Fed's Bostic Discusses Inflation, Warsh & K-Shaped Economy

• The economic mood is characterized by 'cautious optimism,' with resilience in businesses and consumers adapting to uncertainty.
• Inflation remains 'too high for too long,' necessitating a restrictive Fed policy to achieve the 2% target.
• The labor market is turbulent due to structural changes like AI adoption and immigration shifts, leading to slower entry-level hiring and ongoing 'right-sizing.'
• Bostic defends the Fed's data-dependent approach and its independence amidst external criticism, stating that the institution is doing its best under complex circumstances.

Outgoing Atlanta Fed President Raphael Bostic describes the current economic mood as 'cautious optimism,' highlighting resilience among businesses and consumers despite ongoing uncertainties. He emphasizes the paramount need for the Fed to maintain a restrictive policy to bring inflation back to 2%, while also acknowledging structural shifts in the labor market and the complexity of the economy.