Raphael Bostic has been all over the place without leaving Atlanta. He’s rarely left his house, in fact.
Since the coronavirus pandemic began restricting travel in early March, the president and chief executive officer of the Federal Reserve Bank of Atlanta has spoken with thousands of businesspeople, civic and community leaders, students, academics, and journalists in Birmingham, Fort Lauderdale, Nashville, Jacksonville, Atlanta, Los Angeles, Washington, and points in between. Some weeks, he’s done three webcasts.
Bostic emphasizes the importance of policymakers keeping the public informed amid severe economic stress with no clear end in sight. Consequently, regional Federal Reserve Bank presidents across the country often appear online.
“It’s important to be out speaking now because there is so much uncertainty,” Bostic said. “I’ve found that people are very hungry for any information they can get, even if some questions are left unanswered. I hope that our engagements have helped to ground people and give them a sense of stability and calm.”
That apparently happened May 7 when Bostic addressed more than 140 members of the South Florida Business Alliance. Bostic’s communication “helped instill some much-needed optimism in terms of what the recovery from COVID-19 will look like,” said Michael Cobelo of the Greater Fort Lauderdale Chamber of Commerce.
Complex Fed actions share a fundamental goal
In addition to his take on the macroeconomy, Bostic is explaining Federal Reserve actions designed to keep financial markets functioning. The Fed has established nine credit programs, or facilities, and the details are complicated. But in his talks, Bostic clarifies that through its range of actions, the central bank is pursuing one overarching goal—to prevent the economy from completely freezing up while public health experts get the virus under control.
He is also candid about what the Fed cannot do. While the central bank is deploying every tool in its toolbox to support the nation’s economy, the Fed must work within its legal framework. In many of his recent appearances, the Atlanta Fed chief has noted that the Federal Reserve is not structured to make grants or to lend money directly to individuals and firms. Rather, the Fed works through financial institutions and financial markets to ensure there is enough liquidity—readily accessible money—to keep the financial system functioning.
Simply put, the Fed can control the size of the money supply but not spend it. Spending, or fiscal policy, is the job of Congress, which also of course has a critical role in relief and recovery efforts.
Bostic tailors his presentations for each audience. Still, most of his recent talks span the economic landscape. That terrain has been especially uneven of late, what with a new level of uncertainty layered on top of the unknowns inherent in any economic forecast. Such ambiguity makes it difficult to give clear answers to people who are worried about the future, Bostic said.
To establish context, he typically emphasizes that, first, the nation is facing a public health crisis. Therefore, a material economic recovery requires bringing the spread of the coronavirus under some control.
“Regarding an outlook, the uncertainty makes it difficult to focus on one particular scenario,” Bostic said. “As a consequence, I try to give the viewers and listeners a sense of the range of possibilities and, for some selected scenarios, talk about the signs that would make that scenario more likely.”
For instance, recovery could come sooner if we don’t see new surges in infections, and if a lot of lost jobs return reasonably quickly. On the other hand, continued increases in infections, longer-term job losses, and widespread insolvencies among previously healthy businesses would portend a delayed and weaker recovery.
One uniform economic recovery is unlikely
Bostic also points out that recovery likely will not look the same everywhere for two main reasons. First, prosperity was not uniform before the pandemic. Across the country and the Atlanta Fed’s district—Alabama, Florida, Georgia, and parts of Louisiana, Mississippi, and Tennessee—economic vitality varied across and even within cities and rural areas. And now, the most vulnerable populations are suffering most from the economic crisis, and low- and moderate-income communities will almost certainly recover more slowly, Bostic said. Second, the coronavirus is hitting some locations harder than others, hotspots that will likewise face a more daunting road back to economic normalcy.
Communicating these complexities would be a delicate task under any circumstances. Holding these discussions via webcast adds still more challenges. South Florida attendees, for instance, missed the opportunity to verbally communicate with each other or Bostic, Cobelo said.
Conversely, Bostic can actually reach more people virtually than he could live. A typical online event lasts 30 minutes to an hour, as opposed to 24 to 48 hours to travel and conduct live discussions. Because he is not spending time traveling, Bostic can accommodate more requests.
In some cases, online audiences are larger than they would be in person as physical space is not limited. For example, 2,225 viewers tuned into a May 5 discussion with Bostic and a community development financial institution called Enterprise Community Partners.
Finally, another advantage to telespeaking has little to do with monetary policy. “There is less of an expectation about dress code,” Bostic added, “so I’ve been able to dress a bit more casually.”
Charles Davidson
Staff writer for Economy Matters