What people say and what people do are often different, but the contrast is especially evident in the economy right now, according to the new president of the Atlanta Federal Reserve Bank.
Raphael Bostic, 51, took the post June 5 following Dennis Lockhart’s retirement.
He said in an interview Thursday with The Atlanta Journal-Constitution that there is less economic activity and growth than you might expect if you just listened to what consumers tell pollsters and researchers.
Virtually every survey shows very high confidence – levels last seen during the boom of the 1990s, he said.
“But when you look at spending behavior or investment behavior, those types of metrics are not at high-confidence expansion levels,” Bostic said.
While consumer surveys and real-life behavior often diverge, they are rarely at odds for a long time.
“Typically what happens is if confidence goes up, spending goes up and we haven’t seen that,” he said. “So there’s a disconnect. I think we are actually seeing, to some extent, a playing out of psychology, of the collective psyche that is leading to a different outcome than we would expect.”
The explanation could have large implications for the economy, he said.
“Is it transient, something that is idiosyncratic to a certain period? Or are we seeing something more fundamental. And that is the million dollar question.”
Bostic is the first black president of a regional Fed bank. In an interview before leaving the Fed, Lockhart said he had urged the Fed’s board to consider minority candidates for the job. Calls for more diversity on the roster of regional Fed chiefs came from other quarters as well.
Bostic said he hopes that his presence will mean some different insights, perspectives and ideas will be brought to Fed discussions.
“For me personally, it doesn’t mean anything,” he said. “I do what I do, I am who I am, I bring what I bring to the table.”
The Atlanta Fed’s territory includes parts or all of six southeastern states. Bostic also is on the Fed’s rate-setting Federal Open Market Committee, but he will not have a vote on the committee until next year.
He has spent most of his career in either academia or government. He has an undergraduate degree from Harvard with a combined major in economics and psychology. He earned a doctorate in economics from Stanford University.
He worked for the Federal Reserve Board of Governors between 1995 and 2001. From 2009 to 2012, he was a high-ranking official at the U.S. Department of Housing and Urban Development.
When picked to run the Atlanta Fed, Bostic was a professor at the school of public policy University of Southern California. Smiling, he said Thursday that he is still adjusting to the position and the city.
“It seems to rain every day here,” he said.
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