08.26.2016

JACKSON HOLE, Wyoming – In an unprecedented on-the-record conversation in Jackson Hole, Wyoming, that became at times contentious, ten of the Federal Reserve’s most powerful policymakers sought to reassure activists representing low-income communities of color that they were sensitive to their concerns.

Community activists posed hard-hitting questions to the Fed leaders about monetary policy, Fed governance, and lack of diversity at the central bank. The eight regional Federal Reserve presidents and two Fed Governors met with members of the Fed Up coalition in a basement conference room at the Jackson Lake Lodge shortly before the beginning of the annual Federal Reserve symposium. Full video of the event is available here.

Sitting shoulder-to-shoulder with and interspersed among a dozen mostly Black and Latino community activists, the ten Fed leaders - most of them dressed in casual attire - presented a historical image of a once impenetrable institution engaging in dialogue with the communities hardest hit by its policies.

The officials in attendance were Fed presidents  William Dudley (New York), Esther George (Kansas City), Robert Kaplan (Dallas), Neel Kashkari (Minneapolis), Loretta Mester (Cleveland), Eric Rosengren (Boston), John Williams (San Francisco), Jeffrey Lacker (Richmond); and Governors Lael Brainard and Stanley Fischer, whose appearance came as a surprise as he was not slated to attend the event.

Kendra Brooks, a community leader from Action United in Pennsylvania, kicked off the discussion by asking why the Fed’s leadership ranks are dominated by white males from the financial sector.

Bill Dudley, president of the New York Federal Reserve, said the Fed was “pretty lousy” on issues of diversity. “I would be surprised if anyone at the Fed thinks we’ve done well on diversity. It’s not just about fairness but getting different perspectives and views to get better outcomes,” he said.

Other policymakers agreed more needs to be done to appoint more women and people of color to leadership positions. Governor Brainard referenced a slate of candidates proposed by the Fed Up coalition to become Class C directors at the regional banks: “We appreciate the list you put together, we want to have candidates that look like America. We will be looking at those as well as recommendations from other places.”

Rod Adams, a community organizer from Neighborhoods Organizing for Change in Minnesota, asked why the Fed is considering raising interest rates when communities of color are still struggling with high unemployment and low wages. “Our communities are being sacrificed for an inflation enemy that isn’t here,” he said.

Fed policymakers were skittish about the direction of monetary policy. John Williams, president of the San Francisco Federal Reserve, said waiting too long to raise interest rates could throw the economy “out of whack.” He said, “It takes a couple of years for monetary policy to have its full effect on the economy and if we wait too long, it could lead to a recession.”

Eric Rosengren, president of the Boston Federal Reserve, expressed doubts that monetary policy could address the racial economic disparities raised by the activists. “We’re not sure monetary policy is the best way to solve these problems,” he said.

He echoed the fears of a recession aired by San Francisco President Williams, saying, “We don’t want to allow excesses to build up that could hurt everybody.”

Activists pushed back, arguing there are other available regulatory tools, such as margin requirements, that can manage the excess concerning Fed officials without slowing down the economy as a whole. Vice Chair Fischer insisted that interest rates are the Fed’s only tool to manage asset bubbles, failing to mention that margin requirements were considered by the Fed earlier this year.

In one of the more heated exchanges of the discussion, Fed Up campaign director Ady Barkan characterized the Fed’s line of thinking as, “We’re going to slow down the economy now so we won’t have to slow it down later.”

Esther George, president of the Kansas City Federal Reserve, which hosts the annual Fed symposium, concluded the event by saying, “We are listening. It’s extremely important that this institution is grounded in communities.”

Since its launch in the fall of 2014, the Fed Up coalition has sought to transform the national conversation about the Federal Reserve and its role in the American economy by highlighting the lack of racial, gender, and economic sector diversity among Fed leadership ranks and emphasizing the need for genuine full employment.

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www.whatrecovery.org

Fed Up is a coalition of community organizations and labor unions across the country calling on the Federal Reserve to reform its governance and adopt policies that build a strong economy for the American public. The Fed can keep interest rates low, give the economy a fair chance to recover, and prioritize genuine full employment and rising wages for all communities.

www.populardemocracy.org

The Center for Popular Democracy promotes equity, opportunity, and a dynamic democracy in partnership with innovative base-building organizations, organizing networks and alliances, and progressive unions across the country. CPD builds the strength and capacity of democratic organizations to envision and advance a pro-worker, pro-immigrant, racial justice agenda.

Contact:

Anita Jain, ajain@populardemocracy.org, 347-636-9761

Dan Crawford, dcrawford@epi.org, 518-321-4543