Look at Their Income Characteristics and Spillover Impacts." In What Works to Promote Inclusive, Equitable Mixed-Income Communities, edited by Mark L. Joseph and Amy T. Khare, cluster #1, section A, no. 6.
Boarnet, M. G.; Bostic, R. W.; Burinskiy, E.; Rodnyansky, S.; and Prohofsky, A. 2018. "Gentrification near Rail Transit Areas: A Micro-Data Analysis of Moves into Los Angeles Metro Rail Station Areas. Research Reports, University of California National Center for Sustainable Transportation.
Bostic, R. W. and Molaison, D. Forthcoming. "Hurricane Katrina: Devastation, Possibilities and Prospects." In Economic and Risk Assessment of Hurricane Katrina, University of Southern California Center for Risk and Economic Analysis of Terrorism Events.
Bostic, R.; Kim, A.; and Valenzuela, A. 2016. "An Introduction to the Special Issue: Contesting the Streets 2: Vending and Public Space in Global Cities." Cityscape 18(1): 3–10.
Bostic, R. W. and Ellen, I. G. 2014. "Introduction: Special Issue on Housing Policy in the United States." Journal of Housing Economics 24: 1–3.
Bostic, R. 2014. "CDBG at 40: Opportunities and Obstacles." Housing Policy Debate 24(1): 297–302.
Bostic, R. W. 2014. "Resilient Economic Development: Challenges and Opportunities." In University of Illinois Chicago Urban Forum, edited by M. Pagano. University of Illinois Press.
Bostic, R. W. and McFarlane, A. 2013. "The Proposed Affirmatively Furthering Fair Housing Regulatory Impact Analysis." Cityscape: A Journal of Policy Development and Research 15(3): 257.
Bostic, R. W.; Thornton, R. L.; Rudd, E. C.; and Sternthal, M. J. 2012. "Health in All Policies: The Role of the U.S. Department of Housing and Urban Development and Present and Future Challenges." Health Affairs 31(9): online.
Graddy, E., with Bostic, R. W. 2010. "The Role of Private Agents in Affordable Housing Policy." Journal of Public Administration Research and Theory 20, special issue: 81–99.
Bostic, R.; Gabriel, S.; and Painter, G. 2009. "Housing Wealth, Financial Wealth, and Consumption: New Evidence from Micro Data." Regional Science and Urban Economics 39(1): 79–89.
Bostic, R. W., with Engel, K.; McCoy, P.; A. Pennington-Cross; and Wachter, S. 2008. "State and Local Anti-Predatory Lending Laws: The Effect of Legal Enforcement Mechanisms." Journal of Economics and Business 60(1–2): 47–66.
An, X. and Bostic, R. W. 2008. "GSE Activity, FHA Feedback, and Implications for the Efficacy of the Affordable Housing Goals." Journal of Real Estate Finance and Economics 36(2): 207–31.
An, X.; Bostic, R. W.; Deng, Y.; and Gabriel, S. 2007. "GSE Loan Purchases, the FHA, and Housing Outcomes in Targeted, Low-Income Neighborhoods." In Brookings-Wharton Papers on Urban Affairs, edited by G. Burtless and J.R. Pack. Brookings Institute Press.
Sloane, D. C., with Bostic, R. W. and Lewis, L. B. 2007. "The Neighborhood Dynamics of Hospitals as Land Owners." Lincoln Land Institute publication.
Bostic, R. W., with Longhofer, S. D. and Redfearn, C. 2007. "Land Leverage: Decomposing Home Price Dynamics." Real Estate Economics 35 (2): 183–208.
Bostic, R. W. and Prohofsky, A. 2006. "Enterprise Zones and Individual Welfare: A Case Study of California." Journal of Regional Science 46 (2): 175–203.
Bostic, R. W. and Gabriel, S. A. 2006. "Do the GSEs Matter to Low-Income Housing Markets? An Assessment of the Effects of GSE Loan Purchase Activity on California Housing Outcomes." Journal of Urban Economics 59: 458–75.
Black, H.; Bostic, R. W.; Robinson, B.; and Schweitzer, R. 2005. "Do CRA-Related Events Affect Shareholder Wealth? The Case of Bank Mergers." The Financial Review 40(4): 575–86.
Bostic, R. W. with Robinson, B. 2004. "Community Banking and Mortgage Credit Availability: The Impact of CRA Agreements." Journal of Banking and Finance 28: 3069–95.
Bostic, R. W., with Calem. P. S. and Wachter, S. M. 2004. "Hitting the Wall: Credit as an Impediment to Homeownership." In Building Assets, Building Credit: Creating Wealth in Low-Income Communities, edited by N. Retsinas and E. Belsky. Joint Center for Housing Studies and Brookings Institution Press.
