We often hear news reports about decisions of the FOMC (Federal Open Market Committee) but are rarely in the presence of a committee member to learn about the goals and work of the group. Kudos to the Forum of Executive Women for hosting Lara Rhame, Chief U.S. Economist for FS Investments, interviewing Loretta J Mester, President and Chief Executive Officer of the Federal Reserve Bank of Cleveland.
Mester’s perspective on current economic conditions was refreshing and confidence-inspiring in a variety of ways, three of which include:
- We are enjoying maximum employment.
- Prices are relatively stable with inflation hovering around 2%.
- Consumer spending, the driver of 70% of our economy, remains strong.
Mester made it clear that when the FOMC meets, their analysis goes beyond the current indicators of economic health; they also identify risks. While economic conditions are good overall, a primary risk we face today is that business investment is weak. The flurry of uncertainty—”to tariff or not to tariff” for example—has contributed to businesses holding back on investing.