The National and Regional Economy: Navigating Near-term Changes and Long-term Challenges
January 19, 2023
Housing, Place, and Flexible Work: The Future of the New England Economy
Federal Reserve Bank of Boston
Takeaways from Boston Fed President Susan M. Collins’ January 19, 2023 Remarks
- Restoring price stability remains the imperative for monetary policymakers, and there is more work to do. I anticipate the need for further rate increases, perhaps at a slower pace, depending on incoming data, before holding rates at a sufficiently restrictive level for some time. More measured rate adjustments will better enable us to address the competing risks that monetary policy now faces.
- While realistic about the risks and uncertainties, I remain reasonably optimistic that there is a pathway to reducing inflation without a significant economic downturn. I see ongoing resilience in the economy, evidenced by many firms’ continued hiring plans, and household and business spending that is holding up relatively well.
- New England’s economy has many strengths to nurture, and some key challenges to address. This is an opportunity to take stock, look ahead, and assess long-term trajectories, opportunities, and imperatives – especially related to the availability of both workers and housing.
- The Fed’s mandate and mission involve an economy with opportunities for all – but outcomes persistently differ in certain places, and for certain people or groups. The region’s economy is healthiest when it’s providing opportunities for all to contribute and prosper, not leaving some people and places behind. Today’s conference will explore the challenges – and opportunities – presented by the post-pandemic economy for New Englanders.
- Since 2014, the Boston Fed has been leading promising work focused on encouraging local efforts to find economic resurgence – in smaller cities where manufacturing once flourished, and rural areas facing challenges. We call it the Working Places Challenge – and the model is proving effective.
- “Working Places” is based on research that showed a key to resilience, through waves of economic change and challenge, is cross-sector collaboration among local individuals willing to take on shared leadership. The program is structured as a competition for grant money (not from the Fed but from the private sector, philanthropy, and states). Local leaders are building cross-sector vision and priorities, and working on them together. It helps communities weave together many small individual approaches into one, coherent system – and then improve the system. The Fed hosts, convenes, and supports these efforts.
- Working Places helps the Fed encourage economic progress in local economies, grounded in our mission of a vibrant and inclusive economy, and our mandate to achieve price stability and maximum employment – for all not just some. It is one example of strategic partnerships the Boston Fed creates to improve New England’s economy. Like other community development efforts of the Boston Fed, it complements our monetary policy, research, payments, and supervision work as we seek to fulfill our mission and mandate.