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How the Federal Reserve Measures the High Country Economy · Mind Your Business - A Podcast Series produced by the Boone Area Chamber of Commerce

• 0:01
  SPEAKER_02: The Federal Reserve, an agency that deserves more than a passing glance when they pop up in the news cycle.
• 0:07
  SPEAKER_02: From setting interest rates to tracking inflation, the Fed is involved in more of your day-to-day than you may realize.
• 0:15
  SPEAKER_02: From the Boone Area Chamber of Commerce, this is Mind Your Business.
• 0:19
  SPEAKER_01: Mind Your Business, brought to you by Appalachian Commercial Real Estate, providing professional commercial real estate services.
• 0:26
  SPEAKER_01: Visit Appalachian CRE.com.
• 0:30
  SPEAKER_02: Hello and welcome into Mind Your Business.
• 0:32
  SPEAKER_02: I'm David Jackson, President and CEO of the Boone Area Chamber of Commerce.
• 0:36
  SPEAKER_02: Thanks for joining us once again this week, whether through the airwaves of WATA here in Boone, or as a subscriber of the podcast version of this program, which is made possible each week by our good friends at Appalachian Commercial Real Estate.
• 0:48
  SPEAKER_02: If you haven't yet subscribed to the program, not a problem.
• 0:52
  SPEAKER_02: Just search for Mind Your Business wherever you get your podcast.
• 0:55
  SPEAKER_02: There you can gain access to full archives, occasional bonus content, extended episodes, and plenty more as we connect you with the business news that you can use from right here in the mountains of Western North Carolina.
• 1:12
  SPEAKER_02: We are so back, baby.
• 1:15
  SPEAKER_02: Vacation is in the rear view.
• 1:17
  SPEAKER_02: It was nice to leave a town full of tourists just to visit another town full of tourists, but hey, tis the season, right?
• 1:24
  SPEAKER_02: And this July season seems to be trucking along as we move past its midpoint.
• 1:29
  SPEAKER_02: We should play a game called How to Know What Date It Is without looking at the calendar.
• 1:35
  SPEAKER_02: Last week would have been easy, right?
• 1:37
  SPEAKER_02: An abundance of kilts.
• 1:39
  SPEAKER_02: That means the Highland Games and early July.
• 1:42
  SPEAKER_02: By the end of next week, moving trucks and dumpsters out in front of nearly every apartment complex in town.
• 1:49
  SPEAKER_02: That means that the fall move-in window for AppState students will be fast approaching.
• 1:54
  SPEAKER_02: We see indicators of activity and time around us daily, but we just may not see them as indicators.
• 2:02
  SPEAKER_02: An easy example.
• 2:03
  SPEAKER_02: Christmas trees on the tops of cars in November and December.
• 2:07
  SPEAKER_02: It means the choose and cut season is in full force, but it also likely means discretionary spending is in a good place or good enough to get some people willing to spend gas money, buy a meal or two, and maybe even get a hotel room for an experience rather than just a trip to the lot down the street from their suburban Charlotte home.
• 2:29
  SPEAKER_02: And the volume of those cars that would indicate whether more people have money to spend on that experience that they desire to covet.
• 2:37
  SPEAKER_02: Those of us that notice these things chalk it up to anecdotal evidence of the behavior of our economy.
• 2:43
  SPEAKER_02: But there is a team that has developed ways to measure this activity and more, and how they report the data collection helps inform the economy.
• 2:53
  SPEAKER_02: The Federal Reserve System is the central bank of the United States.
• 2:57
  SPEAKER_02: Its mandate is to promote the effective operation of the U.S.
• 3:01
  SPEAKER_02: economy.
• 3:01
  SPEAKER_02: There are twelve branches and twenty-five offices that contain staff all over the country that do this work.
• 3:08
  SPEAKER_02: Our area is covered by the Federal Reserve Bank of Richmond, and there is a branch of that bank in Charlotte.
• 3:14
  SPEAKER_02: Now, this is not like a traditional bank where you go and withdraw money or apply for a home or car loan.
• 3:20
  SPEAKER_02: These are the banks that bring stability to the entire financial system and promote the safety and soundness of the financial institutions that you do visit.
• 3:29
  SPEAKER_02: They also have a mandate to promote maximum employment, stable prices, and moderate long-term interest rates.
• 3:37
  SPEAKER_02: The latter pair of those to-dos has certainly taken up quite a bit of the national narrative about the Fed over the last few years.
• 3:45
  SPEAKER_02: So why are we talking about the Federal Reserve on Mind Your Business?
• 3:49
  SPEAKER_02: Because our economy has been in flux for the last several years.
• 3:53
  SPEAKER_02: Helene influences, gas prices, market trends, elections, belt tightening, global political theater.
• 4:00
  SPEAKER_02: These are all things that we hear about in the national news, but we don't have to walk too far down King Street to see evidence of their effects.
• 4:08
  SPEAKER_02: This week on the program, we are joined by Bethany Green.
• 4:12
  SPEAKER_02: She is a regional economist at the Charlotte branch of the Federal Reserve Bank of Richmond.
• 4:16
  SPEAKER_02: She monitors regional economic trends through data analysis and engagements with business communities across North and South Carolina.
• 4:24
  SPEAKER_02: We'll discuss the impact of leadership transition on the Fed's work as Kevin Walsh has taken over as Fed chair recently.
