- Federal Reserve officials are paying increasing attention to the central bank's community development activities, which focus on real world economic issues.
- James Bullard, St. Louis Fed President, told us these issues are "very important to the macroeconomy."
It’s not setting interest rates, or regulating the big Wall Street banks. Those are crucial tasks, and the primary function of the US central bank.
But for Patrick Harker, president of the Federal Reserve Bank of Philadelphia, meeting people in his district and learning their stories is the most fulfilling part of the job, Harker said in a recent speech.
Harker, who has made an effort to engage with community leaders in his district since taking office in July 2015, was addressing the Investing in America’s Workforce conference earlier this month. The event was an effort to bring together non-profits, the private sector and Fed experts to address outstanding concerns about the labor market — including those beyond the scope of monetary policy.
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"One of the most impactful parts of being a Fed president, getting to see the real life implications of the data that we all view at the Fed on a daily basis and how it translates, into the lives of people in our district and around the country," Harker said. "
Talking to employers and job seekers and educators just resonates more than a line on a graph.
community and workforce development are "very important to the macroeconomy if you think about American labor markets and how bifurcated they are."
He worries about a growing split between "this professional class of people that go to college and get good jobs and then another, kind of underclass where things don't go so well, they have less opportunity, they get less good jobs, they are out of the labor force more often," Bullard said.
"If we could get running on all cylinders and really using all our talent in the best possible way that would be a great gain for the US economy."
If we could get running on all cylinders and really using all our talent in the best possible way that would be a great gain for the US economy.
The Community Reinvestment Act dates back to the 1970s and was aimed at combatting redlining and exclusion of poorer US communities and neighborhoods.
Still, Bullard, said, while the function "has been expanded some during the time that I’ve been president … if you look at the total budget we’re spending a very small amount on this."
Bullard sees two key roles for the Fed — "a convener" between workers, non-profits, lenders and employers, as well as a reliable source for relevant research and data.
"One of the best things that we can do is get everybody in the room at the same time and all talking to each other. We can’t put money in directly but we can pair people up and get them thinking," he said.