Full Transcript for The Fed Explained: What Every Business Owner Should Know With Shari Bower

00:02:52.469 --> 00:02:52.949 That's different. 00:02:53.430 --> 00:02:54.150 It's not the same thing. 00:02:54.150 --> 00:03:00.550 They have very specific responsibilities, but yes, the FDIC is in place to provide an insurance if you vote for your deposit. 00:03:00.550 --> 00:03:06.629 So a similar similar idea where have um uh different responsibilities than the FDIC, but yes. 00:03:07.030 --> 00:03:07.430 Got it. 00:03:07.430 --> 00:03:17.109 So it was kind of like the answer to we needed an organization around to stop this craziness or people being panicked kind of thing. 00:03:20.789 --> 00:03:25.590 Um that was providing you know safety and soundness, regulation, uh, all sorts of things. 00:03:25.590 --> 00:03:28.229 But yeah, essentially to give the public confidence in their banks. 00:03:28.229 --> 00:03:33.430 And if something did happen, that there was an authority that was overseeing the banks and that would step in and protect them. 00:03:34.069 --> 00:03:41.750 So, what are the modern day activities of what the I'll call it the Fed, what the Fed does today. 00:03:42.310 --> 00:03:42.629 Yes. 00:03:42.789 --> 00:03:43.669 I have to be careful. 00:03:43.669 --> 00:03:49.109 Sometimes I people ask where I work, and I'm like, I work at the Fed, and I don't want them to think like I'm a Fed, like the Feds. 00:03:49.109 --> 00:03:50.469 Right, exactly. 00:03:50.469 --> 00:03:54.870 Because that's that's what we're thinking, but I guess the Federal Reserve. 00:03:54.870 --> 00:03:59.109 Yes, I do wear a dark suit often, but not that good, not that kind of Fed. 00:03:59.109 --> 00:04:01.830 So yeah, so we perform really five key functions. 00:04:01.830 --> 00:04:06.629 So the one I'm gonna talk most about today is conducting our nation's monetary policy. 00:04:06.629 --> 00:04:09.430 We also promote financial system stability. 00:04:09.430 --> 00:04:13.109 So a lot of that is just around monitoring and analysis. 00:04:13.109 --> 00:04:17.830 We supervise and regulate financial institutions, so those are the banks. 00:04:17.830 --> 00:04:19.430 Um and we work closely with some. 00:04:19.430 --> 00:04:21.029 There are a few agencies that do that. 00:04:21.029 --> 00:04:32.949 So you like you mentioned the FDIC, we work closely with them, with our state banking regulators, and also with the OCC, who's the Office of the Controller of the Currency, that also does um supervision for financial institutions. 00:04:32.949 --> 00:04:37.430 Then we also foster payment and settlement system safety and efficiency. 00:04:37.430 --> 00:04:40.870 And this one I feel like not as many people know about, and it's kind of interesting. 00:04:40.870 --> 00:04:45.189 So we circulate currency and coin for our banking institutions. 00:04:45.189 --> 00:04:47.430 We actually process and clear checks. 00:04:47.430 --> 00:04:50.310 Um, and that's something that the Atlanta Fed does for the whole system now. 00:04:50.310 --> 00:04:51.990 And yes, people are still writing checks. 00:04:51.990 --> 00:04:59.830 I mean, it has the volume of check processing has declined significantly, but there are still people that use checks, and so we process those. 00:05:00.070 --> 00:05:01.750 So they go through all one place? 00:05:02.149 --> 00:05:02.629 They do. 00:05:02.629 --> 00:05:08.309 There are other private sector um like offerings that clear checks as well, but the Fed also provides that service. 00:05:08.309 --> 00:05:08.789 Wow. 00:05:08.789 --> 00:05:17.590 Uh, we also run something called the ACH or the automated clearinghouse system, and so that processes small value electronic uh credit and debit transactions. 00:05:17.590 --> 00:05:23.990 So, like yourself and other small businesses might use that um for paychecks, uh, social security, right? 00:05:23.990 --> 00:05:24.950 Things like that. 00:05:25.429 --> 00:05:27.509 So it gets cleared through through the Federal Reserve. 00:05:28.230 --> 00:05:28.309 Yes. 00:05:28.309 --> 00:05:34.789 And there is also a private sector uh business that does that as well, but the Fed also provides it. 00:05:34.789 --> 00:05:43.669 Um and then we also process wholesale payments through our system called Fedwire, which is more large value financial transactions among banks, businesses, and individuals. 00:05:43.830 --> 00:05:49.750 Um that it would is that you okay, so that's between banks and other banks as well as bigger businesses. 00:05:50.070 --> 00:05:50.309 Exactly. 00:05:50.309 --> 00:05:54.629 And those are larger volume transactions than what we would typically process through ECH. 00:05:54.629 --> 00:06:01.830 And then we also promote consumer protection and community development, and we do that through research, analysis, and data protection. 00:06:01.830 --> 00:06:08.629 And I actually should add to payments because this is a little bit newer, but we also offer a real-time payment system now called FedY, uh FedNab. 00:06:08.629 --> 00:06:10.230 And what is that? 00:06:10.230 --> 00:06:17.429 Um it's another payment system, but it actually operates um 24-7 so that you can actually process payments real time. 00:06:17.750 --> 00:06:18.470 Oh wow. 00:06:18.470 --> 00:06:18.950 Yeah. 00:06:18.950 --> 00:06:21.750 So this is a lot. 00:06:22.070 --> 00:06:22.549 Yeah. 00:06:23.110 --> 00:06:36.230 That that you guys do that uh, you know, the regular public would not have any idea that the Federal Reserve, because all we see is the day the Federal Reserve German gets on the TV and talks, right? 00:06:36.230 --> 00:06:37.990 That's what we see as consumers. 00:06:38.389 --> 00:06:38.710 Yes. 00:06:38.710 --> 00:06:44.309 Or when a large financial institution runs into trouble, we might do something about that in the news as well. 00:06:44.309 --> 00:06:44.629 Yeah. 00:06:44.870 --> 00:06:45.350 Mm-hmm. 00:06:45.350 --> 00:06:46.470 Exactly. 00:06:46.470 --> 00:06:52.470 So I guess you probably answered how it's structured within that. 00:06:53.269 --> 00:06:53.830

