Karen Gilmore - Federal Reserve Bank of Atlanta, October 2015

Quasi-Governmental Nature of the Fed

• A federal structure
• Political independence
• Congress and the Fed

The Fed’s Dual Mandate

• The Fed is pursuing two objectives as given to us by Congress—maximum employment and price stability.
• The maximum level of employment is largely determined by nonmonetary factors that affect the structure and dynamics of the job market, although a stronger economy does help with job creation.
• The FOMC has chosen an inflation target of two percent year-over-year growth over the longer term.

Board of Governors

• Seven members
• Appointed by U.S. President and confirmed by Senate
• Staggered 14-year terms
• * Current Nominations: Kathryn M. Dominguez and Allan R. Landon

Federal Open Market Committee (FOMC)

• Seven governors
• Five presidents (New York and four others on a rotating basis)

•  Nonvoting presidents participate fully

Regional Economic Information Network (REIN)

Created to enhance Bank’s knowledge of Southeast economy

• Regional Executive
• Board of Directors
• Advisory Councils
• Business Contacts

Unemployment and Labor Force Participation Rates

Measures of Labor Utilization

Wage Measures

Personal Consumption Expenditure (PCE) Price Index

Contributions to Real GDP Growth

Headwinds…

• Global geo-political issues 
• Global economic risks 
• Financial Market Volatility
• Strength of the dollar against other currencies
• Depreciation in the price of oil
• Mother Nature 

How will these trends and prospective headwinds influence the FOMC’s decision to move on interest rates? 

Summary of the Economic Environment, The September 2015 FOMC Policy Statement

• Information received since the Federal Open Market Committee met in September suggests that economic activity is expanding at a moderate pace.
• Household spending and business fixed investment have been increasing moderately, and the housing sector has improved further; however, net exports have been soft.
• The labor market continued to improve, with solid job gains and declining unemployment. On balance, labor market indicators show that underutilization of labor resources has diminished since early this year. 
• Inflation has continued to run below the Committee's longer-run objective, partly reflecting declines in energy prices and in prices of non-energy imports. 

Policy Normalization

Steps to raise the federal funds rate and other short-term interest rates to more normal levels and reduce the Federal Reserve's securities holdings.

 Federal Reserve Assets (Uses of Funds)