Economic Outlook by Alan Blinder

March 2018Alan Blinder Bio Photo
Alan S. Blinder

Vice Chairman and Co-Founder, Promontory Interfinancial Network
Professor of Economics and Public Affairs, Princeton University

Jay came, Jay saw, Jay conquered.

Well, maybe it wasn’t that hard a conquest, but Jerome (“Jay”) Powell’s first Federal Open Market Committee (FOMC) meeting as Chairman of the Federal Reserve has to be scored a success. He delivered the widely expected, 25 basis-point increase in the federal funds rate on a unanimous vote. Yes, it’s true that the FOMC is smaller (only eight voting members these days) and a lot less fractious than it used to be. The Committee’s hawks and doves are no longer very far apart. But still…

He and his fellow Committee members nudged the so-called “dot plot” up a bit, apparently without upsetting markets. The 15-member committee is now about evenly split between expecting (or is it favoring?) two or three more rate hikes of 25 basis points each this year, and a total of about six (150 bps) in 2018 and 2019 together. If that comes true, the funds rate will be in the 2.75-3.00 percent range by the end of next year, just about where the Committee sees the long-run “neutral” funds rate to be. But consistent with a belief that they’ll have some mild overshooting to combat, the FOMC also penciled in another 50 basis points of tightening in 2020.

The Committee bumped up its real GDP estimates for 2018 and 2019 by amounts that are broadly consistent with what the economic consensus—but not the Trump administration—says the new fiscal policies will do to growth. Perhaps more notably, members now project a considerable overshoot of full employment—with the unemployment rate trailing down to 3.6 percent against an estimated NAIRU of 4.5 percent. Yet they barely touched their inflation forecast. That’s a pretty flat Phillips curve.

Last, but certainly not least, Powell’s answers to questions at his first press conference were taciturn, and his words sufficiently well-chosen, that he didn’t make news—which is what Fed chairs generally want to do.

Congratulations, Jay.

TIME TO REGISTER IS RUNNING OUT – 2018 ABA Government Relations Summit & Forums

Register Now for the 2018 ABA Government Relations Summit and Bring Your Bank’s Emerging Leaders!

We’re looking forward to seeing you April 23-25 for the 2018 ABA Government Relations Summit in Washington, DC. The Summit presents a great opportunity for Idaho bankers to meet with our Congressional Delegation and representatives from the regulatory agencies to ensure they understand the principles that guide our industry, and incorporate them into policy. Idaho Bankers play a hugely important role in that Senator Crapo is the Senate Banking Chairman.  The Idaho Community Bankers Association (ICBA) is pleased to provide at least two travel scholarships up to $750.  Scholarships are redeemed through the ICBA following the GR Summit for travel-related expenses.

CLICK HERE TO REGISTER for the Summit and all ancillary events including the 4th annual Emerging Leaders Forum.

2018 Emerging Leaders Forum

The Emerging Leaders Forum is scheduled for Monday, April 23rd from 10:00 a.m. – 4:00 p.m. and will include lunch. It will continue to center on professional and leadership development and the importance of advocacy. Idaho attendees will have an opportunity to share their leadership challenges and network with peers from across the country at a reception following the Forum. There will also be additional events for attendees. Please continue to check the website for additional program elements and event details. In addition to the ICBA scholarship above, the ABA is pleased to provide at least two $750 Emerging Leader Forum scholarships for Idaho. Scholarships are redeemed through the ABA following the Emerging Leaders Forum/GR Summit for travel-related expenses.

2018 Women’s Leadership Forum

The Women’s Leadership Forum is scheduled for Wednesday, April 25th from 11:15 a.m. – 1:00 p.m. and will include lunch with the keynote speaker, Kristi Hedges, author and leadership coach. There will be an opening reception on Monday, April 23rd from 5:30 p.m. – 6:30 p.m.

Hotel Reservation Information
The Marriott Marquis Washington, DC is the conference hotel for the 2018 Government Relations Summit and Forums. ABA does not endorse other sources for making hotel reservations.  Registration and Travel: Registration is still open and although the hotel cutoff is April 9th, the hotel is filling up quickly. Please make your reservations as soon as possible.  The Marriott Marquis is sold out on Saturday and Sunday night, but there is still  rooms available at the Renaissance Hotel, just across the street.

Reimbursements can be to either the bank or to your personally and are post event reimbursements.  Hotel and flight costs should come in around $1800/$1900 depending our your flight options.  Registration for the event itself is free and most meals are covered by the event or IBA.