Views
Opinion column
by Murrel Bland
As economic times continue to improve, the Board of Governors of the Federal Reserve System will be increasing interest rates and selling securities that it purchased during the recent recession.
That was the message that Esther George delivered when she spoke to the Congressional Forum at a luncheon of the Congressional Forum Friday, Feb. 16, at Children’s Mercy Park, Kansas City, Kansas. About 75 business and governmental leaders attended.
George is the president of the Federal Reserve Bank of Kansas City, a position that she has held since 2011. She has been with the Federal Reserve since 1982, serving in various positons including those charged with regulation and risk management. She is responsible for about 1,600 employees.
George cited the low rate of unemployment—about 4 percent—and consumer confidence represented in increased spending as reasons that the economy is improving. She also mentioned that nearly 3 percent growth rate of the economy as another reason for an optimistic outlook.
George explained that the Federal Reserve System is divided into 12 districts. The Kansas City (Tenth) Branch includes the states of Kansas, Nebraska, Oklahoma, Colorado, Wyoming, Western Missouri and Northern New Mexico. Congress established The Federal Reserve in 1913 after a series of financial panics, particularly the one in 1907. She said three objectives of the Federal Reserve are to maximum employment, stable prices and moderate long-term interest rates.
George said it will be important for the Federal Reserve’s monetary policy to keep inflation at a reasonable rate. She said concerns that she sees includes a shortage of skilled workers and the rate of worker productivity that is only half of what it was in the 1990s.
The Federal Reserve, during the recent recession, purchased large-scale assets. That resulted in a $4.5 trillion balance sheet. Now that times are better, it is time to start reducing these assets. Those assets represent about 25 percent of the gross domestic product, compared to only 6 percent in 2007.
The Kansas City, Kansas, Area Chamber of Commerce sponsors the Congressional Forum. The next meeting will be at 11:30 a.m. Friday, March 16, at Children’s Mercy Park. Kansas. Kansas Gov. Jeff Colyer will be the featured speaker.
Murrel Bland is the former editor of The Wyandotte West and The Piper Press. He is the executive director of Business West.