I did not. 00:06:53.830 --> 00:06:54.389 No. 00:06:54.389 --> 00:07:00.230 It's actually a it's an interesting and somewhat more complicated structure than I think people realize. 00:07:00.230 --> 00:07:06.149 So the Fed was actually structured to balance central control with regional representation. 00:07:06.149 --> 00:07:08.470 And I'm not gonna go into like the history of the Fed. 00:07:08.470 --> 00:07:17.029 There's lots of books, and it's actually pretty interesting about the back and forth about how they decided to create the central bank the way that um you know we did and why. 00:07:17.029 --> 00:07:23.110 But essentially, we are a central bank under uh public control, but with many checks and balances. 00:07:23.110 --> 00:07:27.190 And so Congress actually oversees the entire Federal Reserve System. 00:07:27.190 --> 00:07:31.190 Uh, and we have to work within the objectives established by Congress. 00:07:31.190 --> 00:07:55.029 So they also gave the Fed authority to um autonomous autonomously carry out its responsibilities without political pressure, and that independence really allows the Fed to focus on our longer-term economic goals, such as controlling inflation and promoting sustainable growth and full employment, which I'll talk about a little bit more uh later on, but that's really to focus on the overall health of the economy. 00:07:55.029 --> 00:07:57.190 And so the Fed actually has three parts. 00:07:57.190 --> 00:08:05.990 We have the Board of Governors in Washington, D.C., we have the regional reserve banks, there's 12 of them, and then we have the Open Federal Open Markets Committee or FOMC. 00:08:05.990 --> 00:08:11.669 And so they kind of operate independently of the federal government to carry out our responsibilities. 00:08:11.669 --> 00:08:18.149 And so we're kind of this interesting blend of public and private and centralized and decentralized. 00:08:18.149 --> 00:08:24.710 And so I will break this down a little bit more for you about each of those sort of pieces of the Fed, what we what they do. 00:08:24.710 --> 00:08:28.070 So, as I said, we've got the Board of Governors in Washington, DC. 00:08:28.070 --> 00:08:30.710 Uh, we've got seven members on the board of governors. 00:08:30.710 --> 00:08:37.190 They're appointed by the president, uh, but they're actually confirmed by the Senate, and they serve staggered 14-year terms. 00:08:37.190 --> 00:08:41.269 And that board of governors actually oversees the entire Federal Reserve System. 00:08:41.269 --> 00:08:48.149 And those are the 12 reserve banks and their 24 branches, and they are really the operating arms of the Fed. 00:08:48.149 --> 00:08:54.710 So each of those reserve banks kind of operates with own within its own particular geographic area or district of the country. 00:08:54.710 --> 00:09:09.110 So I work for the Atlanta Fed, or the sixth district as we call it, and we cover most of the southeast portion of the country, and we actually have branch offices in Miami, Jacksonville, Birmingham, Nashville, and New Orleans, plus our head office in Atlanta. 00:09:09.110 --> 00:09:18.550 And each of those 12 reserve banks that I mentioned is independently operated with its own president and its own board of directors, and they do different things. 00:09:18.550 --> 00:11:55.899 Uh, but what we have in common is that we are conducting research on the economy, we are supervising the banks that are in our district, and we are providing financial services to those banks and to the US government. 00:11:55.899 --> 00:12:00.700 Um, a fun fact, I mentioned that one of the things that the Fed does is circulate currency. 00:12:00.700 --> 00:12:05.100 And so we actually place that currency that you use to make purchases into circulation. 00:12:05.100 --> 00:12:13.259 So if you look at your bills, each bill actually has a number and a letter on it that denote the Federal Reserve Bank that accounts for that. 00:12:13.259 --> 00:12:23.659 So, for example, if you look at you know a $5 bill and you see um six, it'll have the letter F next to it because F is the sixth letter in the alphabet. 00:12:23.659 --> 00:12:30.059 And that means it appears on the balance sheet for the Federal Reserve Bank of Atlanta, and we are the sixth district. 00:12:30.700 --> 00:12:32.059 That is fascinating. 00:12:32.059 --> 00:12:42.139 I, you know, I think throughout all of this that most people don't know that it's a public-private entity, first and foremost. 00:12:42.139 --> 00:13:03.259 And I find it interesting that it was set up so that you have, I don't remember how many branches you said, but each branch branch has its own board of directors and its own, did you call it president or so each so we've got those called reserve banks, and each of those reserve banks has a president and its own board of directors, and then our branches actually also have boards of directors. 00:13:03.340 --> 00:13:07.980 So, like in Atlanta, the president of the Atlanta Fed is Raphael Bastik. 