Artificial intelligence may push the U.S. into a period where unemployment remains higher even when the economy is functioning normally, according to outgoing Atlanta Fed President Raphael Bostic. In his interview, he explains that if companies permanently need fewer workers, the Fed cannot simply cut interest rates to force joblessness back down without risking inflation or policy mistakes. Bostic argues that structural labor shifts require policymakers to accept new economic realities rather than rely on traditional monetary tools. He also emphasizes that the Fed must continue examining how different demographic groups experience the labor market, even as political pressure around these issues intensifies.
See "Bostic says Fed cannot offset possible rise in structural unemployment", Howard Schneider, Reuters, February 25, 2026