Odd Lots Atlanta Fed's Raphael Bostic on Monetary Policy During Extreme Uncertainty
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May 16, 2025 
Raphael Bostic, President of the Federal Reserve Bank of Atlanta, shares his insights on navigating economic uncertainty. He discusses the unpredictable nature of tariffs and their impact on monetary policy, revealing how these factors complicate forecasting. Bostic explains why he has dialed back expectations for aggressive rate cuts and emphasizes the importance of data-driven strategies. The conversation also touches on the ongoing challenges faced by small businesses and the evolving landscape of corporate strategies in a post-pandemic world.
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Economic Resilience Dims Amid Uncertainty
- Economic resilience has weakened due to widespread uncertainty affecting consumer and business confidence.
- This reduced energy suggests slower growth but does not necessarily imply a recession in the near term.
Sentiment's Complex Role in Economy
- Negative consumer sentiment doesn't always result in economic slowdown, as seen in the pandemic.
- Current balance sheet conditions are less robust, so the economy might respond differently to declining sentiment now.
Cautious Firms Navigate Uncertainty
- Firms are cautious in managing labor and prices due to two-sided economic risks and shifting consumer tolerance.
- Diverse sectoral responses to these factors complicate aggregate economic forecasting.