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Transcript

Laurel Graefe: Thank you so much for joining us today. This is such a treat for us. This is actually especially exciting for us at the Nashville Branch of the Fed because it is our first in-person gathering with more than just very close family members since the start of the pandemic. It is really sweet to have you all in the room with us for this intimate discussion in person back and forth. I'm told we also have several hundred folks joining us on the livestream, so very much look forward to hopefully a very lively discussion that will be engaging for everyone involved.

A very quick run of show. This event is part of a full day of activities that Atlanta Fed President Raphael Bostic, Fed Governor Chris Waller, and Fed Governor Mickey Bowman will be a part of in Nashville today to learn a bit about how we are experiencing the economic recovery, and how our business and community leaders are helping prepare us for the future.

We are going to start with a conversation moderated by President Bostic with these very generous panelists and friends who have agreed to share a bit about their experience of the local and macro economy. We will then open up to Q&A and a broader discussion with this group so please don't be shy and share your reflections, what you think we missed in the conversation, and certainly welcome questions for the panelists, or for President Bostic or Governor Waller. You might notice Governor Mickey Bowman was planning to be here in person, but there was a last-minute conflict. She is participating virtually and has prepared some opening remarks that she recorded yesterday or a couple of days ago to get us started. I will turn it over to her and then we'll get started.

Michelle Bowman: First and foremost, I'd like to thank President Bostic and his staff in Nashville and in Atlanta for making it possible for me to participate in today's event. Since I haven't visited Nashville in recent years, I was really looking forward to experiencing the recent economic growth in your area, and meeting all of you in person this morning.

When unforeseen circumstances made it impossible for me to travel to Nashville, Federal Reserve staff quickly set about creating an opportunity for me to participate virtually, and I'm extremely grateful for their flexibility. Unfortunately, my exploration of your incredible city will just have to wait a little bit longer, but it's really great to be here with you remotely this morning.

Let's start with the Fed Listens initiative. When we started Fed Listens 2019, we wanted input from the public on one big decision that the Fed was facing. This decision involved making changes to our goals and strategy for monetary policy. After holding a number of public meetings and communities across the country, and after issuing a new statement on our goals and strategy, that was enriched by what we had heard throughout the process. We decided that this kind of input could continue to inform and enrich the other important decisions that we face at the Federal Reserve.

The listening has continued, and the agenda has evolved to include pressing issues in the wake of the COVID-19 pandemic, just like today's conversation on the unique challenges brought on by the pandemic and the opportunities that exist in Nashville's fast growing economy. I am extremely pleased to continue the Fed Listens event for the Board of Governors, because I believe that providing the public with greater access to policymakers and gathering a diverse set of perspectives will help us better understand how our decisions affect individuals, families, and businesses. It will also help us better understand the challenges that people face and consider how we can help address those challenges in our work promoting a healthy economy and financial system.

The Fed's goals for monetary policy, which are to promote maximum inclusive employment and price stability, are closely related to the topics that we will be discussing today. The decisions that we face on interest rates and on other matters must be and will be informed by the perspectives that all of you bring to the table this morning. Those decisions will inevitably be better decisions after we have heard you and gained a better understanding of the challenges and the possible solutions. Thank you again for the opportunity to hear your views, and I'm really looking forward to the discussion. With that, I'll turn it over now to Atlanta Fed president Raphael Bostic.

Raphael Bostic: Good morning, everyone. You didn't have to clap for me. You really didn't have to do that, but it's really good to see you all. I have to say I'm really disappointed that Mickey wasn't able to join us today. We shared a Fed Listens event a couple years back in Augusta, Georgia. I thought we were about to have our own little tour going, I could start making T-shirts, Augusta, Nashville, but she had some unforeseen things come up. I'm really grateful that Chris Waller, another governor in DC, is willing to join us. Chris, it's good to have you here.

Chris Waller: Pleasure to be here.