• 4:31
  SPEAKER_02: We'll also talk about what methods the Fed uses to track regional economic data, how that data turns into recommendations that shape broader financial policy directions, and we'll talk about what's on the horizon as the midterms approach as we get farther away from the direct impacts of Helene and as we contemplate the next set of drivers on our regional and national economy.
• 4:55
  SPEAKER_02: We are back from our brief summer break with a deep dive into finance.
• 4:59
  SPEAKER_02: And if you work for or own a business that is reliant on people deciding to spend money with you, you may pick up some helpful insight from this episode.
• 5:08
  SPEAKER_02: Get your abacus ready.
• 5:10
  SPEAKER_02: We're back in just a minute.
• 5:11
  SPEAKER_02: You are listening to mind your business.
• 5:13
  SPEAKER_02: Each fall, the Boone Area Chamber of Commerce leads a celebration of community, the people and businesses that make us unique, the leaders that make the high country strong.
• 5:23
  SPEAKER_02: This celebration captures the spirit of boon.
• 5:26
  SPEAKER_02: Join us Thursday, September 24th from 5:30 to 9 o'clock in the Grandview Ballroom at Kid Brewer Stadium as the Chamber hosts Spirit of Boon.
• 5:35
  SPEAKER_02: Connect and network with nearly 400 fellow business and community leaders.
• 5:39
  SPEAKER_02: Enjoy a delicious dinner.
• 5:41
  SPEAKER_02: Prove to the live sounds of Watauga County's own Adam Church, and help us celebrate the accomplishments of the Chamber's annual community award on Areeds.
• 5:50
  SPEAKER_02: Spirit of Boon is the Chamber's largest fundraiser of the year with event proceeds that fuel our mission-driven work, programs, and projects.
• 5:59
  SPEAKER_02: Seating is limited, and this event has sold out in past years.
• 6:03
  SPEAKER_02: Tickets and corporate tables are available now at BoonCamber.com.
• 6:07
  SPEAKER_02: Join us as we celebrate the Spirit of Boon.
• 6:10
  SPEAKER_02: Reserve your seats today at Boonechamber.com.
• 6:15
  SPEAKER_02: Welcome back to Mind Your Business.
• 6:17
  SPEAKER_02: I'm David Jackson.
• 6:18
  SPEAKER_02: Before we dive into the nuance of federal financial policy, let us highlight a local business that provides a similar level of analysis as you are considering your needs for business space in the future.
• 6:30
  SPEAKER_02: That's James Milner and Appalachian Commercial Real Estate.
• 6:33
  SPEAKER_02: They solve simple and complex commercial real estate problems in and around the Boone area and beyond.
• 6:38
  SPEAKER_02: Whether you own or lease commercial real estate, regardless of the property type, have an advocate on your side, along with experience and expertise to assist you and your business.
• 6:49
  SPEAKER_02: For more information, check them out on the web, Appalachian CRE.com.
• 6:54
  SPEAKER_02: We've all seen the headlines interest rate fluctuations, inflationary pressure, consumer spending habits, leadership change.
• 7:03
  SPEAKER_02: These are just a few of the storylines you'll see the Federal Reserve attached to if you do a quick Google search.
• 7:09
  SPEAKER_02: Even more than that, there is analysis.
• 7:12
  SPEAKER_02: How do we know if the levers being pulled by the Fed are having the desired impact on labor, discretionary spending, and consumer behavior?
• 7:20
  SPEAKER_02: Three benchmarks that are oh so important to our tourism economy here in the high country.
• 7:25
  SPEAKER_02: As I said earlier, the Fed employs a team of people to conduct research and interviews and provide data analysis from regions across the country.
• 7:33
  SPEAKER_02: Bethany Green is a regional economist for the Federal Reserve Bank of Richmond, and she has her finger on the pulse of the economy across the Southeast.
• 7:42
  SPEAKER_03: I have to give my standard disclaimer that everything I say is my view alone, not necessarily the view of the Fed.
• 7:49
  SPEAKER_03: But the Fed is, you know, the central bank of the United States.
• 7:53
  SPEAKER_03: So when you think about central banks in like different countries, you know, they typically exist to act in the interest of the public to promote economic health and financial stability.
• 8:05
  SPEAKER_03: So our ultimate goal is to do that.
• 8:08
  SPEAKER_03: And so we have a variety of different functions that support that goal.
• 8:12
  SPEAKER_03: So one of the functions that most people are familiar with is going to be monetary policy, right?
• 8:16
  SPEAKER_03: So setting interest rates, making sure that the economy is running smoothly, inflation is under control.
• 8:22
  SPEAKER_03: We also have bank supervision, right?
• 8:25
  SPEAKER_03: So making sure that the banking system is running smoothly as well.
• 8:29
  SPEAKER_03: And then we also manage the payment system.
• 8:32
  SPEAKER_03: We play a large role in managing the payment system.
• 8:34
  SPEAKER_03: So I say the Fed does a variety of things with a clear goal in mind, which is to promote economic health and financial stability.
• 8:44
  SPEAKER_02: So a lot of people will see the Fed and the headlines, especially as it relates to interest rates.
• 8:49
  SPEAKER_02: And we'll talk about that here in just a few minutes.
• 8:51
  SPEAKER_02: But would it be safe to say that the day-to-day activity of the Fed is meant to almost stay in the background and to make sure that the system itself is functioning?
• 8:59
  SPEAKER_02: Is that a fair assessment?
• 9:01
  SPEAKER_03: Yeah, I'd say so.
