Fed officials bracing for cut hear from small businesses and community groups


Federal Reserve Chairman Jerome Powell testifies during a hearing of the United States House Oversight and Reform Subcommittee on the coronavirus crisis at Capitol Hill in Washington, United States on 22 June 2021. Graeme Jennings / Pool via REUTERS / File Photo

September 24 (Reuters) – Days after reaching a broad consensus that labor markets have recovered enough for the Federal Reserve to begin withdrawing support soon, Fed Chairman Jerome Powell heard on Friday a wide range of economic actors on the challenges holding them back during the recovery.

During a virtual event held as a follow-up to the nationwide “Fed Listens” community discussions launched in 2019, Powell and other decision-makers heard from a restaurant owner struggling with hiring, a restaurant manager hotel worried about the slow return of business travel and community leaders concerned about renters and landlords behind on housing payments.

“Most of you are grappling with altered workplaces, from safety protocols whose half-lives are unclear, to fundamental changes in how your industries operate, from what people eat to how they exit. films, ”Powell said at the start of the event, in remarks that did not develop his own outlook for economic or monetary policy. “The business plans have been reworked, the outlook has been revised and the future continues to be fraught with uncertainty.”

Following a two-day Fed meeting on Wednesday, Powell said he believed the economy had mostly hit the Fed’s bar before starting to cut back on monthly asset purchases. , with just one more “reasonably good” monthly employment report needed. before pulling the trigger in November. Read more

But as Fed policymakers head for what half of them expect will be a first interest rate hike next year, they are keen to make sure they don’t repeat the mistakes of the past by withdrawing support too quickly or, conversely, by waiting too long and allowing inflation to set in.

These efforts include the continuation of a series of community discussions that the central bank initiated more than two years ago as it debated how to revamp its approach to monetary policy.

Fed officials heard from business owners and community leaders on Friday about the long-term effects of the pandemic on their businesses and the communities they represent, reminding them of the uneven aspects of the recovery.

Cheetie Kumar, owner of a restaurant in Raleigh, North Carolina, said small business owners struggled to stay afloat after the virus hampered sales.

“There isn’t a lot that a family business can handle,” Kumar said. “We cannot continue to take on debt.”

She also spoke to officials about the hiring challenges she faces as workers worry about the virus, struggle to get child care and change careers.

And Patricia Garcia Duarte, CEO of Trellis, a nonprofit that supports homeowners, expressed concern about the increase in mortgage delinquencies for low to moderate income borrowers, a group made up mostly of minorities. .

“It’s something that we really need to watch and intervene,” said Duarte.

Report by Ann Saphir and Jonnelle Marte; Editing by Andrea Ricci and Chizu Nomiyama

Our Standards: Thomson Reuters Trust Principles.


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