Bostic: Before we get into the formal program, I just wanted to thank our staff here in Nashville. You heard from Laurel Graefe, we have Emily Mitchell, Justin Shadley, and Ruth Wortylko. They are our Regional Economic Information [REIN] team. They are our superstar group here in Nashville. Their job is basically to be the eyes and the ears of what's happening here, so that we in Atlanta can be informed about what's going on. They do a great job. They really helped spearhead this entire effort. I just want to just publicly thank you guys; you guys are fantastic.

One other thing I did want to say, because I do have to do my work for them, is their whole job is to know what's going on here. If they call you, if you get a call from the Nashville Branch of the Atlanta Fed, please take the call, and then please meet with them, because it's very important that we get all the information we can from whatever sources are the best or the right sources in the moment. I really want to thank you in advance for helping us be better.

That really is the theme of today, which is we do our job better when we hear from leaders and we find out what's happening, what's not working, where there are challenges, and where there are opportunities. That really underlies this entire Fed Listen series. I want to thank our panelists, and I also want to thank all of you for being here and participating in contributing to that conversation.

I wanted to just start just to level set so make sure everyone is aware of what the Fed is and what we do. It really does set the table. Clearly, we do monetary policy. We are a bank regulator, so we are responsible for making sure that bank institutions operate in a safe and sound way, and facilitate financial stability. We do a lot of stuff in payments, which people are not always aware of, but it's really important. Then, we really just try to make sure that communities all across this country get the tools that help them deal with the challenges that they're facing on the ground, so that all of their residents can achieve their fullest potential.

If we're going to be good at that, we actually need to know the truth, and we need to know what's really happening on the ground, not have people just tell us what they think we want to hear but tell us what we actually need to know. Our team has put together a panel here that I think is going to tell us exactly that. I think this will be interesting and very worthwhile.

I also wanted to say, Nashville is a perfect place for this. This is a vibrant place; it's growing. You have a major presence in a lot of sectors, tech, manufacturing, health, logistics, and I'm not even talking about the entertainment stuff. There's a lot that's going on here that makes this a place where I think we can learn a lot about what's going on. I'm just very excited to be here. This is a place I always enjoy coming to, and I'm really happy to be here today.

They gave me a bunch of stuff I was supposed to do about economic outlook, but I'm going to do an audible here and just say this is about listening and not telling. We're going to jump into listening right now. If there's time at the end, I'm guessing there are going to be questions about what my outlook is, and our outlook, so we'll leave that for that.

What I want to do is jump right to the panel, and we have about an hour to go through conversation before we move it and open this up to Q&A from the audience. I have a warm-up question for each of you. Once we get to that, then we'll get to the questions about our dual mandate of inflation, or stable prices, and maximum employment. I will do the warm up to also introduce each of you. I'm going to start on Laurel's end.

The first panelist that I want to introduce is Kate Burke. Now, Kate is the Chief Operating Officer of the global investment firm AllianceBernstein. We were looking at your building just yesterday from the Noel Hotel.

Kate Burke: Very beautiful, isn't it?

Bostic: It is a beautiful, beautiful building. Kate is the head of private wealth, overseeing wealth advisors, client service, investment strategists, and engagement. You guys are relatively new here in Nashville. Can you talk about what makes it an appealing home for a corporation? And then, what do you see as some of the challenges associated with that?

Burke: I'd be happy to. AllianceBernstein chose to move our headquarters to Nashville about four years ago; it was in May 2018. We did a long search for about a year looking up a variety of different cities across the country. The factors we were looking at, like any research firm would do, we had about 40 different variables that we looked at, just to start to shorten the list had everything that you can imagine, from education, to housing costs, to commuting times, to the weather, to the airport, to the infrastructure. Really thorough search. When we chose Nashville in the end, one of the things that really stood out to us, honestly, was the sense of community that we experienced here that was different than what we felt in other cities. Just the vision of the city, the cooperation between the state, the local city, the philanthropic community, the other businessmen members that are here today, really stood out the consistency in wanting to see the city thrive.

