Fed’s Bostic sees signs that economic activity is leveling off

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Economic activity in parts of the U.S. is showing signs of leveling off amid a resurgence in coronavirus cases, according to Federal Reserve Bank of Atlanta President Raphael Bostic.

“There are a couple of things that we are seeing and some of them are troubling and might suggest that the trajectory of this recovery is going to be a bit bumpier than it might otherwise,” Bostic said in an interview with the Financial Times published Tuesday. “We’re watching this very closely, trying to understand exactly what’s happening.”

The U.S. has seen a pickup in coronavirus cases in recent weeks, forcing some states to re-impose restrictions and threatening the recovery in the world’s largest economy. The Atlanta Fed covers a region that includes some the worst-hit areas, such as Florida.

Federal Reserve Bank of Atlanta President Raphael Bostic
Federal Reserve Bank of Atlanta President Raphael Bostic

Bostic suggested that more economic support for small businesses may be needed, saying that “the longer this goes without them getting relief, the more likely that they’re not going to be able to survive, and so all the jobs associated with that will move from the temporary column into permanent column and that will be extremely painful.”

He declined to be drawn on the prospect of more monetary stimulus from the Fed, saying it’s unclear how the economy is being transformed.

“I do worry that circumstances are going to be very different in the future than they are now,” he said in the interview. “I want to be careful about being too presumptuous about where we’re going to be. All this uncertainty is definitely in my mind.”

Bloomberg News
Economy Raphael Bostic Federal Reserve Bank of Atlanta Federal Reserve FOMC Monetary policy