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Four Ways the St. Louis Fed Listens to Main Street


Wednesday, May 23, 2018

By Christine Smith, Public Affairs Staff

The Fed might seem like a faraway central bank in Washington, D.C. But the Federal Reserve System is decentralized by design: Its 12 Reserve Banks and their branches are rooted in communities across America. This is so the people making decisions about monetary policy hear diverse perspectives about local economic realities.

Here are four key ways the St. Louis Fed listens to the voice of Main Street.

1. Branching out in Our District

Eighth Federal Reserve District

The St. Louis Fed’s Eighth District spans all or parts of seven states. Covering this much ground from a single location would mean missing out on crucial conversations. To better serve the area, we have regional branch offices in:

Staff at these branches absorb feedback from farmers, city planners, health care administrators, bankers, manufacturers, small business owners, chambers of commerce and others—all in an effort to soak up as much information as possible about the region’s economy.

2. Hearing from Many Industries

Another way the St. Louis Fed stays dialed in to local economies is through our boards of directors and industry councils. These are made up of leaders from around the district, and members provide insights about what’s happening in the sectors and areas they serve—past, present and future. This is a vital function, since much of the data that economists consider (e.g., GDP, labor force participation, consumer prices, etc.) are backward-looking by nature. 

For example, industry councils provide a forward-looking view to such questions as: What are your forecasts for crop production? What’s happening with inflation around health-care costs? How have home prices changed in your area? What are your expectations on fuel prices?

The St. Louis Fed has four industry councils representing specific industries vital to the Eighth District:

  1. Agribusiness
  2. Health care
  3. Real estate
  4. Transportation

Ray Dillon is the former chairman of the Fed's Little Rock Branch board of directors and former CEO of Deltic Timber Corp. He now serves on the St. Louis Fed’s real estate industry council. Dillon respects how much attention is paid to gathering accurate data—“real data from the grassroots level of this country”—to help form monetary policy. This video is part of our Voices of the Fed series, in which current and former directors share their perspectives.

3. Focusing on Low- and Moderate-Income Communities

Not everyone emerges from a recession unfazed. In fact, many people continue to struggle no matter how well the economy is doing.

How can the Fed help? One way is to research and talk about issues preventing people from getting steady work and moving up the economic ladder.

Our dedicated Community Development team focuses on economic opportunity and fair, equal access to credit. They work closely with private, public and nonprofit organizations to understand difficulties faced by low- and moderate-income households in our region—from generational poverty to affordable housing to job availability and more.

4. Turning Data into Dialogue

Cover of Demographics of Wealth Essay May 2018

The Demographics of Wealth essay series shows that inherited characteristics—race or ethnicity, birth year, and even your parents’ level of education—can profoundly shape the economic opportunities you have. Get the latest essay.

Of course, there’s the thing the Fed may be most known for: data, and lots of it. Lest you think it’s obscure numbers that aren’t relevant for day-to-day living, we offer up the Center for Household Financial Stability.

Born out of the Great Recession, the center analyzes input from tens of thousands of households to help real people improve their “balance sheets”: what a family saves, owns and owes.

Some of its outputs include Does College Level the Playing Field? and The Demographics of Wealth, which explore the complex interplay of education, age, race and economic opportunity. In 2017, this theme was the focus of our ongoing public discussion series, Dialogue with the Fed. It also offers practical thoughts on whether to save or pay off high-interest debt and who is—and could be—doing well in the stock market.

What It Comes Down to

The Federal Reserve System was purpose-built to keep power from becoming too concentrated in Washington or on Wall Street. The voice of Main Street matters. But not even Main Street speaks with one voice, and that’s OK: Vigorous debate about monetary policy is a good thing. That’s why each of these areas, and many more, play a role in shaping the St. Louis Fed’s perspective about the economy.


Additional Resources

ABOUT THE AUTHOR
Christine Smith 

Christine Smith is a senior specialist at the St. Louis Fed.

She works in Public Affairs.

Tagged christine smithcommunity developmenthousehold financial stabilityhfsjobsmain streetboard of directorsindustry councilsbranches