For AllianceBernstein, looking at a city where we wanted to be part of a creative community that was growing, early innings, we thought in their growth, it maybe accelerated a little faster than we had anticipated, was really what stood out to us, and it made the decision really quite easy for Nashville. We've been here, as I said, four years. We have 1,000 of our employees, we said we would have 1,250 by the end of 2024, we are obviously well on track to make that happen, though we are finding, when you say what's different, certainly since we've announced you've seen other wonderful companies also follow us here, we like to say follow, Amazon, Oracle, and the others are recognizing some of the very same attributes that we saw in Nashville, which is certainly creating a much more challenging labor market.

Not only are you seeing it across the United States, but here within Nashville I think it's even more extreme. Even what we're finding in terms of our days to fill jobs, Nashville's about 20 percent higher. There's a significant labor issue that the city's currently facing right now. The impact that it's had, the growth just around everything from cost of living to housing in particular. One of the things we looked very closely at was commuting times, so that the people who were moving from our New York headquarters would be able to have better housing, shorter commutes. They still can get that, but it's not what it once was for people who delayed their move here because of the pandemic, the neighborhoods that they were looking at pre-pandemic are now not as attractive as they once were in our starting here and they have to look further out. You really have seen the city grow significantly over the last couple of years.

Bostic: I'm guessing we're going to hear more about that as we go through the morning. But thank you, Kate, really enjoyed listening to that. Next, let me introduce Janet Miller. Now, Janet is the chief executive officer and market leader of commercial real estate services for Colliers here in Nashville. She joined Colliers in 2014. Before that, she spent 21 years as the chief economic development officer for the Nashville Area Chamber of Commerce. Janet, you have had an opportunity to see the arc of Nashville to its evolution today. What do you think the outlook is for the economy, and how do you see some of the challenges that Kate referred to as informing that?

Janet Miller: I love following Kate, because you laid the story, you just did a business case study of really my career. I would start by saying, 25 years ago, we longed to be a city that could attract corporate headquarters like AllianceBernstein. We longed to be a city that could attract an Amazon or an Oracle. A lot of work was put in by a lot of people to get us to what I think is a bit of a rarefied place in the country right now. The Urban Land Institute named Nashville, the number one commercial real estate market in America this year. We are in a unique place in a lot of ways. The challenges are very different than they were 25 years ago. In some ways they're happy problems, in some ways they are much more complicated and difficult to solve. The issues today are, with this extreme growth, lots of people want to live here, lots of corporations want to move here, but the issues are, are we keeping the infrastructure up with this demand?

What about our public schools? What about transit? A lot of these corporations, take Amazon, are used to coming from transit centers, and we have a way to go on that. There's zoning issues and policy issues because the developers coming in from New York and LA want to put as much square footage on that piece of land as they can because it's expensive. You've got to be sure that you have the right bumpers. The last thing I would say is, building on what Kate said, is there is a lot of discussion because the reason the corporations come, the reason the people come, is this sense of community and how we are connected, and we are kind, and there's a spirit here that is really special, I believe. I'm not impartial, but it's special. That is something that I think we've really got to be careful as a city to maintain.

The equity issues are fierce in this town. My whole career, I've believed that economic development and economic prosperity needs to be for all, not for a few. When you are in a city like Nashville that has so much capital coming in, and almost a frenzy around it, the equity issues become much more pronounced and difficult to solve. I think those are really the primary issues, and it isn't just going to take a mayor or a governor to fix them, it is going to take community leadership. We've done it in the past, we went from the call center capital, I worked a lot of call centers, to a headquarter city, but the issues are real, and they are urgent.

Bostic: Janet, I want to thank you for that. That's a perfect segue to where I wanted to go, which is to José, and talk a bit about our resilient and inclusive growth. Because when capital starts flying around, it's going to go where it goes. If the attention is not paid to sort of what the spillover effects are, then you can have lots of folks that are at risk of being left behind. It's one of the reasons we go out and we try to help communities deal with these sort of issues. But José, you're one of the co-founders of a nonprofit organization called Conexión Américas, which has the mission of building a welcoming community for Latino families to allow them to belong, contribute, and succeed. You've been instrumental in launching several of their economic prosperity programs around home ownership, financial literacy, and microeconomic development. You're also a professor. I'm from the academy as well. It's good to have another one on our panel. We're going to come over here in a second.