00:13:07.980 --> 00:13:14.620 Uh Atlanta has a board of directors, and then Miami has a board of directors, Jacksonville has a board of directors, Nashville. 00:13:15.019 --> 00:13:15.419 Interesting. 00:13:15.580 --> 00:13:15.899 Yeah. 00:13:15.980 --> 00:13:17.820 Um it's just a different setup. 00:13:18.139 --> 00:13:23.179 Yeah, and what I um the last arm is also the Federal Open Markets Committee. 00:13:23.179 --> 00:13:24.939 So that's actually a combination. 00:13:24.939 --> 00:13:34.620 So the FOMC is made up of those seven governors that I mentioned that are in DC, and uh the 12 reserve banks, the 12 reserve bank presidents. 00:13:34.620 --> 00:13:38.539 Five of those 12 are voting members on the FOMC, and that rotates. 00:13:38.539 --> 00:13:42.460 And then the New York Fed president has a permanent seat on the FOMC. 00:13:42.460 --> 00:13:49.179 Um, and so they meet regularly about eight times a year to discuss economic conditions and to set monetary

policy. 00:13:49.580 --> 00:13:56.139 And I'm assuming the New York president, that was just kind of set from the beginning where they have the permanent. 00:13:56.139 --> 00:14:03.500 So like stock, are we talking stock market? 00:14:03.500 --> 00:14:04.299 Is that what that is? 00:14:05.259 --> 00:14:07.100 But they buy and sell treasuries for the Fed. 00:14:07.100 --> 00:14:12.620 And so they have they have, you know, sort of one additional responsibility that some of the other reserve banks don't have. 00:14:12.620 --> 00:14:16.139 Um and you know, also because of their location on Wall Street. 00:14:16.139 --> 00:14:23.659 And um, yeah, so they run the bank's um securities and open market operations portfolio and have a permanent permanent vote. 00:14:23.659 --> 00:14:30.460 All of the reserve bank presidents are members of the FOMC, but only six of them get to vote. 00:14:30.460 --> 00:14:34.620 And so five of them rotate, and as I said, the New York Fed has that permanent seat. 00:14:35.100 --> 00:14:38.539 And explain for our listeners what FOMC is. 00:14:38.939 --> 00:14:41.899 So the FOMC is the Federal Open Markets Committee. 00:14:41.899 --> 00:14:50.700 Um, and those are the policymakers that will set um interest rates, which I will talk about when we get to monetary policy in a little bit more detail. 00:14:51.100 --> 00:14:51.820 Wonderful. 00:14:51.820 --> 00:14:59.899 This is so intriguing because there's so many things that go into this that, you know, again, most people don't understand. 00:14:59.899 --> 00:15:03.500 How does monetary policy actually work? 00:15:03.500 --> 00:15:10.379 And what goes into the Fed's decision when when they're making um when they're making the process? 00:15:10.700 --> 00:15:24.220 Yeah, so we have this dual mandate, uh, which I'm sure a lot of people hear about in the news and when our chairman is talking um post the FOMC meetings, and it's around um maximum employment and price stability. 00:15:24.220 --> 00:15:37.820 So price stability is really around inflation, and we want to see inflation remain low and stable over time, because when inflation is low and stable, people can hold money without having to worry that high inflation will erode its purchasing power. 00:15:37.820 --> 00:15:43.580 So, for example, people may hear in the news about the Fed's 2% inflation target. 00:15:43.580 --> 00:15:54.460 And so 2% inflation basically means that on average, a dollar buys 2% fewer goods and services than it did the year before, which seems somewhat manageable. 00:15:54.460 --> 00:16:07.500 But if it was over 7%, uh, you know, which is where we were after the pandemic or in the midst of the pandemic, um, you know, that's much higher than our 2% target. 00:16:07.500 --> 00:16:17.019 And so with stable prices, you really don't have to worry about prices going up and down significantly when making plans, um, or when you're a business when borrowing or lending for long periods, right? 00:16:17.019 --> 00:16:22.700 And so that's that sort of stable prices piece of what we do. 00:16:22.700 --> 00:16:31.580 And then the other component of the mandate is around maximum employment, which we really think about as the highest level of employment that the economy can sustain over time. 00:16:31.580 --> 00:16:38.059 So measuring that is a little bit different because we don't have an exact target right now, the way that we do for inflation. 00:16:38.059 --> 00:16:41.340 And things, you know, that business conditions vary over time, right? 00:16:41.340 --> 00:16:48.939 Demographics, you know, labor market regulations, immigration, there are other factors that impact uh the labor market. 00:16:48.939 --> 00:16:59.980 So we really consider a wide, a wide range of employment indicators, whether it's hiring, unemployment, or looking at turnover data data when we're thinking about uh the employment mandate. 00:16:59.980 --> 00:17:11.500 And so the Fed sets their monetary policy to influence short-term interest rates and the overall financial conditions to really help achieve that dual mandate around maximum employment and stable prices. 00:17:11.500 --> 00:17:14.299 And so we do that through something called the federal funds rate. 00:17:14.299 --> 00:17:20.380 And that's the Fed's policy rate, and it's an interest rate specifically for overnight borrowing by banks. 00:17:20.380 --> 00:17:26.380 So the FOMC sets that target rate for the Fed funds rate, and we do it within these upper and lower limits. 00:17:26.380 --> 00:17:33.580 So you will hear, you know, the Fed uh cut or raised by in these 25 basis point increments. 