Dr. Raphael Bostic, president and chief executive officer of the Atlanta Fed, visited Scheller undergraduate students in their Management of Financial Institutions class on Thursday, August 29. Dr. Bostic began speaking to the class taught by Professor of the Practice Gary T. Jones in 2017, the first year of Bostic’s tenure at the Atlanta Fed.
“Dr. Bostic continues a long tradition of the Federal Reserve Bank of Alanta presidents and CEOs coming to my class to speak,” said Jones, noting that Jack Guynn, Dennis Lockhart, and now Bostic have been guest lecturers since 2006.
Before speaking about the Federal Reserve and financial policies and mandates, Bostic gave the students an inspirational overview of his life. He graduated from Harvard University with a degree in economics and psychology and attended Stanford University, where he graduated with a Ph.D. in economics. He is currently the 15th president and chief executive officer of the Atlanta Fed.
Bostic had a varied financial and academic career, including time as a professor at the University of Southern California and as the assistant secretary for policy development and research for the U.S. Department of Housing and Urban Development, among other positions. He has also served on numerous advisory boards and commissions.
“One of the things that I've learned and taken with me throughout my career is the idea that my path is mine, and I have to own it. I have to drive the direction, and if I'm not happy with how things are going, I have to change it," he said, encouraging the student audience to take charge of their path and learn from mistakes.
Bostic provided an overview of the Federal Reserve, including its history, structure, roles, powers, and monetary policies. He discussed five core functions of the Fed: setting the nation’s monetary policy; promoting financial system stability; supervising and regulating financial institutions; fostering payment and settlement systems safety and efficiency; and promoting consumer protection and community development.
He explained how the Fed is assigned a dual mandate from the US Congress: to work toward price stability and maximum employment. During his talk, he described how the Fed works with federal, state, and local governments to implement policies to help citizens and communities.
Bostic described the Great Recession of 2008 and how the country resized due mainly to the Fed's role. He said the current economic situation is stabilizing, as the inflation rate has declined to 2.5 percent from a high of 7.1 percent in 2022, according to the personal consumption expenditures price index, the Fed’s preferred inflation gauge.
Inflation is the measurement of price stability. The Fed’s policymaking body, the Federal Open Market Committee (FOMC), began raising its benchmark interest rate, the federal funds rate, in March 2022 to try and lower inflation. Higher interest rates make it harder for companies and consumers to borrow money for purchases and expansions, which in turn slows economic activity and generally lowers upward pressure on prices across the economy.
With inflation far below its recent peak, the FOMC has begun debating when it will be appropriate to start lowering the federal funds rate.
“Now, we're starting to have conversations about this. Because once you start moving, you want to have an idea where you're moving to,” Bostic said. “That's the conversation we're starting to have.”
Bostic made sure to provide time for detailed and deliberate questions from the students and stayed after class to speak to several interested students one-on-one.
View the full lecture in the video below.