What are the key takeaways from this Marketplace episode?

Key insights include: **Model Reliability in Crisis:** When multiple unexpected shocks occur simultaneously — pandemic, European war, sweeping tariffs — historical economic models lose predictive accuracy. Bostic advises shifting from model-dependent forecasting to direct engagement with business decision-makers and consumers to understand real-time behavior, treating monetary policy as art rather than formula during high-uncertainty periods.; **Tariff Magnitude Miscalculation:** Businesses entering 2025 anticipated tariff levels roughly 20% of what April's announcements actually delivered. The gap forced companies and households to delay, postpone, and creatively reroute supply chains, stretching tariff impacts across a longer timeline — but generating significant stress, particularly for small businesses with limited financial buffers to absorb structural cost shocks.; **K-Shaped Consumer Spending:** Aggregate consumer spending remains elevated not because all consumers are healthy, but because upper-income households — who drive a disproportionate share of GDP — continue spending freely. Lower-income households are actively substituting cheaper alternatives. Policymakers and analysts should disaggregate spending data by income percentile rather than relying on headline consumption figures for economic assessment.

What did Rafael Bostick discuss on Marketplace?

Outgoing Atlanta Fed President Rafael Bostic reflects on nine years leading one of 12 regional Federal Reserve Banks, addressing simultaneous economic disruptions — tariffs, AI-driven labor shifts, immigration contraction, and geopolitical instability — that render traditional monetary policy models unreliable and force decision-making through direct business and consumer outreach. Key topics include: **Model Reliability in Crisis:** When multiple unexpected shocks occur simultaneously — pandemic, European war, sweeping tariffs — historical economic models lose predictive accuracy. Bostic advises shifting from model-dependent forecasting to direct engagement with business decision-makers and consumers to understand real-time behavior, treating monetary policy as art rather than formula during high-uncertainty periods.; **Tariff Magnitude Miscalculation:** Businesses entering 2025 anticipated tariff levels roughly 20% of what April's announcements actually delivered. The gap forced companies and households to delay, postpone, and creatively reroute supply chains, stretching tariff impacts across a longer timeline — but generating significant stress, particularly for small businesses with limited financial buffers to absorb structural cost shocks..

How long is this episode of Marketplace?

This episode is 25 minutes long. SignalCast provides an AI-generated summary so you can get the key insights in about 3 minutes.

Marketplace

"We're trying to control what we can control": A Fed president reflects

February 24, 2026

25 min episode · 2 min read

Rafael Bostick

Episode

25 min

Read time

2 min

Topics

Career Growth, Health & Wellness, Investing

AI-Generated Summary

Published Feb 26, 2026

Key Takeaways

✓Model Reliability in Crisis: When multiple unexpected shocks occur simultaneously — pandemic, European war, sweeping tariffs — historical economic models lose predictive accuracy. Bostic advises shifting from model-dependent forecasting to direct engagement with business decision-makers and consumers to understand real-time behavior, treating monetary policy as art rather than formula during high-uncertainty periods.
✓Tariff Magnitude Miscalculation: Businesses entering 2025 anticipated tariff levels roughly 20% of what April's announcements actually delivered. The gap forced companies and households to delay, postpone, and creatively reroute supply chains, stretching tariff impacts across a longer timeline — but generating significant stress, particularly for small businesses with limited financial buffers to absorb structural cost shocks.
✓K-Shaped Consumer Spending: Aggregate consumer spending remains elevated not because all consumers are healthy, but because upper-income households — who drive a disproportionate share of GDP — continue spending freely. Lower-income households are actively substituting cheaper alternatives. Policymakers and analysts should disaggregate spending data by income percentile rather than relying on headline consumption figures for economic assessment.
✓Labor Market Signal Distortion: A single monthly jobs number now carries a different meaning than one year ago. Reduced immigration has contracted labor supply while AI adoption reduces hiring demand. Bostic recommends analyzing labor data alongside capital investment and technology adoption trends simultaneously, since lower hiring figures may reflect strategic workforce optimization rather than economic weakness or recessionary pressure.
✓Inflation Credibility Risk: Every month the Fed remains above its 2% inflation target increases the probability that businesses and households recalibrate long-term expectations to 3%, permanently altering investment risk calculations. Bostic frames maintaining credible commitment to the 2% target as the Fed's most consequential near-term priority, warning that perceived loss of resolve compounds the underlying inflation problem itself.