00:17:33.580 --> 00:17:44.059 And so when necessary, we change the stance of monetary policy by raising or lowering that target range for the Fed funds rate, which again is a short-term rate. 00:17:44.059 --> 00:17:54.940 Um now, in theory, other rates kind of normally would follow that, you know, so there are longer-term rates, but that Fed funds rate is really about short-term borrowing. 00:17:54.940 --> 00:18:08.620 And so if we lower that target range, that really represents what we would refer to as an easing of monetary policy, because it's accompanied by lower short-term interest rates in financial markets and sort of loosening of broader financial conditions. 00:18:08.620 --> 00:18:14.940 And so we would typically do that if the economy was a little slow or if inflation was too low. 00:18:14.940 --> 00:18:21.420 And then conversely, we would raise that target range if we would call that tightening of monetary policy. 00:18:21.420 --> 00:18:26.779 And so we would raise rates uh if the economy was kind of overheating or if inflation was too high. 00:18:26.779 --> 00:18:41.259 And like I said, normally that affects changes in other interest rates and in financial conditions more broadly, which in turn should affect spending decisions by households, by businesses, and that sort of has broader implications for activity, employment, and

inflation. 00:18:42.059 --> 00:18:48.380 You do you mentioned something that drew my attention that I'm sure people I don't know what this means. 00:18:48.380 --> 00:18:50.059 So I'm sure other people won't either. 00:18:50.059 --> 00:18:53.980 You mentioned something about overnight borrowing from banks. 00:18:54.140 --> 00:18:58.700 Is that so banks will borrow from each other overnight and they charge each other to borrow? 00:18:59.180 --> 00:18:59.900 Oh, interesting. 00:18:59.900 --> 00:19:02.140 To cover whatever they had from the day before kind of thing. 00:19:02.380 --> 00:19:02.620 Exactly. 00:19:02.620 --> 00:19:02.860 Yeah. 00:19:02.860 --> 00:19:05.820 And so they charge they they charge each other a certain rate. 00:19:05.820 --> 00:19:11.259 And so that Fed funds rate that we're targeting is to target that rate for overnight borrowing. 00:19:11.259 --> 00:19:20.299 So either making it more expensive for them to borrow from each other or less expensive, which in turn impacts what they charge consumers and businesses to borrow from them. 00:19:20.860 --> 00:19:21.500 Got it. 00:19:21.500 --> 00:19:22.620 That makes sense. 00:19:22.779 --> 00:19:22.940 Yeah. 00:19:23.259 --> 00:19:31.340 So I'm curious, Sherry, with your position that you have at the at the Federal Reserve, where do you fit in with all of this? 00:19:31.340 --> 00:19:34.140 Where does your position lie? 00:19:35.019 --> 00:19:40.620 So a lot actually goes into that monetary policy process, right? 00:19:40.620 --> 00:19:46.299 So the Fed uses kind of this comprehensive approach to data collection and analysis to make their policy decisions. 00:19:46.299 --> 00:19:53.019 So they monitor a wide range of economic indicators, surveys, financial market data, international conditions. 00:19:53.019 --> 00:19:58.380 They've got teams of economists and analysts sort of gathering and analyzing the data. 00:19:58.380 --> 00:20:07.020 And before each FOMC meeting, um, we have researchers look at sort of key surveys, and they kind of interpret all of this information. 00:20:07.020 --> 00:20:14.380 So we've got the data connection collection, we've got the analysis, we have discussion, and then there's that policy decision. 00:20:14.380 --> 00:20:17.260 And so, and then there's communication, right? 00:20:17.260 --> 00:20:24.780 So after each meeting, now the chairman and the chairperson of the Fed provides a statement and has a press conference and answers questions. 00:20:24.780 --> 00:20:37.580 And then even in between meetings, you will see the Federal Reserve presidents and the various governors making speeches about all kinds of things related to the Fed, monetary policy, regulation, you know, artificial intelligence, all sorts of things. 00:20:37.580 --> 00:20:45.580 So my role at the Fed is I am the regional executive uh based in Miami for the Federal Reserve Bank of Atlanta. 00:20:45.580 --> 00:20:47.420 So I'm part of our research division. 00:20:47.420 --> 00:20:52.700 And we have a regional executive at each of those other branches that I mentioned across the Southeast. 00:20:52.700 --> 00:21:09.900 And essentially they created our team back during the 2008 financial crisis because our president at the time and our head of uh research identified that there was really a need to complement the economic data that they were getting with sort of more real-time holistic information from businesses. 00:21:09.900 --> 00:21:20.620 And so they created this team whose sole responsibility was to have boots on the ground in the communities that we're serving, talking to business leaders about economic conditions and what they're doing. 00:21:20.620 --> 00:21:27.660 And it really helps us to paint a broader picture than we can with sort of your typical data and statistics alone. 00:21:27.660 --> 00:21:29.740 And it also helps us identify trends. 00:21:29.740 --> 00:21:34.140 So a lot of times we are hearing things from businesses well before you will see it in the data. 00:21:34.140 --> 00:21:38.300 So the data is often very backward looking, monetary policy is forward-looking. 