(Reuters) – Days after reaching broad consensus that labor markets have healed enough for the Federal Reserve to soon begin withdrawing support, Fed Chair Jerome Powell on Friday heard from a broad range of economic players about the challenges holding them back during the recovery.
During a virtual event held as a continuation of the “Fed Listens” community discussions launched nationwide in 2019, Powell and other policymakers heard from a restaurant owner facing hiring challenges, a hotel executive worried about the slow comeback for business travel and community leaders concerned about renters and homeowners falling behind on housing payments.
“Most of you are contending with changed workplaces, from safety protocols whose half-lives are unclear to fundamental shifts in how your industries operate, in everything from feeding people to how movies are released,” Powell said at the start of the event, in remarks that did not elaborate on his own economic or monetary policy outlook. “Business plans have been reworked, outlooks have been revised, and the future continues to be tinged with uncertainty.”
On Wednesday, at the close of a two-day Fed meeting, Powell said he felt the economy had mostly met the bar the Fed has set before beginning to taper its monthly asset purchases, with just one more “reasonably good” monthly jobs report needed before pulling the trigger in November.
But as Fed policymakers move toward what half of them expect to be a first interest-rate hike next year, they are keen to make sure they don’t repeat past mistakes by withdrawing support too quickly or, by contrast, waiting too long and allowing inflation to take hold.
Those efforts include continuing to hold a series of community discussions the central bank initiated more than two years ago as it debated how to retool its approach to monetary policy.
On Friday, Fed officials heard from business owners and community leaders about the long-lasting effects of the pandemic on their businesses and on the communities they represent, reminding them of the uneven aspects of the recovery.
Cheetie Kumar, a restaurant owner in Raleigh, North Carolina, said small business owners are struggling to stay afloat after the virus hindered sales.
“There’s only so much a family-owned operation can sustain,” said Kumar. “We can’t keep getting into debt.”
She also told officials about the hiring challenges she’s faced as workers worry about the virus, struggle to secure child care and switch careers.
And Patricia Garcia Duarte, the chief executive of Trellis, a nonprofit that supports home owners, said she is concerned about rising mortgage delinquencies for low- to moderate-income borrowers, a group consisting mainly of minorities.
“That is something that we really need to watch and intervene,” said Duarte.
(Reporting by Ann Saphir and Jonnelle Marte; Editing by Andrea Ricci and Chizu Nomiyama)