What It Covers

Outgoing Atlanta Fed President Rafael Bostic reflects on nine years leading one of 12 regional Federal Reserve Banks, addressing simultaneous economic disruptions — tariffs, AI-driven labor shifts, immigration contraction, and geopolitical instability — that render traditional monetary policy models unreliable and force decision-making through direct business and consumer outreach.

Key Questions Answered

•Model Reliability in Crisis: When multiple unexpected shocks occur simultaneously — pandemic, European war, sweeping tariffs — historical economic models lose predictive accuracy. Bostic advises shifting from model-dependent forecasting to direct engagement with business decision-makers and consumers to understand real-time behavior, treating monetary policy as art rather than formula during high-uncertainty periods.
•Tariff Magnitude Miscalculation: Businesses entering 2025 anticipated tariff levels roughly 20% of what April's announcements actually delivered. The gap forced companies and households to delay, postpone, and creatively reroute supply chains, stretching tariff impacts across a longer timeline — but generating significant stress, particularly for small businesses with limited financial buffers to absorb structural cost shocks.
•K-Shaped Consumer Spending: Aggregate consumer spending remains elevated not because all consumers are healthy, but because upper-income households — who drive a disproportionate share of GDP — continue spending freely. Lower-income households are actively substituting cheaper alternatives. Policymakers and analysts should disaggregate spending data by income percentile rather than relying on headline consumption figures for economic assessment.
•Labor Market Signal Distortion: A single monthly jobs number now carries a different meaning than one year ago. Reduced immigration has contracted labor supply while AI adoption reduces hiring demand. Bostic recommends analyzing labor data alongside capital investment and technology adoption trends simultaneously, since lower hiring figures may reflect strategic workforce optimization rather than economic weakness or recessionary pressure.
•Inflation Credibility Risk: Every month the Fed remains above its 2% inflation target increases the probability that businesses and households recalibrate long-term expectations to 3%, permanently altering investment risk calculations. Bostic frames maintaining credible commitment to the 2% target as the Fed's most consequential near-term priority, warning that perceived loss of resolve compounds the underlying inflation problem itself.

Notable Moment

Bostic, typically characterized by steady optimism across years of interviews, acknowledged making monetary decisions in conditions resembling a fog — yet still maintained no recession appears in his outlook, citing resilient business feedback from early 2025 as evidence the economy retains meaningful productive capacity despite widespread uncertainty.

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Episode Transcript

Turns out central bankers aren't all about monetary policy. I've actually been a model, for a skateboard company. The president of the Atlanta Fed on the program today, embarrassing stories and all. From American public Marketplace. From the studios of Georgia Public Broadcasting today, I'm Kai Risdall. It is Tuesday, February. Good as always. Have you along, everybody? Alright. So to be fair to Rafael Bostick, the skateboarding modeling gig was when he was a kid, but that is in fact how our interview started at an event this morning here in Atlanta. After nine years, Saturday is Bostick's last day on the job running one of the 12 regional Federal Reserve Banks and, on a rotating basis, voting on interest rate policy. So we started with him not getting to do that anymore. The first thing I wanna ask you is not that not that you're done done, but what was it like leaving your last FOMC meeting knowing that that you were on your way out? Yeah. You don't know this. So the last FOMC meeting, I took virtually. Yeah. I figured it would've. It was, in January, and that was the time when they had the ice storm. And I had three flights canceled Oh. Trying to get up there. And so I figured three strikes you out, and I was just so I I dialed in. So it was kind of surreal to, to have the the last few statements be, from a distance and not be able to see people in in the room. But it but, you know, it's funny when when you know it's the last time you're gonna say things, is that you're gonna make a different kind of statement. And what I really wanted people, my colleagues to know is what I appreciated about, what Atlanta allowed me to bring to the table and, how we have a distinctive voice because of what we do and that more people needed to to lean in on that and and be that way. And then I then I, you know, I just said, you know, I'm gonna be cheering for you as we move forward, and know that, from what everything I've heard, you know, Americans trust the Fed and believe in it and think it's a really important institution and need, everyone to remember our mandates, remember our mission, and, just be true to it always. So let's talk about right now. This is and and you've said a version of this, as uncertain a time, as tough a time for monetary policy and central bankers, as there has been in a very long while. First of all, why do you believe that? Why do you say that? Well, I'll say it like this. When I go and talk in public settings, a question I often get is, what are the three things that are keeping you up at night? And You have three thing only three? I I mean, I'm a …

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