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Speech
2025 Economic Outlook
A strong but choosier consumer, coupled with a better-valued, more productive workforce has landed the economy in a good place.My baseline outlook is good. How economic policy uncertainty resolves will matter. But, with what we know today, I expect more upside than downside in terms of growth. I see more risk on the inflation side.The Fed remains well-positioned regardless of how the economy develops. Were employment to falter or inflation to re-emerge, we have the tools to respond.
Speech
Perspectives on the Economic Outlook and Monetary Policy. University of Pittsburgh Joseph M. Katz Graduate School of Business and Deloitte LLP, Pittsburgh, PA
Let me begin by thanking Dean Arjang Assad of the Katz Graduate School of Business and Dmitri Shiry of Deloitte for inviting me to speak with you this evening. Dmitri performs important public service as a member of the board of directors of the Cleveland Fed?s Pittsburgh Branch, and it just so happens that this building formerly housed our branch. The regional nature of the Federal Reserve has served the country well for more than 100 years. It allows monetary policy decisions to take into account the diversity of the American economy and its people and helps ensure that those decisions ...
Speech
The Economic Outlook and Monetary Policy 09.28.16 Greater Cleveland Partnership Middle-Market Forum, Cleveland, OH
It is a pleasure to welcome you to the Federal Reserve Bank of Cleveland. Since my arrival in Cleveland over two years ago, I have seen first-hand the important role that the Greater Cleveland Partnership plays in supporting the growth of our regional economy and I am very proud to serve on its board. Of course, as president of one of the country?s 12 Federal Reserve Banks I have a keen interest in our regional economy. As we gather in the lobby of this historic building, it is hard not to think back to a time more than 100 years ago and applaud the Congressmen ? yes, they were all men back ...
Working Paper
Growth and Welfare Gains from Financial Integration Under Model Uncertainty
We build a robustness (RB) version of the Obstfeld (1994) model to study the effects of financial integration on growth and welfare. Our model can account for the empirically observed heterogeneity in the relationship between growth and volatility for different countries. The calibrated model shows that financial integration leads to significantly larger gains in growth and welfare for advanced countries than developing countries, with some developing countries experiencing growth and welfare loss in financial integration. Our analytical solutions help uncover the key mechanisms by which this ...
COVID-19: What Do FREDcast Users Think about Economic Growth?
Professional forecasts abound, but what does the general public think will happen with the economy?
Speech
How You Might Look at Recent Data
Contrary to most forecasts, including my own, the economy finished 2023 strong. But early 2024 data has been a little less encouraging.It raises the question of whether we are seeing a real shift in the economic outlook, or merely a bump along the way.We are all looking at the same data, but it is easy to come away with different conclusions. What do I see?On demand, the historic strength of today’s labor market makes a strong case that we are not in a recession today, but I have to believe all this tightening will eventually slow the economy further.On inflation, while I do hear ...
Speech
Is a Recession Around the Corner?
Along many dimensions the economy looks quite healthy. The labor market is very strong. And although GDP growth is slowing, it appears we are converging to trend rather than underperforming versus our potential.Several leading indicators point to continued economic growth, including consumer confidence, consumer spending and initial claims for unemployment insurance.Historically, an inverted yield curve has predicted recession. However, it’s likely that the signal sent by the yield curve has changed as a result of declining term premiums and international demand for U.S. Treasuries.Some ...
Briefing
Impacts of Government Spending Changes on Local Economies
Local multipliers measure how an economic shock in a specific region (such as a change in federal government spending in that region) affects the local economy.Based on our survey of studies, a reasonable estimate range for local fiscal multipliers is:An income multiplier of 1.3-2.0, or an additional $1 of government spending increasing local GDP by 1.3 to 2.0 times.An employment multiplier of 10-30 jobs in the local economy for every additional $1 million in government spending (or $33,000 to $100,000 per job).
Journal Article
President's Message: How Do Small Towns Grow?
Following the Great Recession, the dominant narrative around rural communities has been one of population loss: opportunities are few, so kids leave small hometowns behind. No one moves in to replace them. And a sad but real demographic reality is that an older population means larger natural population losses, as well.
Briefing
Five Decades of Decline: U.S. Construction Sector Productivity
Construction labor productivity fell by more than 30 percent from 1970 to 2020, while overall U.S. economic productivity doubled over the same period.Despite potential biases in price deflators, multiple studies confirm that the productivity decline is real, with physical measures like housing units per worker showing similar stagnation.Increasing land-use regulations may be a plausible cause for the decline, as more strict land-use regulations disincentivize construction companies from pursuing larger projects, keeping them relatively small. In addition, this reduces incentives for ...