I often say that being the Atlanta Fed president is the best job I’ve had. Among the things I love about my job is that it’s never dull. I get to talk to people from numerous walks of life all over the Southeast and the country and learn from their interesting perspectives about how the economy is and is not working for them. And tracking the US economy is endlessly fascinating because it’s always changing, so there is always something new to learn.
The flip side is there’s always something to fret over. I often say that I get paid to worry, and, though I usually say it jokingly, there is real truth to that.
So, where is my attention, or worry, focused these days? Let me communicate that by relating three messages that encapsulate my monetary policy stance in this moment.
But before I get into that, you already know that the Federal Open Market Committee decides on monetary policy, most notably by setting the federal funds rate, which influences various market interest rates including those that lenders assess for auto loans, mortgages, and business loans. You may not know that the roster of voting Committee participants shifts every year. This year, I’m on the roster of voters, which is a distinct privilege. But that reality doesn’t change the fact that in this message I speak only for myself and not anyone else on the Committee.
Inflation has slowed but risks remain
Message one begins with price stability. Inflation decelerated more quickly than even optimists expected over the past year, declining from over 5 percent to 2.6 percent during 2023, as measured by the Fed’s preferred yardstick, the Personal Consumption Expenditures (PCE) price index.
I believe inflation is on track to slowly return to the Committee’s 2 percent objective, alongside a strong labor market and expanding economic activity. That’s unusual. Typically, unemployment rises when the Fed tightens monetary policy to subdue…
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