Atlanta Fed's Bostic talks about AI's effect on labor, Fannie, Freddie's roles in housing

[Federal Reserve Bank of Atlanta, Georgia entrance, facade of regulatory, regulation government building in downtown, midtown]
ablokhin

More businesses are seeing generative AI as a complement to their current labor force, Atlanta Fed President said on Tuesday. However, when companies see an opportunity to replace workers with AI, they do take it, he added.

Bostic said AI is disrupting the entire range of skills. That means some workers will need to develop new skills to stay employed.

"How do you create pathways for people to re-skill?" is a national conversation that needs to take place, he said at an event at Fisk University in Nashville, Tennessee.

Event concludes at 10:53 AM ET.

10:49 AM ET: In discussing the potential release of Fannie Mae (OTCQB:FNMA [https://seekingalpha.com/symbol/FNMA]) and Freddie Mac (OTCQB:FMCC [https://seekingalpha.com/symbol/FMCC]) from government conservatorship, Bostic explained, "The U.S. is quite unique in that it has 30-year mortgages." The government guarantees mortgages because financial institutions are reluctant to lend to individuals for that length of time. The government guarantees, therefore, help to reduce the interest rates that borrowers pay.

Whether it's a good idea or bad idea in privatizing Fannie (OTCQB:FNMA [https://seekingalpha.com/symbol/FNMA]) and Freddie (OTCQB:FMCC [https://seekingalpha.com/symbol/FMCC]) will depend on the distribution of risks between the financial institutions and the government, he said.

10:43 AM ET: On the general economy, "catastrophic outcomes have been taken off the table," he said, as compared with the outlook when tariffs were first announced.

"There's always the possibility" that turbulence can lead to economic retrenchment. "That precautionary activity is taking place," Bostic said. For example, consumers may take a driving vacation, rather than a flying vacation, or trade down to store brands from name brands.

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