00:21:38.300 --> 00:21:43.980 I've heard you know, some of our economists talk about it as like trying to drive a car by only looking in the rearview mirror. 00:21:43.980 --> 00:21:45.580 Um, that's really difficult. 00:21:45.580 --> 00:21:51.740 And you can imagine in times of crises, getting information from businesses about you know, are you hiring? 00:21:51.740 --> 00:21:55.900 How are um borrowing costs impacting your capex and investment decisions? 00:21:55.900 --> 00:21:57.580 What are you seeing with prices? 00:21:57.580 --> 00:22:02.060 Or are you seeing cost increases and are you planning to pass those through to customers? 00:22:02.060 --> 00:22:03.580 Are you planning layoffs? 00:22:03.580 --> 00:22:09.980 Really important information that really, again, helps us identify trends oftentimes before we see it in the data. 00:22:09.980 --> 00:22:15.340 And what I love about what I do is that this is not just a check the box for us. 00:22:15.340 --> 00:22:18.540 Uh, you know, this we have a direct line to our president. 00:22:18.540 --> 00:22:29.100 He really values the information, our economists value the information, and we brief him together with the economist so he really gets a sense of here's what we're seeing in the data, here's what we're hearing from the businesses. 00:22:29.100 --> 00:22:36.140 The questions that we're asking our business contacts are informed by what our economists are talking about, what they're interested in, what they're seeing. 00:22:36.140 --> 00:22:44.060 And so it's a really nice sort of symbiotic relationship, and it really does provide a really good real-time holistic picture of what's happening in the economy. 00:22:44.060 --> 00:22:46.220 And uh it's really valuable. 00:22:46.620 --> 00:22:56.780 I would say it would be because you're really getting to talk to the people who are affected by it

immediately in real time, so you know what to report back. 00:22:56.780 --> 00:23:04.460 And it's not just numbers, it's not just a set of data that you don't have a face to or an emotion to, right? 00:23:04.460 --> 00:23:07.020 It's you're giving them information that's valuable. 00:23:07.020 --> 00:23:08.060 I think that's wonderful. 00:23:08.300 --> 00:23:08.380 Yeah. 00:23:08.620 --> 00:23:10.300 You know, you mentioned Go ahead. 00:23:10.300 --> 00:23:14.780 No, I was gonna say we really try and talk to a range of businesses. 00:23:14.780 --> 00:23:35.980 So we obviously touch all the large employers based in the Southeast, but we also talk to small and mid-sized businesses, and we try to cover a range of industries, whether it's retail, manufacturing, you know, financial, health, nonprofits, uh, you know, you name it, anyone that's sort of willing to sit down and chat with us about what they're seeing and what they're doing is is helpful, and we appreciate the insights and the expertise. 00:23:36.300 --> 00:23:38.140 It's great because you're doing across all sectors. 00:23:38.140 --> 00:23:42.700 It's not just siloed into one particular segment of the economy. 00:23:42.700 --> 00:23:47.420 So you had mentioned something about, you know, in in times of economic crisis. 00:23:47.420 --> 00:23:57.500 I'm curious, how does the Federal Reserve spawn respond during times of economic crises and what resources does it actually offer to small businesses? 00:23:57.500 --> 00:24:05.100 Because I'm sure many of the small businesses that are listening are like, okay, this is great, but you know, how how do they help us? 00:24:05.420 --> 00:24:05.740 Yeah. 00:24:05.900 --> 00:24:13.340 So as I mentioned earlier, the Fed may cut interest rates to make borrowing cheaper and encouraging, encourage spending and investment. 00:24:13.340 --> 00:24:22.860 They also may engage in something called QE or quantitative easing, which really is about increasing the money supply and stimulating economic activity that way. 00:24:22.860 --> 00:24:31.900 It's just another tool we sort of have in our back pockets, if you will, where we buy and sell treasuries and securities in order to inject more liquidity into the financial system. 00:24:31.900 --> 00:24:35.740 And that also helps sort of push down longer-term borrowing rates. 00:24:35.740 --> 00:24:36.060 Okay. 00:24:36.060 --> 00:24:45.980 And then banks, so our member banks, can borrow directly from the Fed when the markets are stressed so that they are able to keep lending to businesses. 00:24:45.980 --> 00:24:54.060 And then in times of crises, we can also establish special lending facilities to ensure that credit continues to flow to businesses and households. 00:24:54.060 --> 00:25:02.140 So, for example, during the COVID 19 pandemic, the Fed created some programs to support small and medium businesses through loans and other financial assistance. 00:25:02.140 --> 00:25:11.740 And then I would say we also use our