• 9:03
  SPEAKER_03: And the main thing that actually comes to mind when you said that is the role that the Fed plays in our payment system.
• 9:10
  SPEAKER_03: So, you know, on the cash side of things, the Fed operates, it's like a bank to other banks.
• 9:16
  SPEAKER_03: So they accept deposits, you know, they distribute cash and kind of manage like the circulation of the supply of cash.
• 9:24
  SPEAKER_03: And another thing is electronic payments.
• 9:26
  SPEAKER_03: So when you said that, um, I what came to mind is that most people don't think about, you know, how their money gets from point A to point B and the role that the Fed plays in that, right?
• 9:36
  SPEAKER_03: So a way that someone once described it to me was it's kind of like plumbing.
• 9:41
  SPEAKER_03: So, you know, you don't really think about your plumbing, you shouldn't have to think about your plumbing, but you know, if it were to stop working, it it would be a disaster.
• 9:50
  SPEAKER_03: So when it comes to electronic payments, for example, when people get paid through direct deposit, for example, they're essentially transferring money from your employer's bank to your bank.
• 10:02
  SPEAKER_03: And the Fed operates the network underneath that, right?
• 10:06
  SPEAKER_03: Another thing is that when the Fed um, well, when you deposit a check, for example, the Fed helps settle the transaction that's happening between banks.
• 10:14
  SPEAKER_03: So the Fed has a bunch of like things underneath what is, you know, typically um put out there at the forefront, um, that really helps with that financial stability piece and just making sure that things are running smoothly in the financial system.
• 10:30
  SPEAKER_02: Well, and I would say as a quick aside to that, we have noticed more of our customers here at the chamber have been relying on ACH payments uh because of the instability of the mail and delivery cycles.
• 10:42
  SPEAKER_02: You know, if you if you're waiting for a check on a Friday, it doesn't come till Tuesday, that can mess with someone's bottom line very quickly.
• 10:49
  SPEAKER_02: So we see more electronic activity.
• 10:52
  SPEAKER_02: I would imagine with that comes a lot of guardrails.
• 10:55
  SPEAKER_02: What do you all do to monitor um, I would assume, threats, but also just to make sure that the evolution of electronic payments is moving along at the pace of business and at the pace of the way that people need that?
• 11:08
  SPEAKER_03: Absolutely.
• 11:09
  SPEAKER_03: Um, so the Fed actually recently instituted something called FedNow.
• 11:15
  SPEAKER_03: And so FedNow is something that we developed to have instant payments.
• 11:22
  SPEAKER_03: So um banks can like, you know, voluntarily enroll in FedNow, of course, they don't have to use it.
• 11:27
  SPEAKER_03: But I think that's something that the Fed was thinking about in terms of making sure that money is safely and quickly getting to um point A to point B.
• 11:35
  SPEAKER_03: So FedNow is a new service that allows instant payments.
• 11:40
  SPEAKER_03: Um, and then when it comes to safety and security, something else, which is not necessarily in the payments realm, but is in like the supervision realm, is that the Fed also plays a large role in like consumer protection.
• 11:53
  SPEAKER_03: So they investigate, you know, consumer complaints against financial institutions.
• 11:58
  SPEAKER_03: So that's also another way that the Fed plays a role in like um safety and security of the financial system.
• 12:05
  SPEAKER_02: So if anybody has tuned into the news lately, they see the Fed in the news cycle.
• 12:10
  SPEAKER_02: Uh a lot of that having to do with the new Fed chair in Kevin Warsh, as he has come in to that seat.
• 12:16
  SPEAKER_02: What does transition like that look like inside a massive organization like the Fed?
• 12:22
  SPEAKER_02: But then also, what are some of the goals of that transition at this point?
• 12:25
  SPEAKER_03: Yeah, great question.
• 12:26
  SPEAKER_03: So from my standpoint, just being in like the research department of a regional bank, you know, our goal is still to understand the regional economy and the economy at large, and then also use that information to make good decisions on monetary policy.
• 12:41
  SPEAKER_03: But in terms of the transition, you know, transition always, especially leadership transition, comes with change.
• 12:49
  SPEAKER_03: And so actually in the latest press conference, the chair did mention the creation of like different task forces to take a look at things like, you know, the impact of AI, the balance sheet, also the type of economic data that we use for monetary policy deliberation.
• 13:08
  SPEAKER_03: So I think the goals right now are really to evaluate, you know, the effectiveness of certain processes that the Fed has been using and to make sure that, you know, we can be most effective when it comes to monetary policy.
• 13:22
  SPEAKER_02: You know, I know that there have been businesses in our community that have been in touch with the Fed over the years, and some of that is just a normal dialogue.
• 13:30
  SPEAKER_02: How are business uh trends performing in our area, especially post-COVID, post-talene?
• 13:36
  SPEAKER_02: We've had those uh a little bit more frequently.
• 13:38
  SPEAKER_02: Uh, you mentioned research a moment ago.
• 13:41
  SPEAKER_02: How does your office take all of that data and turn that into what we could hear in Fed discussion at those meetings and kind of getting the snapshot of everyday America into the conference room, so to speak?
• 13:57
  SPEAKER_03: Absolutely.
• 13:58
  SPEAKER_03: So we're able to do this in two ways.
• 14:02
  SPEAKER_03: First, I want to point to our use of surveys.
• 14:05
  SPEAKER_03: So when I think about the Richmond Fed, I think one of our strengths is the ability to kind of you know gather on the ground in real-time information.
