Atlanta Fed takes hit from lawmakers over 'wokeness'

Some Republican lawmakers worry Atlanta Fed President Raphael Bostic is too focused on his "woke" agenda as inflation rages at levels not seen in decades.

Bostic, who is Black, has in recent months spoken out against racial injustice while taking a sanguine view on inflation, one of the components of the Fed’s dual mandate.

"As the crime rate in American cities skyrockets and the Biden administration tries harder each day to distance itself from the ‘Defund the Police’ movement, one of the individuals rumored to be on the president’s shortlist for Fed Chair is advocating for letting criminals out of jail in order to boost the economy," a Senate Republican aide told FOX Business. "With consumer prices soaring to new highs, the President of the Atlanta Fed should be focused on the threat of runaway inflation—not attacking the U.S. law enforcement system."

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Core personal consumption expenditures, the Fed’s preferred inflation reading, rose 0.5% in May and 3.4% annually, the most in nearly three decades. 

Mounting inflation concerns have put the central bank on the defensive. The Fed last August tweaked its policy, saying it would allow inflation to run "moderately" above 2% "for some time" as it attempts to bring the economy back to full employment.

Bostic has been of the opinion, like Federal Reserve Chairman Jerome Powell, that the recent burst of inflation will be temporary. 

"We are going to have somewhat of a bumpy time with inflation in the coming months … but I don’t see it as being a major concern," Bostic told reporters after a virtual event hosted by the Economic Club of New York in March.

In May, he said the Fed wouldn’t fully understand the inflation dynamics until the fall or later, and backed the continuation of the central bank’s easy money policy. But more recently, he has cautioned that the Fed may need to move faster to stamp out inflation.

The Fed is also struggling to meet its employment mandate with the unemployment rate ticking up to 5.9% in June as the economy faced a 6.8 million worker shortfall from pre-pandemic levels. This, despite a near-record 9.2 million job openings. 

"The Fed’s mandate is to pursue both maximum employment and price stability, and we take into account both when it comes to setting monetary policy," Bostic told FOX Business. 

"With inflation data coming in stronger than I was expecting earlier in the year, I have said that it is appropriate to be planning the start of the tapering process," he added. "On our maximum employment mandate, we look at both near-term issues like those caused by the pandemic and long-term issues that are keeping people from participating fully in the labor market."

But as the inflation picture has continued to worsen and the labor market remains below potential, Bostic has forged ahead with a "woke" agenda. 

At a "Racism and the Economy" Fed event, he said the "incarceration is a drag" on the Fed’s ability to achieve a maximum employment goal. 

He cited a Richmond Fed study that found more than two-thirds of previously incarcerated people remained unemployed or underemployed five years after being released from prison. 

The study found the jobless rate for Black men with a high school education who have been incarcerated is 25% higher than those who have not and that being incarcerated reduces lifetime earnings by 33% and employment by 22%. 

Incarcerated White men with a high school diploma see lifetime earnings reduced by 43% and employment by 27%, the study found. The larger percentage decline for White men is due to White high school graduates having higher earnings than Black high school graduates. 

Bostic argued that incarceration and the U.S. criminal justice system "inhibits global competitiveness" and "can have the effect of exacerbating race-based employment, income and wealth disparities, which can limit economic mobility and resilience and ultimately constrain labor markets and compromise the performance of the overall economy."

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This is not the first time that Bostic has spoken out on social issues. 

Earlier this year he said there are "definitely merits" to reparations and called the changes to Georgia voting laws "troubling." That came after last year he published a letter titled "A Moral and Economic Imperative to End Racism."