Federal Reserve Board of Governors Update Federal Reserve Governor Miki Bowman addressed attendees on Saturday morning, providing an update from the Board of Governors and sharing insights from the July FOMC meeting. She also joined KBA’s EVP and General Counsel Kathy Taylor, in a panel discussion covering increased capital requirements following the 2023 bank failures, the Fed’s decision to lower the debit interchange cap, the trend of credit unions acquiring banks and the impact of higher interest rates on bank earnings. Governor Bowman highlighted that economic activity continues to expand, though job gains have slowed, and inflation remains somewhat elevated despite recent easing. The FOMC decided to maintain the current federal funds rate, focusing on achieving maximum employment and stable inflation. The Committee does not expect to lower rates until there is confidence that inflation is moving sustainably toward 2%. Governor Bowman, who holds the Community Bank Seat on the Board of Governors, will serve in this role until January 2034. Federal Reserve Governor Miki Bowman The Economy in 2024 The conference concluded with a presentation by Chris Low, Chief Economist for FHN Financial. Chris highlighted that GDP growth (2.0%) has been weaker than in 2023 (3.1%), with domestic demand cooling and high mortgage rates limiting supply, which has kept prices high despite a slump in sales. He also noted that job growth has slowed since March, and average hourly earnings are declining rapidly. When discussing inflation, Chris pointed out that there has been some progress, with May and June’s CPI readings being the lowest since 2021 and rent inflation showing signs of slowing. He also referenced recent comments from Fed Chair Powell that suggested a possible rate cut in September. Low concluded with market expectations and predictions, indicating that multiple rate cuts could occur over the next few meetings, with the potential for one significant cut, as employment is now the primary reason for reducing rates. Chris Low, FHN Financial 14
RkJQdWJsaXNoZXIy ODQxMjUw