• 14:14
  SPEAKER_03: And one of this, one of the ways that we do that is through our business surveys.
• 14:18
  SPEAKER_03: So we have like a panel of survey um respondents and we ask them regularly questions about, you know, prices, hiring, um, revenue, wages, you know, we also have a manufacturing survey, so we can ask about manufacturing activity.
• 14:35
  SPEAKER_03: And then, so that's one side of things.
• 14:37
  SPEAKER_03: We can gather that data regularly and analyze it.
• 14:40
  SPEAKER_03: We also create indices using that data.
• 14:43
  SPEAKER_03: And then also, which what which is what you were referring to, is we have individual conversations with businesses.
• 14:50
  SPEAKER_03: So a big part of my job and the job of people in my specific department is to have engagements with the business community.
• 14:58
  SPEAKER_03: And I can provide them with economic insight, and then they also provide me with real-time on-the-ground information that helps us understand, you know, are companies planning to increase their prices?
• 15:08
  SPEAKER_03: Or, you know, what do they do with their hiring plans?
• 15:10
  SPEAKER_03: You know, what is the overall sentiment that they have about the economy and like the future outlook?
• 15:15
  SPEAKER_03: So, in addition to the quantitative data that we look at from like, you know, the BLS, BEA, and things like that, um, we can identify patterns in like qualitative data as well.
• 15:26
  SPEAKER_03: And then we report that analysis to our president.
• 15:29
  SPEAKER_03: And so he can then use the regional perspective that we've gained in policy deliberations.
• 15:35
  SPEAKER_03: And so it's helpful because you know, data can have lags, you know, it takes a while for some data to come out.
• 15:42
  SPEAKER_03: So anecdotal information is really helpful to gauge, you know, how the economy is performing in real time, which is good.
• 15:50
  SPEAKER_02: So here we are at just past the midpoint of 2026.
• 15:54
  SPEAKER_02: As you have done this research, are there any things that the Fed is particularly paying attention to right now as it relates to economic performance, especially here in this region?
• 16:05
  SPEAKER_03: Yes.
• 16:06
  SPEAKER_03: So I think something that we've been saying for a long time is that the US economy has been exhibiting, you know, resilience, right?
• 16:15
  SPEAKER_03: We see solid GDP growth, overall solid consumer spending.
• 16:20
  SPEAKER_03: Labor market has shown some signs of rebalancing.
• 16:24
  SPEAKER_03: So I'll talk about that a little bit, but it's been holding up quite okay.
• 16:28
  SPEAKER_03: So when it comes to labor market, you know, we've seen this labor market that shifted away from, I'd say, favoring the job seeker.
• 16:36
  SPEAKER_03: That's how I kind of describe it.
• 16:38
  SPEAKER_03: If you recall, like a couple of years ago, labor market was extremely hot.
• 16:42
  SPEAKER_03: You know, it's hard to find employees, lots of reshuffling happening, people hopping from job to job, you know, industry to industry.
• 16:50
  SPEAKER_03: And that really fueled wage growth.
• 16:53
  SPEAKER_03: We're no longer in that era.
• 16:54
  SPEAKER_03: So in some ways, it kind of feels like a stagnant market.
• 16:58
  SPEAKER_03: And I'm sure you've heard about the whole low hire, low-fire environment that we've been in for a while.
• 17:04
  SPEAKER_03: And that is the case also here in North Carolina, um, also according to some of the conversations that we've had.
• 17:12
  SPEAKER_03: But I think the I I guess the main thing that stands out to us is gonna be the trend of inflation right now that we're looking at.
• 17:21
  SPEAKER_03: And so, you know, inflation has been trending upward recently, a lot of that having to do with pressure from energy costs, of course.
• 17:29
  SPEAKER_03: And but in addition to that, inflation has been trending above the Fed's 2% target for years at this point, right?
• 17:36
  SPEAKER_03: So if you look at the data from last year, inflation didn't really budge.
• 17:40
  SPEAKER_03: It was kind of just moving sideways.
• 17:43
  SPEAKER_03: And not because of, you know, just energy costs.
• 17:45
  SPEAKER_03: We see contributions from goods prices, we see contributions from services.
• 17:50
  SPEAKER_03: And so I kind of point to um inflation as something that we're we're definitely watching at this at this point in the year.
• 17:59
  SPEAKER_02: So we have seen, and and you can mark this down in your anecdotal information column, uh, here in this uh community, a tourism-based community, we have seen that inflation show up actively in the belt tightening of the tourists that are coming, maybe staying for similar durations, but not maybe spending as much money.
• 18:17
  SPEAKER_02: And that seems to be kind of the consistent message that we've heard, at least through the end of the month of June.
• 18:22
  SPEAKER_02: Do you see inflation driving that kind of activity from your perspective as well?
• 18:28
  SPEAKER_02: Or are there other um, I guess uh you could say because of inflation, this area of the economy tends to suffer or prosper?
• 18:36
  SPEAKER_02: Are you seeing any of those parallels in in the research that you're doing at this point?
• 18:42
  SPEAKER_03: That's a that's a great question.
• 18:43
  SPEAKER_03: Something we've been tracking since the narrative for so long has been, you know, consumer spending is holding up.
• 18:49
  SPEAKER_03: But if you kind of look underneath that, you do see some differences by, you know, household type, for example.
