Raphael Bostic, Atlanta Federal Reserve Bank President and CEO, made a startling admission while appearing on CBS’s Face The Nation this past weekend. In short, there is no easy way out of the government’s decision of easy money policies; either our wallets and bank accounts feel pain now in the short term or they feel more pain later in the long term.
Speaking to host Margatet Brennan, Bostic said: “[I]nflation is high. It’s too high.And we really need to do all that we can to make it come down.” He then added: “And when we think about its source, it’s because we have very high demand.”
“We have not enough supply,” he continued. “[W]hat we were hoping would happen is that we’d see some movement on the supply side, to move the supply up so that there wasn’t so much of an auction on goods that are in the marketplace. But that hasn’t happened. And that really has meant that we have had to turn to our policies to try to take demand down.”
Not mentioned in this segment was the fact that artificial demand was created when Covid-related policies saw the unprecedented printing – or more accurately, creation – of over 40% of all U.S. dollars ever seen in circulation. Where was Bostic two years ago when the Federal Reserve was setting us up for massive inflation that is close to doubling most peoples’ grocery bills? Little warning was issued
Bostic went on to dismiss concerns that the U.S. is already in a recession, despite experiencing two consecutive quarters of negative GDP growth, and claimed that the economy was “still creating lots of jobs on a monthly basis.” The line between economic expert and political tool is clearly blurred.
In order to avoid rampant inflationary pressure on the economy, Bostic said the only solution is an intentional economic slowdown. Addressing this blunt reality, he stated: “But I do think that we’re going to do all that we can at the Federal Reserve to avoid deep, deep pain. And I think there are some scenarios where that’s likely to happen.”
“It’s not going to be easy,” Bostic said. “There will likely be some job losses. But I think if you look over the historical history here and our economic experiences, there’s a really good chance that if we have job losses, it’s going to be smaller than what we’ve seen in other situations. And that’s what I’m banking on.”
The Daily Wire noted that the Reserve Chairman’s remarks on Face The Nation coincide with another round of increased rates and continued reports of increasing inflation.
Bostic’s comments come as the Federal Reserve increased interest ratesby another 75 basis points, or 0.75%, last week. The news sent the stock market tumbling on Wednesday; the Dow Jones Industrial Average closed below 30,000 on Friday, plunging to the lowest level since 2020 and sitting on the edge of bear market territory. Moreover, the Atlanta Fed projected the economy would stagnate in the third quarter; the Bank’s GDPNow tracker predicts just 0.3% annualized GDP growth in the third quarter of 2022.
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