José González: Yeah, she's the real deal.

Bostic: You're teaching entrepreneurship and management at Belmont University in Nashville. José, can you talk a little bit about what your experience has been, and in particular, the challenges that the Latino community here is facing, and the things that you're working to support?

González: Fantastic, yes. And great to follow them because they're really setting the stage for what's happening. Conexión Américas, while the majority of its work has focused around Latino origin families certainly over the last decade since we have had a presence on the international corridor to Nashville, Nolensville Road, our work has really expanded into including other immigrant and refugee groups. We feel like we do have a sense or a feeling of what's happening in that community. Certainly, part of what is happening is that this prosperity, this growth, is hitting the members of these communities in some segments of community in a very positive way, and for some members of this community in a very negative way.

Let me talk about some of the positives, right? The fact that construction is booming, has been booming for so many, many years. Certainly there's an over-representation, we all know that, we hear the music out of all those construction sites, there's another representation of immigrant labor in that sector. To that extent, those that have decided to participate in that space, those small businesses of contractors that are benefiting from that prosperity, there's more work than they can handle, whether it's their working in large construction sites, like the ones that Janet manages, or those buildings, or the small residential spaces. We all know if we live in Nashville, we all know that if you need a plumber, if you need an electrician, if you need a handyman, we know it's going to take you some time because of the difficulties of access. In that regard, the opportunity for those folks is, okay, how do they grow, and evolve, and become more sophisticated business operators?

Someone that started as a small roofer, or electrician doing residential, how do we move them along the economic prosperity ladder in terms of understanding how to manage their businesses better? That's one thing that's going on the positive side. Certainly on the negative side is the gentrification that's happening, right? The gentrification that, of course, sort of emanates from downtown, and is creating a tsunami of displacement along the important corridors of Nashville and Nolensville. We've started to see that, and it's only going to accelerate with the continued growth and prosperity and expectations for what's happening to the city.

On the one hand, we have an asset in the foreign-born population. On the one hand, we love going to that part of town, and going to the ethnic restaurants, and certainly claiming that Nashville is better because of the diversity of this population. On the other hand, not only the housing gentrification, but also the business gentrification that's happening. There's many who have established their businesses along the corridor, from the pupuseria from El Salvador, from the kebab from Turkey; I had a great lunch a couple days ago at the Uzbek restaurant, OSH. What's happening is all this development that's starting to come...those folks, how do we make sure that we protect this important asset in our community? Not only because food is great, but because these are folks that have made Nashville home. How do we make them participate economically and civically in life?

Those are some of the things that certainly we are spending a lot of time thinking about, how does our work evolve as we turn 20 years old here next month? How do we adapt, adjust? What conversations should be having? What voice should we bring into that conversation to make sure that 20 years from now, we're just now looking back and then we look at corridors like Nolensville, and they'll be great, lots of vibrancy and lots of new people, but then all these folks that lived there and worked there and have made home, they're not living an hour away having to commute in for what they're doing.

Bostic: There's a lot in that, around like evolution of businesses and the vision to deal with growth. Having the people who made the neighborhood enjoy its fruits as it evolves and improves. Then just for you, we're thinking about the same thing. How do you, as an institution evolve to serve the needs as they evolve? It's a question I think everyone winds up asking, and it's another thing that I'm expecting we're going to get out of this visit, which is: We are going to have to engage differently, as our communities evolve as well. Let me now turn to Shanna Jackson, who's the fifth president of Nashville State Community College. Shanna...

Shanna Jackson: It's Shanna.

Bostic: Shanna. Shanna, they did say that here, actually.

Waller: I practiced.

Bostic: Yeah, I obviously did not. I should have. I should have been all over that. Anyway, Shanna, very nice to see you.

Jackson: You too.

Bostic: During the pandemic, I've talked to a lot of people who are running academic institutions and higher learning and the challenges that the pandemic has wrought on you. Can you talk a little bit about that and sort of how you're now pivoting as we get to this new place and what you're thinking about for the future?