• 18:56
  SPEAKER_03: And so what comes to mind is that conversation around, you know, different people behaving differently when it comes to spending, especially discretionary spending and you know, travel is gonna be in that category.
• 19:08
  SPEAKER_03: So it can definitely differ by geography, clearly, like you mentioned, um, because of the lasting impact of Helene.
• 19:16
  SPEAKER_03: But also a big topic of conversation is how it's differing by income level.
• 19:22
  SPEAKER_03: So there's data that shows that the majority of the growth in spending that we've seen is coming from that higher income end of things.
• 19:30
  SPEAKER_03: And then when it comes to, you know, for example, what we've experienced recently is like higher gas prices.
• 19:36
  SPEAKER_03: Um, and then the lower to middle income consumer is going to be unevenly impacted because they already spend a majority of their money on essentials, including gas, right?
• 19:47
  SPEAKER_03: So their ability to kind of find additional room in their budgets is depleted, and that impacts their spending ability, especially for discretionary things.
• 19:56
  SPEAKER_03: So I think there's clearly a difference in how people, I guess the difference in pressure that people are feeling when it comes to inflationary pressures.
• 20:09
  SPEAKER_03: And so whereas high-income households may be less impacts and better able to continue spending, we see differences in by income type for sure.
• 20:18
  SPEAKER_02: Take a breather, release the numbers and formulas from your brain for just a moment.
• 20:23
  SPEAKER_02: We'll continue our conversation with Bethany Green, regional economist for the Federal Reserve Bank of Richmond when we come back from this break.
• 20:30
  SPEAKER_02: You are listening to Mind Your Business.
• 20:32
  SPEAKER_01: Appalachian Commercial Real Estate provides professional commercial real estate services in the Boone area.
• 20:38
  SPEAKER_01: They provide sales, leasing, consulting, and appraisal services to owners and users of commercial real estate.
• 20:45
  SPEAKER_01: For more information, go to their website at Appalachian CRE.com.
• 20:50
  SPEAKER_02: Welcome back to Mind Your Business.
• 20:51
  SPEAKER_02: I'm David Jackson.
• 20:52
  SPEAKER_02: We continue our conversation with Bethany Green, regional economist with the Federal Reserve Bank of Richmond.
• 20:58
  SPEAKER_02: You know, you were mentioning labor uh a couple of couple of times uh a few moments ago.
• 21:03
  SPEAKER_02: And, you know, one of the things that we have seen in our community as well as businesses have not been as as cash-rich over the last, I'd say, 18 months or so.
• 21:12
  SPEAKER_02: You know, again, some of that Helene drag, of course.
• 21:15
  SPEAKER_02: Uh, they have not been as quick to hire at full capacity for for this summer.
• 21:20
  SPEAKER_02: And we look at all kinds of different fluctuations in the labor market.
• 21:23
  SPEAKER_02: North Carolina just recently fell to number two uh in the in the country for business.
• 21:27
  SPEAKER_02: Uh we'll we'll work on that for next year.
• 21:29
  SPEAKER_02: Uh, but one of the things that has remained consistent is North Carolina's labor position.
• 21:34
  SPEAKER_02: We see some some of the, I guess maybe the macro-micro uh definition here.
• 21:39
  SPEAKER_02: While individuals may be seeing pressure, do you see wider pressure on the labor market or are things kind of balancing themselves out a little bit more now that we are several years post COVID even?
• 21:52
  SPEAKER_03: Yeah, I think the advantage um that North Carolina has is that, you know, when companies think about coming here, one of the Things they want to know is does this place have the workforce available to you know fill positions?
• 22:06
  SPEAKER_03: And you know, even though, like you said, there have been some concerns about you know labor market, people's ability to find work, I think a major issue that a lot of places are facing and may continue to get worse is the overall availability of workers and having the right workers to support the creation and furthering of economic activity.
• 22:32
  SPEAKER_03: And so, I mean, you know, as you know, having workers available means that businesses are more able to invest, increase production.
• 22:40
  SPEAKER_03: I think North Carolina is a leader here when it comes to like, you know, facilitating the connection between workforce and industry through our schools, our community colleges, workforce programs, but that's not the case countrywide, you know.
• 22:56
  SPEAKER_03: I think uh North Carolina is a clear leader here.
• 22:58
  SPEAKER_03: And also helping people realize that the occupations in demand may not require the traditional path that we've been thinking about for a long time, like that four-year college um path.
• 23:13
  SPEAKER_03: And so I think it's really important.
• 23:15
  SPEAKER_03: And so even though there appears to be, you know, a rebalancing of the labor market, I think overall a major issue that I think we're gonna continue to deal with is just overall supply of workers.
• 23:28
  SPEAKER_03: And since North Carolina has seen a lot of population growth over the past couple of years is able to attract new people, that does put them at an advantage.
• 23:38
  SPEAKER_03: But I think for you know, some other states that aren't able to attract workers in that way, it's definitely going to be an issue.
• 23:45
  SPEAKER_03: And then also shortage of workers can really create inflationary pressures, right?
• 23:52
  SPEAKER_03: We saw that a couple of years ago, you know, where you know, in order to compete for workers, you know, you had to, you know, see significant wage growth for those workers that are in short supply.
• 24:04
  SPEAKER_03: So I'd say it's definitely, I think the availability of workers from a longer-term perspective is a uh something to continue to watch.
