Raphael Bostic, Interview: Atlanta Rotary Club

GDP

“So my projection for 2023 is for aggregate growth of GDP, gross domestic product, to be about 1%. That’s slower than what I think our baseline, we could probably grow about 2%. But it is not negative and my baseline projection or outlook is not for a recession.”

Jobs

“I do have unemployment in my projection increasing a little bit, but right now unemployment is 3.5%. And when I started in this job, people thought that that was an impossible number to hit. So moving up a little from 3.5 still means you’ve got a very, very healthy and strong economy that is producing lots of goods and that’ll be important.”

Inflation

“I talked about inflation as 2%. My projection does not have us getting to 2% before the end of the year. I think we can get to about three, but there’s a lot of just mechanical math that’s going to put constraints on how fast inflation can fall.”

Fed Funds

“Right now my model is for us to get to somewhere between five and five and a quarter.”

“We are in a clearly restrictive place. So our policy is more than neutral, is actually putting brakes on the economy. And so for me at this point, given the amount of uncertainty that’s out there, I think it’s really appropriate for us to be much more cautious and prudent in terms of our calibration of movements now than a restrictive space. So we’ve gone from 75 to 50, the next contemplation should be from 50 to 25. And when that plays out, I think the data will guide us and we’ll just have to see what that is.”

Pause

“My projection is we’ll get to somewhere five, five and a quarter, if not at the end of Q1 of this year, early Q2. And then I in my model, have us holding through the rest of 2023 and well into 2024.”

“On the pause versus pivot, I’m not a pivot guy, so I think we should pause and hold it and just stay there and just let the policy work.”