Bostic, R. W., with Redfearn, C. 2004. "Book Review [The Color of Credit: Mortgage Discrimination, Research Methodology and Fair Lending Enforcement, by Stephen L. Ross and John Yinger]." Journal of Regional Science 44(1):162–65.
Bostic, R. W., with Aaronson, D.; Huck, P.; and Townsend, R. 2004. "Supplier Relationships and Small Business Use of Trade Credit." Journal of Urban Economics 55(1): 46–67.
Bostic, R. W., with Barakova, I.; Calem, P.; and Wachter, S. 2003. "Does Credit Quality Matter for Homeownership?" Journal of Housing Economics 12(4): 318–36.
Bostic, R. W. 2003. "A Test of Cultural Affinity in Home Mortgage Lending." Journal of Financial Services Research 23(2): 89–112.
Bostic, R., with Robinson, B. 2003. "Do CRA Agreements Increase Lending?" Real Estate Economics 31(1): 23–51.
Bostic, R. W., with Calem, P. S. 2003. "Privacy Restrictions and the Use of Data at Credit Repositories." In Credit Reporting Systems and the International Economy, edited by Margaret J. Miller. Boston: MIT Press.
Bostic, R. W., with Martin, R. 2003. "Black Homeowners as Gentrifying Force? Neighborhood Dynamics in the Context of Minority Homeownership." Urban Studies 40(12).
Bostic, R. W. 2002. "Equal Access to Credit." In 25 Years of Credit Research, edited by Mike Staten. Washington, DC: Georgetown University Press.
Bostic, R., with Canner, G. B. 2000. "Consolidation in Banking: How Recent Changes Have Affected the Provision of Banking Services." The Neighborworks Journal.
Bostic, R., with Avery, R. B. and Canner, G. B. 2000. "Highlights of a Survey of the Performance and Profitability of CRA-Related Lending." Housing America Update.
Bostic, R., with Avery, R. B. and Canner, G. B. 2000. "CRA Special Lending Programs." Federal Reserve Bulletin 86: 711–31.
Bostic, R., with Avery, R. B.; Calem, P. S.; and Canner, G. B. 2000. "Credit Scoring: Statistical Issues and Evidence from Credit Bureau Files." Real Estate Economics 28: 523–47.
Bostic, R., with Canner, G. B. 1998. "New Information on Small Business and Small Farm Lending: The 1996 CRA Data." Federal Reserve Bulletin 84(1): 1–21.
Bostic, R., with Avery, R. B. and Samolyk, K. A. 1998. "The Role of Personal Wealth in Small Business Finance." Journal of Banking and Finance 22: 1019–61.
Bostic, Raphael W. May 6, 2024. "How the Fed Goes Beyond the Data to Try to Make the Economy Work for Everyone." FedCommunities.
Bostic, R.; Bower, S.; Shy, O.; Wall, L.; and Washington, J. September 2020. "Digital Payments and the Path to Financial Inclusion." Promoting Safer Payments Innovation Series no. 20-1.
Raphael Bostic. "Quantitative Frightening?" macroblog. January 16, 2019.
Raphael Bostic. "What Does the Current Slope of the Yield Curve Tell Us?," macroblog. August 23, 2018.
Raphael Bostic. "Thoughts on a Long-Run Monetary Policy Framework" macroblog series:
"Framing the Question." March 26, 2018.
"Part 2: The Principle of Bounded Nominal Uncertainty." March 27, 2018.
"Part 3: An Example of Flexible Price-Level Targeting." March 28, 2018.
"Part 4: Flexible Price-Level Targeting in the Big Picture." April 2, 2018.
Raphael Bostic. "A Big-Picture Look at the Economy 
. " ECONversations. February 21, 2018.
Raphael Bostic. "'There's Still a Lot of Uncertainty': Atlanta Fed President Bostic Looks Back on 2024." January 7, 2025.
Raphael Bostic (interviewer) and Anthony Orlando. "'These Local Problems Do Have Some National Solutions': A Conversation about Inequality." February 27, 2020.
Raphael Bostic (interviewer) and James Fallows. "Wings over America: A Conversation with Author James Fallows." . January 2, 2020.
Raphael Bostic (interviewer) and Alessandro Acquisti. "Speaking Publicly on Privacy: A Conversation about Digital Privacy." April 2, 2019.
Raphael Bostic (interviewer) and Jerome Adams. "Health Is Wealth": A Conversation with the U.S. Surgeon General." January 3, 2019.
Raphael Bostic (interviewer) and Raj Chetty. "'A Kid Should Have a Fair Shot': A Discussion of Economic Mobility." October 22, 2018.
Raphael Bostic (interviewer) and David Lusk. "'It's a Really Dramatic Change': A Discussion of the Economics of Food." October 12, 2018.
Raphael Bostic. "'It's a Special Job': A Conversation with Atlanta Fed President Raphael Bostic." April 27, 2018.