communications to sort of reassure public the public and businesses, kind of just helping to maintain confidence in the financial system. 00:25:11.740 --> 00:25:13.900 So we communicate policy actions to the public. 00:25:13.900 --> 00:25:22.300 We talked about, you know, the FOMC press releases, statements, and uh the reserve bank presidents and governors making speeches in between those meetings. 00:25:22.300 --> 00:25:28.460 And so essentially our role is really to keep credit flowing, to stabilize the markets, uh, and to restore confidence. 00:25:28.460 --> 00:25:36.380 Now, in terms of resources for small businesses, we typically don't lend directly to small businesses, but we do have a lot of great resources for them. 00:25:36.380 --> 00:25:42.220 So I was I was looking at this data before we started chatting. 00:25:42.220 --> 00:25:50.860 And so in Florida alone, there were three and a half million small businesses last year that represent 99.8% of all Florida businesses. 00:25:50.860 --> 00:25:53.900 So that's businesses with 500 employees and less. 00:25:53.900 --> 00:25:54.300 Yeah. 00:25:54.300 --> 00:25:56.300 Talk about backbone. 00:25:56.300 --> 00:25:57.020 Yeah. 00:25:57.020 --> 00:26:01.420 And they employ about 3.8 million people or 40% of Florida's workforce. 00:26:01.420 --> 00:26:02.300 Wow. 00:26:02.300 --> 00:26:02.780 Yeah. 00:26:02.780 --> 00:26:04.540 So not small peanuts, right? 00:26:04.540 --> 00:26:10.700 Uh a vital part of the American economy, um, and really providing a driving force for job creation, which is really important. 00:26:10.700 --> 00:26:17.660 So the Atlanta Fed actually has a strategic priority on economic mobil mobility and resilience. 00:26:17.660 --> 00:26:26.300 Really, so really understanding small business conditions, you know, and performance remain a really important part of our community and economic development team's work. 00:26:26.300 --> 00:26:29.420 And you can find some of their research on our website. 00:26:29.420 --> 00:26:33.900 Like they did a partner update during COVID about how small businesses were faring. 00:26:33.900 --> 00:26:39.340 And we also, the Federal Reserve also runs the Small Business Credit Survey or SBCS. 00:26:39.340 --> 00:26:43.900 That's a national sample of small businesses for firms with fewer than 500 employees. 00:26:43.900 --> 00:26:49.260 And the aim is to just provide insights into firms' needs and experiences with financing and debt. 00:26:49.260 --> 00:26:52.060 And the results of that get published every year. 00:26:52.060 --> 00:26:53.900 So you can anyone take that? 00:26:54.140 --> 00:26:55.340 Can anyone do that? 00:26:55.740 --> 00:27:00.220 Anyone can participate in the survey, yeah, if you have 500 employees or less. 00:27:00.220 --> 00:27:06.860 And the Atlanta Fed will actually take the results of that survey and publishes information specific to the Southeast. 00:27:06.860 --> 00:27:10.620 So they'll do profiles on certain states and certain counties. 00:27:10.620 --> 00:27:14.220 So we share and summarize summarize the results uh on the website. 00:27:14.220 --> 00:27:23.900 And so you can go on our uh the Atlanta Fed website and find past years reports that sort of offer a view into small business conditions in many southeastern areas. 00:27:24.780 --> 00:27:25.020 Nice. 00:27:25.660 --> 00:27:26.300 Yep. 00:27:27.180 --> 00:27:35.820 So we'll probably be able to publish that link in the show notes so that people can actually go in and take that. 00:27:35.820 --> 00:27:39.820 So with all of this information, it's it's a lot. 00:27:39.820 --> 00:27:45.020 And small business owners are probably like, well, how do I know what's actually happening there? 00:27:45.020 --> 00:27:51.340 How as small business owners can we keep ourselves informed as to what's happening at the Federal Reserve? 00:27:51.660 --> 00:27:51.980 Yeah. 00:27:51.980 --> 00:27:55.340 So I'm just gonna I'll try and it it was a lot. 00:27:55.340 --> 00:27:59.740 My head's spinning and I and I do know this stuff. 00:27:59.740 --> 00:28:01.500 Yeah, it no, it's a lot. 00:28:01.500 --> 00:28:04.300 Uh so it's our Federal Reserve 101. 00:28:04.460 --> 00:28:05.100 That's what it is. 00:28:05.340 --> 00:28:14.780 And we have we have a team, so we have a team that does um in our public affairs, we have folks that do economic education, and they are out there, you know, specifically talking uh primarily with educators. 00:28:14.780 --> 00:28:18.300 So it's kind of educate the educators just about the Fed and what we do. 00:28:18.300 --> 00:28:24.060 So lots of resources wherever you are in any Federal Reserve Bank or the Board of Governors website. 00:28:24.060 --> 00:28:31.020 So if you want to read more and it's easier to read than just listen to me ramble on, and there's lots of information out there about what we do. 00:28:31.020 --> 00:28:41.100 But essentially, you know, what I really want to get across is just that our monetary policy decisions are really important for small businesses and they do have direct and indirect impacts, right? 00:28:41.100 --> 00:28:51.740 So, like I talked about lowering interest rates, it makes interest rates, it makes it cheaper for businesses to borrow money, which encourages investment, you know, in new equipment, expansion hiring. 00:28:51.740 --> 00:28:54.220 And so, you know, those are things that are really important. 00:28:54.220 --> 00:28:58.460 And so I think staying informed about what we do is also important. 00:28:58.460 --> 00:29:01.020 So lots of things that a small business can do. 00:29:01.020 --> 00:29:03.100 You can follow Fed announcements. 00:29:03.100 --> 00:29:09.260 Uh, so again, we regularly regularly release statements following the Federal Open Markets Committee meetings. 00:29:09.260 --> 00:29:15.100 Those meetings are the dates of those meetings are publicly available on the Federal Reserve Board of Governors website. 00:29:15.100 --> 00:29:23.420 And