• 24:13
  SPEAKER_02: You know, you mentioned the community college system, that backbone is is why, and in my opinion, at least and many others would agree that uh that that community college backbone has been why Western North Carolina has been able to advance away from some of the the Helene impact a little quicker because of the ability to retrain, reskill, upskill workers to face these these individual needs.
• 24:38
  SPEAKER_02: You have seen disasters play out across communities all over the country.
• 24:43
  SPEAKER_02: We're about two years supposed to lean now, coming up on that.
• 24:46
  SPEAKER_02: What can we expect next from the economic recovery of all of this and the reliance on new skilled workers?
• 24:53
  SPEAKER_02: I mean, what what's next for us in that regard?
• 24:55
  SPEAKER_03: Yeah, it's a great question.
• 24:57
  SPEAKER_03: I've been thinking about how the impact of natural disasters different differs by location.
• 25:05
  SPEAKER_03: And so what does a two-year mark typically look like?
• 25:08
  SPEAKER_03: I'd say, you know, typically at that mark, things have shifted toward, you know, longer-term recovery conversations, but of course, the stage of that recovery really varies by region.
• 25:21
  SPEAKER_03: I think, you know, the resources available, the types of industries present, the pre-existing trends, I'd say, with you know, population growth and things like that.
• 25:31
  SPEAKER_03: But I do think at the two-year mark, of course, it's not a situation where all has been resolved.
• 25:36
  SPEAKER_03: I do think in Western North Carolina specifically, we're we're dealing with a unique situation, I think, for a variety of reasons, you know, to from topography to, you know, um industry composition, the types of businesses that are here.
• 25:50
  SPEAKER_03: I do think there has been a lot of improvement when it comes to visitorship.
• 25:54
  SPEAKER_03: So I'll definitely point that out.
• 25:55
  SPEAKER_03: And I think there will be a lot of momentum in the coming months as well.
• 26:00
  SPEAKER_03: But something I wanted to point to is just the experience of smaller businesses in Western North Carolina.
• 26:08
  SPEAKER_03: I actually did an analysis with the Asheville Chamber to talk about how small businesses are doing in the aftermath of Helene.
• 26:14
  SPEAKER_03: And we basically showed how small businesses are just a lot more prevalent in the region.
• 26:19
  SPEAKER_03: And so the overall business community is more so facing, you know, additional recovery barriers and challenges.
• 26:28
  SPEAKER_03: And so, although there has definitely been improvement, but I think full recovery, especially for those businesses that are really reliant on visitors, it's gonna really depend on that full return to the area.
• 26:42
  SPEAKER_02: I actually just heard a small business owner in our community say that the heat wave has been good for business here because it's like 15 degrees cooler than it is in Raleigh or Charlotte or Greensboro.
• 26:52
  SPEAKER_02: So the the weather giveth and taketh away, I guess, at some points in time too.
• 26:57
  SPEAKER_02: Um last couple of questions I've got for you.
• 26:59
  SPEAKER_02: We'll we'll zoom back out a little bit.
• 27:01
  SPEAKER_02: Um, as I mentioned, we're we're kind of past the halfway point of the year.
• 27:04
  SPEAKER_02: As the Fed is is moving toward the back half of the year, what types of activity are are you really charting to then chart future action?
• 27:15
  SPEAKER_02: Yeah, great question.
• 27:18
  SPEAKER_03: I think so.
• 27:19
  SPEAKER_03: When it comes to the Fed, you know, looking at that dual mandate, they're trying to accomplish, you know, price stability, maximum employment.
• 27:26
  SPEAKER_03: I think the major thing we're looking at, we're going to look at is going to be the trend of inflation.
• 27:31
  SPEAKER_03: Also looking at the categories of inflation to see if it's being concentrated in one specific area or are we seeing it spreading broadly across a majority of like goods and services.
• 27:42
  SPEAKER_03: I think right now we're thinking a lot about energy, but I think the Fed in the in the next half of the year is thinking like, is that going to spread broadly?
• 27:51
  SPEAKER_03: Um, also inflation expectations.
• 27:54
  SPEAKER_03: So I think a major danger, of course, is inflation expectations becoming unanchored.
• 28:00
  SPEAKER_03: Basically means that people expect future inflation and that causes them to make decisions that fuel inflation, you know, like people buying things now instead of later, businesses raising their prices, negotiating contracts higher, people asking for higher pays.
• 28:17
  SPEAKER_03: So definitely gonna take a definitely taking a look at um how well inflation expectations are anchored.
• 28:23
  SPEAKER_03: Another thing, of course, is gonna be the labor market, since that is the other half of our mandate.
• 28:27
  SPEAKER_03: I think there are a variety of things to look at here.
• 28:30
  SPEAKER_03: Of course, the number of jobs being added monthly is something, but in addition to that, unemployment rate, um, layoffs.
• 28:38
  SPEAKER_03: I know we've continued to hear about being in this low hire, low fire stance.
• 28:44
  SPEAKER_03: But of course, you know, things can easily shift.
• 28:47
  SPEAKER_03: Um, and so we're really just trying to get a gauge on is hiring activity healthy?
• 28:53
  SPEAKER_03: Are we gonna see layoffs?
• 28:55
  SPEAKER_03: But also wage growth.
• 28:56
  SPEAKER_03: Are there signs that the labor market is tightening in a way that would actually fuel inflation?
• 29:02
  SPEAKER_03: So also thinking about that.
• 29:04
  SPEAKER_03: And then, you know, of course, overall trend of growth and consumer patterns and business activity, you know, are consumers pulling back on spending, you know, because of inflation?
