Bostic says the Fed needs to put more efforts into addressing racial economic impact caused by the pandemic

The Fed’s only Black President Raphael Bostic said the Federal Reserve needs to do more in fighting racial economic disparities caused by the coronavirus pandemic.

“The Fed has an important role to play. We must be central to this conversation. And increasingly, I think we are,” said Bostic in a speech to the Securities Industry and Financial Markets Association, on Monday.

Bostic added that the present recovery seems like a “less-than” sign, a recovery he calls uneven and skewed. The Atlanta Fed president describes the conditions of the uneven recovery to the K-shaped recovery compared to what other analysts outlined.

The coronavirus pandemic has caused industries and workers to adopt social distancing, work-from-home, and other slow conditions to get through the pandemic recovery process. Other sectors of the economy that requires high customer contact such as food service, small retail, transportation, and hospitality have been impacted the most by the pandemic, as most of the workers under this category, are mostly low-income citizens. It is also quite impossible to have workers in such sectors work from home or fully observe social distancing, therefore, putting them more at the unfavorable end of the economy.

According to Bostic, this is “an economic recovery that benefits some parts of the economy much less than other parts. In short, these circumstances are laying bare—and exacerbating-disparities that have long plagued our economy, along ethnic, racial, gender, geographic and occupational lines.”

The Atlanta Feds President says he is not fully pessimistic about the economic recovery. He sees a way out of the situation and believes there is more the Feds can do to aid economic recovery and close racial economic gaps. He says help can be rendered through the Fed’s current policies, one of which states the central bank’s pledge not to increase interest rates until inflation hits an average of 2% over a period of time. Such a policy is here to stay for a long time, even after the U.S. unemployment rate drops, Bostic says.

“We need to participate in a deeper, more creative reckoning with a history of racial injustice that continues to weaken the economy for all of us,” said Bostic. “It will be some time before we tighten our interest rate stance or pull back strongly from our actions supporting financial functioning.”

Bostic said he is in support of the removal of the Fed’s low rate policies, as well as the lending and liquidity programs it initiated amid the pandemic. He believes the Fed’s “new approach should help minorities, women, and lower-income earners to be more fully connected to the labor market.” This way, traditionally marginalized groups will have a “better opportunity to secure jobs and economic resilience,” as too many U.S. citizens have had their economic resilience tested by the COVID-related economic crisis.