Fed Listens Event summary in 250 words (Sept 23, 2022)

A few quick lines about the Fed’s panel today. These things are fairly laborious to watch, and I can’t imagine how bad it would be to read over a long summary of the event. Still, listening what the Chair and FOMC is hearing from businesses offers a bit of guidance as to Fed’s view of the economy. That’s important because the FOMC is steering the ship.

· Businesses are still suffering from instability within supply chains and the labor market. Supply chains are being impacted by a number of factors associated with the pandemic and labor shortage.

· Some sectors are having a harder time than others hiring and retaining workers. In some situations, this is because business is having to raise compensation high enough to compete with work from home positions.

· Almost unanimously, the panelists said they don’t view falling demand as a materially debilitating thing.

In aggregate, this echoes the Chair Powell’s stance that the economy is strong and resilient enough to absorb a drop in demand. It also reiterates why price stability is so important because as inflation cools, people won’t be forced to move jobs as often, making wages stickier. This stable labor curve will help bring stability to supply chains. The world recovering from the pandemic will also help the supply chain issues.

It is my opinion that today’s discussion helped cement the view of a positive real rate curve and a target FFR range of 4% within the time frame the discussed Wednesday.