14 NOVEMBER / DECEMBER 2021 chain bottlenecks are worked out, these pressures will likely ease, but that could take some time, as some supply chain bottlenecks might continue well into 2022. And therefore, I am concerned that inflation might end up being higher than most expect. I will continue to closely monitor inflation pressures going forward. • On the maximum employment side of our mandate, economic conditions bode well for the achievement of our goal. I expect the unemployment rate to continue to decline, but at a slightly slower rate going forward. But I am concerned about lower labor force participation and will be closely watching it. The most recent reports on employment and anecdotal reports from a wide range of businesses suggest that, even when offering higher wages and signing bonuses, many employers are finding it difficult to fill open positions. History tells us that the longer workers remain out of the workforce, the less likely it is that they will return to employment and the greater the likelihood that they will lose skills and connections with the job market, which could weigh on labor force participation for years to come. The Federal Reserve’s policy tools are useful for promoting a strong job market, but they are not well suited to addressing these harmful effects on labor supply. What concerns you the most about the coming year that community bankers should be aware of? As we see the economy and workforce returning to a more normal state, I would note that the banking system entered into the pandemic in a very strong financial condition, with plenty of capital and liquidity. With this in mind, community banks have continued to perform well throughout the pandemic. And I believe that community bankers will continue to provide a vital source of funding to local businesses, because they live in their communities and understand the needs and conditions of the local economy. More generally, community banks will likely continue to face the same issues that existed prior to the pandemic, including a low interest rate environment, competition from other market participants, shifting market conditions as a result of technological innovation, and pressure to adapt and embrace technology. HB Gov. Bowman’s banking tenure took place at Farmers & Drovers Bank, Council Grove, Kansas. Headquartered on the Santa Fe National Historic Trail, the bank was founded in 1882 by W.H. White, Bowman’s great-great-grandfather.
RkJQdWJsaXNoZXIy MTg3NDExNQ==