• 29:15
  SPEAKER_03: Are they continuing to spend?
• 29:16
  SPEAKER_03: Are we seeing businesses cutting back on investment?
• 29:19
  SPEAKER_03: So I think those are gonna be just some important indicators that we look at as we finish out the last half of the year.
• 29:27
  SPEAKER_02: Well, then the most obvious question for last, uh, as we steam toward the end of the year, we've also got these pesky midterms coming up.
• 29:35
  SPEAKER_02: Uh, and and while the Fed is an independent organization, certainly we see the impact of politics on our economy and other places.
• 29:44
  SPEAKER_02: How are you tracking that?
• 29:46
  SPEAKER_02: And what are the normal behaviors that you see in a midterm year that might give us some idea of what to expect here over the next few months?
• 29:53
  SPEAKER_03: Yeah.
• 29:54
  SPEAKER_03: You know, the main thing I can point to is, you know, this whole question around business sentiment and like policy uncertainty and how that affects businesses and consumers.
• 30:04
  SPEAKER_03: You know, we find that around elections, there's some level of uncertainty.
• 30:08
  SPEAKER_03: And so when it comes to policy, um businesses and consumers can hold off on like major decisions due to uncertainty.
• 30:18
  SPEAKER_03: But I do think there is some analysis to suggest that this is more consequential for like presidential election, right?
• 30:25
  SPEAKER_03: Compared to a midterm.
• 30:27
  SPEAKER_03: But, you know, the predictability of the policy environment, of course, matters for businesses.
• 30:33
  SPEAKER_03: You know, it's something we talked about a lot last year because, you know, economic policy uncertainty was heightened last year.
• 30:40
  SPEAKER_03: And so we talked a lot about how that may have impacted hiring and investment plans because businesses like to make decisions, you know, in an environment of certainty.
• 30:49
  SPEAKER_03: And so interestingly, I think another point to this is that I think businesses are very used to an environment of uncertainty.
• 30:57
  SPEAKER_03: So it would be interesting, actually, I've been thinking about this, to conduct some sort of analysis on how businesses have been agile in the midst of uncertainty, may potentially be, you know, desensitized to changes in the policy environment.
• 31:12
  SPEAKER_03: So it's a it's an interesting balance.
• 31:14
  SPEAKER_03: But yes, we definitely are thinking about, you know, how does uncertainty, additional uncertainty, impact some of those decisions that businesses and consumers make?
• 31:24
  SPEAKER_02: You know, that that's a great point.
• 31:26
  SPEAKER_02: And, you know, to to close on that, whether it's political uncertainty or or even just what we've gone through with COVID, then Helene, you know, on uh almost back to back there, there is uncertainty that comes in in so many directions.
• 31:40
  SPEAKER_02: So maybe not a desensitization, but maybe more of a, well, we're not surprised by anything anymore.
• 31:46
  SPEAKER_02: Yeah.
• 31:47
  SPEAKER_02: That might be the overall attitude, but uh, but certainly something to watch.
• 31:51
  SPEAKER_02: Um, well, we really appreciate the time, Bethany.
• 31:54
  SPEAKER_02: This has been insightful.
• 31:55
  SPEAKER_02: I know that we we've got several uh chamber folks that will listen to this over and over again just to pick apart every every piece to it.
• 32:02
  SPEAKER_02: But um just can't thank uh you you enough and and President Barkin as well.
• 32:07
  SPEAKER_02: Your office has always been so great to share information.
• 32:10
  SPEAKER_02: We uh get a lot of that out to our members, and and it's very helpful uh not only for information, but for guidance as well.
• 32:17
  SPEAKER_02: So thank you for the work that you do.
• 32:19
  SPEAKER_02: I know it's it's deep in the weeds sometimes, but it but the end user really appreciates it.
• 32:24
  SPEAKER_02: We look forward to connecting with you and your your office again here soon.
• 32:28
  SPEAKER_02: Thank you so much for having me.
• 32:30
  SPEAKER_02: Thanks to Bethany and the entire team at the Federal Reserve Bank of Richmond for making this interview possible.
• 32:36
  SPEAKER_02: We've been fortunate to host the president and CEO of the Federal Reserve Bank of Richmond, Tom Barkin, here in Boone in the past.
• 32:44
  SPEAKER_02: And he has stayed directly connected to businesses in our region over his eight plus years in office.
• 32:50
  SPEAKER_02: I hope this conversation helps you understand just how financial policy is informed.
• 32:56
  SPEAKER_02: We've talked with Jonathan Allen from Allen Wealth Management quite a bit over the years about these types of trends that are tracked or influenced by the Fed.
• 33:04
  SPEAKER_02: Sometimes you hear about those high-flying agencies and feel like they're unattainable or unreachable.
• 33:11
  SPEAKER_02: Those headlines you read are being informed by people on the ground in our region, asking questions and then asking them again, studying trends and informing the public.
• 33:23
  SPEAKER_02: The Federal Reserve Bank of Richmond routinely hosts online forums and workshops to help share information and to echo some of Jonathan's points from episodes past.
• 33:33
  SPEAKER_02: It's never a bad time to start paying more attention.
• 33:37
  SPEAKER_02: Don't worry if you're a business owner that has not always been dialed into these issues.
• 33:42
  SPEAKER_02: A little bit of study can help you better predict what may happen next as we continue down this windy financial path.
• 33:49
  SPEAKER_02: You are listening to Mind Your Business.