you can watch the FOMC press conferences, you can hear Powell give a speech, and then you can hear QA with the reporters, which I actually find even more interesting. 00:29:23.420 --> 00:29:31.180 Uh once a quarter, the Board of Governors also produces something called the DOT plot or the summary of economic projections. 00:29:31.180 --> 00:29:35.420 And that is also publicly available on the Board of Governors website. 00:29:35.420 --> 00:29:45.420 And those are sort of, those are not decisions, those are kind of point-in-time projections, and it's called the dot plot because the FOMC members do it across a range of economic indicators. 00:29:45.420 --> 00:29:53.100 So they do it for economic growth through GDP, they do it for inflation, um, for unemployment, for the Fed funds rate. 00:29:53.100 --> 00:29:57.900 And each dot actually represents an FOMC member, which is why it's called the dot plot. 00:29:57.900 --> 00:30:07.420 Um, it doesn't tell you who voted where, sure, but you can see across, again, a range of indicators what their sort of forward-looking thinking is, at least at that point in time. 00:30:07.420 --> 00:30:10.940 So that's once a quarter and that's publicly available on their website. 00:30:10.940 --> 00:30:15.500 Before every FOMC meeting, we published something called the Beige Book. 00:30:15.500 --> 00:30:22.380 And that is actually more of a higher level anecdotal summary of economic conditions across the entire country. 00:30:22.380 --> 00:30:31.420 So that is probably a little bit more easily digestible for a non-economist or you know, your sort of every everyday person. 00:30:31.420 --> 00:30:31.740 Right. 00:30:31.740 --> 00:30:36.060 And that's like I said, that comes out before every FOMC meeting, so eight times a year. 00:30:36.060 --> 00:30:42.140 And then uh the Atlanta Fed actually has a lot of information up on our website. 00:30:42.140 --> 00:30:44.220 And we have something called Economy Now. 00:30:44.220 --> 00:30:48.540 It's an app that you can download on your phone and it tracks all the economic indicators that we look at. 00:30:48.540 --> 00:30:53.980 So uh again, economic growth through um gross domestic product, inflation, unemployment. 00:30:53.980 --> 00:30:57.980 Um, we have a wage growth tracker, so you can download that app and look at our pillows. 00:30:57.980 --> 00:31:03.340 Uh, and all of the Federal Reserve Banks, again, have a wealth of information on their websites that people can look at. 00:31:03.340 --> 00:31:07.100 And I would say just economic reports and podcasts, like following financial news. 00:31:07.100 --> 00:31:15.260 There's lots of great podcasts out there about what's going on in the economy that are, you know, also share sort of timely information. 00:31:15.260 --> 00:31:17.420 And so all of those are great resources. 00:31:17.980 --> 00:31:27.180 So that is actually leading your podcast uh conversation here, is leading me into the final area of our podcast called the Final

Four. 00:31:27.180 --> 00:31:31.820 And I know we were talking earlier, and I'm like, well, what podcast do you listen to? 00:31:31.820 --> 00:31:34.380 Um, so are you ready for the final four? 00:31:34.460 --> 00:31:36.060 It's I'm ready for the final four. 00:31:36.060 --> 00:31:43.420 And this is a great point for what I should have done at the beginning of this, which is the disclaimer that I was supposed to give. 00:31:43.420 --> 00:31:46.380 That all and any views expressed today are my own. 00:31:46.380 --> 00:31:50.700 They are not those of anyone else in the Federal Reserve System or the Federal Reserve Bank of Atlanta. 00:31:50.700 --> 00:31:54.460 Um, the only person that can speak on behalf of the Fed is the chairman. 00:31:54.460 --> 00:31:57.980 And so these are Sherry's views and only Sherry's views. 00:31:57.980 --> 00:31:59.820 All right, Sherry, it's your views. 00:31:59.980 --> 00:32:00.300 We got it. 00:32:00.380 --> 00:32:07.260 Woohoo! And also not getting endorsed for any of my favorite books or podcasts or people or anything else. 00:32:08.780 --> 00:32:09.980 You covered your tracks. 00:32:09.980 --> 00:32:11.100 That's that's awesome. 00:32:11.340 --> 00:32:11.660 Thank you. 00:32:11.900 --> 00:32:16.300 So I these are four questions that I ask every guest that's on my podcast. 00:32:16.300 --> 00:32:19.900 And I've never had the same answer from anyone. 00:32:19.900 --> 00:32:23.260 So, what's your favorite book or podcast? 00:32:23.260 --> 00:32:25.900 And what made it stick with you? 00:32:26.220 --> 00:32:45.500 Okay, so I I struggled with favorite book because here's what I do is I have like nonfiction that I feel like are important to read, either about like, you know, childcare or like economics that I have every intention of reading and I keep on my bed and I start reading. 00:32:45.500 --> 00:32:49.820 But then sometimes when I go to sleep, I just want to unwind and not have to think. 00:32:49.820 --> 00:32:57.100 So I end up reading a lot of um fiction that you know is more to just escape. 00:32:57.100 --> 00:33:03.820 And so, you know, not necessarily books that I would say that you would like or that I would recommend. 00:33:03.820 --> 00:33:05.260 So I'm not gonna go there. 00:33:05.260 --> 00:33:09.420 And instead, I'll go some of the podcasts that I listen to that I just like to stay informed. 00:33:09.420 --> 00:33:11.420 And so there's a few that I find really interesting. 00:33:11.420 --> 00:33:27.660 So Planet Money and the Indicator are great podcasts on NPR that sort of give you kind of like bite-sized information about what's happening in the economy that I think again are really sort of easy listening that you can do uh, you know, on a car ride. 00:33:28.060 --> 00:33:29.100 Well, that's perfect. 00:33:29.100 --> 00:33:30.220 Those are two good ones. 00:33:30.220 --> 00:33:31.340 I wrote those down. 00:33:31.340 --> 00:33:36.860 Do you have a favorite quote or piece of advice that you find yourself

