For the last few years, I’ve served as one of the directors of the Federal Reserve Bank of Atlanta’s Birmingham Branch. This country is fortunate to have a strong central bank. When congress founded the Fed in 1913, it was explicitly stated that goals should be “maximum employment, stable prices and moderate long-term interest rates.” Beyond this, the Fed’s goals are often further described as a “dual mandate” to achieve stable prices and also maximum employment. Our Federal Reserve operates across 12 different districts in the U.S.
I recently had the opportunity to discuss interest rates with WBRC, specifically in regard to the recent .25% rate hike. You can see that interview here.
Speaking personally, I have always thought that action by the FOMC is kind of like adjusting the direction of a huge battleship flotilla. A small twist can make a big impact on trajectory, so care and data mining are important. With the exception of a couple of years in the last decade, we’ve been cruising along at less than a 2% inflation rate. The goal is at least 2%. Hopefully, in a few quarters, our current inflation rate will moderate.