• 33:52
  SPEAKER_00: Are you a young professional looking to expand your network?
• 33:55
  SPEAKER_00: The High Country Young Professionals, affectionately dubbed the High Country YoPros, is a dedicated group of 200-plus professional young adults under the age of 40, serving in various industries across the high country.
• 34:07
  SPEAKER_00: Join us for a casual networking event on the first Tuesday of each month from 5 to 7 p.m.
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• 34:35
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• 34:47
  SPEAKER_02: Hopefully, you and your family and friends have enjoyed a little downtime over the last few weeks.
• 34:52
  SPEAKER_02: We will be reaching the end of July soon, and August brings a period of change for us here in the area.
• 34:58
  SPEAKER_02: New students moving in, local students starting in new classrooms in our public schools.
• 35:04
  SPEAKER_02: You can go ahead and cue up the what did you do this summer stories.
• 35:08
  SPEAKER_02: So here at the chamber, we've got our own what have you been doing this summer story.
• 35:12
  SPEAKER_02: We've been doing some celebrating.
• 35:14
  SPEAKER_02: Since we last talked, the state of North Carolina has officially passed its budget.
• 35:19
  SPEAKER_02: And today in your chamber report, you'll see a synopsis on our 2026 legislative priorities and how many of those items were addressed or moved forward in the state's budget process.
• 35:31
  SPEAKER_02: The most notable win for the region is in the child care conversation, where state lawmakers adopted a statewide subsidy floor that will help centers in Watauga County realize closer to the full cost of care for the children that are receiving some sort of subsidy assistance.
• 35:47
  SPEAKER_02: Watauga County have one of the lowest reimbursement rates in the state prior to this legislative action, and they will be one of the most positively benefited counties in the state by this change.
• 35:58
  SPEAKER_02: We'll get more into the what happens now part of this issue a bit later this summer, but no, this is a big deal in a positive way for your favorite local child care provider.
• 36:09
  SPEAKER_02: There were other things in the budget that we will outline in this week's chamber report.
• 36:13
  SPEAKER_02: Remember that comes to those of you members in your emails on Thursday afternoons.
• 36:18
  SPEAKER_02: I'll say this it's possible for two things to be true in the case of state budgets.
• 36:23
  SPEAKER_02: You can be excited for some of the things in it and equally disappointed by what is or is not included in the bill.
• 36:29
  SPEAKER_02: So before you go buying fireworks or running for the nearest trash can, know that the conversation continues.
• 36:36
  SPEAKER_02: The short session is not over just yet.
• 36:38
  SPEAKER_02: As a matter of fact, they'll wrap that up here in a couple of weeks.
• 36:41
  SPEAKER_02: And our advocacy task force is already working toward policy recommendations for next year's legislative cycle.
• 36:47
  SPEAKER_02: Some of those agencies or projects or ideas that were not included this time, know there's never a finish line to this process, and we'll keep advocating as long as there is policy to discuss that impacts the high country.
• 37:00
  SPEAKER_02: The other thing we are celebrating, we shared with you a few weeks ago that the Boone Area Chamber of Commerce is one of eleven finalists for National Chamber of the Year, as presented by the Association of Chamber of Commerce Executives.
• 37:11
  SPEAKER_02: Next week, a few members of our team will head to New Orleans for the final interview as part of the judging process, and we'll get to present at our annual convention our synopsis we included in our application, which is focused on our work in presenting early childhood education as an economic development priority.
• 37:29
  SPEAKER_02: Cross your fingers for us and we'll let you know how it goes right here on the program next week.
• 37:34
  SPEAKER_02: You are listening.
• 37:35
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• 37:43
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• 37:49
  SPEAKER_01: For more information, go to their website at Appalachian CRE.com.
• 37:57
  SPEAKER_02: Time to wrap up this episode of the program.
• 38:09
  SPEAKER_02: We've already sold over 130 tickets to this event, so they are moving fast.
• 38:14
  SPEAKER_02: Tickets and corporate tables on sale now at Boothchamber.com.
• 38:18
  SPEAKER_02: We have finalized our community awards for this year's celebration.
• 38:22
  SPEAKER_02: Beginning to reach out to those folks who will be announcing those winners in the next couple of weeks.
• 38:27
  SPEAKER_02: Just some amazing stories to tell.
• 38:30
  SPEAKER_02: We cannot wait to share them with you.
• 38:32
  SPEAKER_02: Spirit of Boon, it's our largest fundraiser of the year with proceeds fueling the work of the Chamber and our foundation as we continue our work to impact the business community and quality of life overall here in the High Country.
• 38:46
  SPEAKER_02: Make plans to join us September 24th.
• 38:48
  SPEAKER_02: Spirit of Boon.
• 38:49
  SPEAKER_02: Tickets on sale now at BoonChamber.com.
• 38:52
  SPEAKER_02: That'll do it for this week's Mind Your Business.
• 38:54
  SPEAKER_02: This program is written and produced each week by the Boon Area Chamber of Commerce.
• 38:58
  SPEAKER_02: Thanks to WATA for placing us on the airwaves each and every week.
• 39:02
  SPEAKER_02: And thanks as always to James Milner and the team at Appalachian Commercial Real Estate for making the podcast version of this program possible.
• 39:09
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• 39:12
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• 39:15
  SPEAKER_02: And remember, you can visit us online anytime at BoonChamber.com.
• 39:20
  SPEAKER_02: Until next week, so long, everybody.