coming back to time and time again? 00:33:37.500 --> 00:33:46.140 So yeah, I would say my favorite piece of advice is just to one, do the things that scare you, which I really try to do. 00:33:46.140 --> 00:33:53.260 I have a lot of anxiety, but I wouldn't be where I was if I sort of didn't push myself outside of my comfort zone. 00:33:53.260 --> 00:33:57.820 Uh and even for this job, I was like, oh, I'm never gonna get it. 00:33:57.820 --> 00:34:00.300 But I said to myself, you know what, just throw your name in the hat. 00:34:00.300 --> 00:34:02.860 Like, you know, express your interest, do the best you can. 00:34:02.860 --> 00:34:03.580 And if you get it, great. 00:34:03.580 --> 00:34:07.340 And if not, and if I had never pushed myself to try that, I wouldn't be where I am. 00:34:07.340 --> 00:34:15.579 And you know, the other piece I would just say is I hear a lot of women talking about like, you know, being supporters and you know, speaking, you know, helping support other women. 00:34:15.579 --> 00:34:17.579 And I would say, go beyond that. 00:34:17.579 --> 00:34:20.460 Don't just be a supporter, sort of be a brag buddy. 00:34:20.460 --> 00:34:27.179 So talk for those women, you know, when they can't be in the room themselves, be there bragging about them and talking about them. 00:34:27.179 --> 00:34:28.780 For me, I think that's really important. 00:34:28.780 --> 00:34:36.619 And again, I wouldn't be where I am if I didn't have the support of a lot of great women in my life who sort of stood up for me when I wasn't in the room and spoke on my back. 00:34:37.579 --> 00:34:38.619 That's really great advice. 00:34:38.619 --> 00:34:41.980 And going back to your first one, do it scared, right? 00:34:41.980 --> 00:34:44.139 Just do the thing. 00:34:44.139 --> 00:34:48.460 What is one habit or practice that's changed your life? 00:34:49.980 --> 00:34:51.659 I would probably say doing yoga. 00:34:51.659 --> 00:34:58.139 I try and make sure that I do yoga once a week if I can, on the weekends. 00:34:58.139 --> 00:35:02.539 I squeeze it in in the morning, and I just find it really grounding. 00:35:02.539 --> 00:35:15.659 And when you sort of have a stressful job and have all your family responsibilities, I just find that it's really important to take that time for yourself and to just really try and find some zen wherever you can. 00:35:16.300 --> 00:35:17.019 Self-care. 00:35:17.260 --> 00:35:17.980 Yes, self-care. 00:35:18.219 --> 00:35:18.940 Self-care. 00:35:18.940 --> 00:35:24.059 And then finally, if you could have dinner with anyone, who would it be and why would you choose them? 00:35:25.019 --> 00:35:30.139 So this was a really hard one, and there's probably a hundred different people that I could pick. 00:35:30.139 --> 00:35:34.059 Uh, but the first person that popped into my mind was Stevie Nix. 00:35:34.059 --> 00:35:35.019 Oh. 00:35:35.019 --> 00:35:39.420 Because I'm hoping that she's listening to your podcast and will invite me to dinner. 00:35:39.420 --> 00:35:43.500 She's actually coming to the Hard Rock for a concert. 00:35:43.500 --> 00:35:53.420 And so, Stevie, if you're listening, um the tickets were really expensive, so I haven't bought them yet, but I'm happy to I'm happy to have dinner with you while you're here. 00:35:53.420 --> 00:36:07.179 But she's just so cool and like has really just had such an amazing career, and I would just love to sit down with her and hear about it and maybe just have a private concert and have her sing to me while we're dining. 00:36:08.139 --> 00:36:10.380 She's definitely stood the test of time. 00:36:10.539 --> 00:36:10.780 Right. 00:36:11.019 --> 00:36:13.659 And you know, it it's just it's timeless music. 00:36:13.659 --> 00:36:14.860 She's wonderful. 00:36:14.860 --> 00:36:15.340 Yeah. 00:36:15.340 --> 00:36:16.300 Oh my goodness. 00:36:16.300 --> 00:36:19.260 Sherry, I have thoroughly enjoyed our time together today. 00:36:19.260 --> 00:36:27.820 You have given us so information on the so much information on the Federal Reserve that I am sure a lot of our listeners are hearing this for the first time. 00:36:27.820 --> 00:36:29.820 So I appreciate that very much. 00:36:29.820 --> 00:36:33.900 If our listeners would like to get in touch with you, how can they do so? 00:36:34.459 --> 00:36:46.939 Yeah, so I will put a link, an email, and a link to our website in the notes from the podcast so that there is a direct connection. 00:36:46.939 --> 00:36:59.019 And like I said, if you're a business owner and you wanna, you're in South Florida or in in across the Southeast and you want to sit down and chat with me or my colleagues and share some of your business insights, we would welcome that. 00:36:59.019 --> 00:37:02.219 And again, appreciate insight, your insights and expertise. 00:37:02.219 --> 00:37:08.059 And I really appreciate you inviting me to be on your podcast and taking the time to sit down with me. 00:37:08.059 --> 00:37:14.619 Um, I hope this wasn't too boring or overwhelming for anybody, and that it did provide some helpful information. 00:37:14.619 --> 00:37:15.499 So thank you. 00:37:15.979 --> 00:37:18.219 It was my pleasure, and thank you so much for being here. 00:37:18.219 --> 00:37:19.899 It provided invaluable information. 00:37:19.899 --> 00:37:22.299 And thank you to all of my listeners.