CNBC’s Steve Liesman and Atlanta Fed President Raphael Bostic join 'Squawk Box' to discuss Moody's U.S. credit downgrade, impact of tariffs, state of the economy, the Fed's inflation fight, interest rate outlook, health of the U.S. Treasury market, and more.
0:55What about the impact on the desire of banks and foreign institutions to hold US debt?
1:28How does something like this get to the Fed's door?
2:12I don't want to know what data you're looking at, but what processes are you trying to figure out?
3:42Is there a difference in the sequence of when any of this shows up in the economic data?
4:41Do you think that if you could figure out the tariff regime and what was happening with employment, you would still be cutting rates twice?
6:10And are there all these questions around the downgrade from the United States and what Congress ultimately does in terms of the budget and whether they're going to tackle some of the deficits that have been building up for over a decade?
Good morning, Becky. I'm here at Amelia Island at the Atlanta Fed's 29th annual financial markets conference with Atlanta Fed President Raphael Bostic. Thanks for joining us, Raf.
I have to start with the news over the weekend, which came out Friday: the downgrade by Moody's of the US debt. Is that an economic issue, a policy issue, or a financial markets issue? How do you think about an event like that?
Well, first of all, it's really good to have you here, and I'm always happy to be on the show. What I would say is it will cut across all of those things, and we'll just have to see how it plays out. There's a lot of negotiation happening in Washington right now around the budget, around tariffs and the like. I think we'll just have to see what happens. But with that downgrade, it will have implications for the cost of capital and a bunch of other things, so it could have a ripple through the economy.
Well, there have been a lot of discussions about this. I know folks on this show have been talking about that as well. I think we have to really wait and see. Look, there's a lot of turbulence happening right now. The economy is in a lot of flux. Policies are in flux. There's a lot of uncertainty. I think we'll have to wait three to six months to start to see where this settles out, and I think that will be an important determinant about people's willingness and appetite for investing in the US.
Yeah, so for us, I think the most significant way this plays out is really by us having to get an understanding about what businesses are going to do in this new environment, how households are going to respond, whether consumers are going to take on higher prices if that's in fact what happens, and then roll that up into an outlook for the future. What I will say is today things are very much in flux. There's a lot of uncertainty, and what it means for me is before I want our policy to move in any dramatic direction, we've got to let things sort out a bit. So that's kind of where I am right now.
Talk me through how you think about tariffs and the economic effects of them. There's a consumer angle, a business angle, and a financial markets angle, which a lot of people are talking about here. I don't want to know what data you're looking at, but what processes are you trying to figure out?
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Bostic, R. (2025, May 19). Atlanta Fed President Bostic: Leaning towards one rate cut this year [Interview transcript]. CNBC Television. CEOInterviews.AI. https://ceointerviews.ai/interview/621664/
MLA
Raphael Bostic. "Atlanta Fed President Bostic: Leaning towards one rate cut this year." CNBC Television, 19 May. 2025. Transcript, CEOInterviews.AI, https://ceointerviews.ai/interview/621664/.
BibTeX
@misc{bostic2025_621664,
author = {Raphael Bostic},
title = {Atlanta Fed President Bostic: Leaning towards one rate cut this year},
howpublished = {Interview transcript, CNBC Television. CEOInterviews.AI},
year = {2025},
month = {may},
url = {https://ceointerviews.ai/interview/621664/},
note = {Speaker-attributed transcript with timestamps}
}