Jackson: Absolutely. The last two years have been so challenging to higher education. When the pandemic first happened, there was a swift transition from traditional classes on ground to online and that was challenging, and not just for the students. It was challenging for our faculty and also for our staff. We invested a lot as Nashville's community college in really providing resources to faculty and supports to students. Normally, when the economy takes a downturn, you see a rise in community college enrollment. We did not see that, and we still have not experienced that. Every public community college in Tennessee has been down in enrollment the last two years. Some of our smaller institutions, not as far down, but national, state, double digits in enrollment. What we're finding is that students have to make choices and sometimes it is just about their children.

We actually serve a large population of adult students. When their kids went virtual, they had to as well. If you only have one device in the home, that's going to go to your child. We mobilized to make sure that we were able to provide laptop loaners to students. We have really increased our mental health services that we've had to provide for students, which was actually a growing need before the pandemic. Now what we see is employers scrambling for talent. Of course, I like to think of Nashville State as a workforce solution partner, but I came to Nashville actually in the 1990s to work for the Pillsbury Company. In manufacturing, you have a production line. You put in your raw ingredients and you crank out cake mix.

That doesn't work that way in higher education, period, because your raw ingredients are not coming in on large rail cars. They're very diverse and very different needs. What I see coming out that's exciting is that we're having to reinvent ourselves and higher education was very, very slow. The pandemic actually accelerated the work that we needed to do anyway. I think you'll see a lot of new partnerships with our employers to say... telling students to go to school and get a job, that narrative has passed us by. I think it is going to be that employers work with us to hire students. Let's train them as they are on your jobs to be better employees.

I just think that there's a whole new thought about higher education and many people are focused on skills and we need skills and that is true, but you will always want people who can think critically, that can work in teams, that can problem-solve, and we've got to find a way to balance the two. It has been a very challenging two years. I don't know that we're out of it yet. We are still looking to see if we are, but I can tell you as the local community college, we are laser-focused on making sure our local talent has access to education and the training and skills that they need to enjoy the prosperity that we see in Nashville. We are redesigning ourselves as we speak.

Bostic: Shanna, I have to say, you touched on so many things that we in Atlanta are working on. We have a partnership called the Rework America Alliance where we're trying to get community colleges and employers to talk about what the skills and programs that need to be... that the workforce needs to get talented with and then talk with communities to let them know these opportunities are there. All the things you're talking about and the evolution to make sure that there is a much more coordinated community is really important. I said, call our REIN team; call her too. Right? She can really be an asset for all employers as Nashville starts to evolve. We're going to keep an eye on you. I think great things are going to happen.

Now let me introduce Josh Mundy. Now Josh is the owner and chief executive officer and also the cofounder of Pivot Technology School. And he owns Zam Investments. Do you say Zam or do you say Z-A-M?

Joshua Mundy: Zam.

Bostic: All right. All right. Very good. I've got to check on these things out. Right. Joshua, can you describe the opportunities you see for workers to improve their career paths in Nashville and talk a bit about how your company helps individuals advance their careers?

Mundy: Pivot Technology School really was founded to really give minorities an opportunity and a growing technology space. Nashville is becoming like the Silicon Valley of the South and we see that there are major opportunities here, but minorities are getting left behind in droves. Really what we see is that we can provide the training all day long, but how can we get employers to start hiring some of this new talent? A lot of employers are looking from a top-end perspective and they have top-end needs. From a senior level developer or everything on the senior level or C-suite, but really there's a huge opportunity to cultivate junior level talent in your organization. I always say that it's not really that it's a talent shortage, but I think it's an opportunity shortage. And then how do we create direct pathways for success and how do we create direct pathways for opportunities?

We work with corporations all day long to really up-skill their current workforce. Individuals that may be in customer service making $13 an hour: How do we invest in those employees and give them the skillset that they need so they can take on some of your junior level roles in tech and then in the next two or three years, those same individuals will be mid-level to senior-level developers. That is how you create your own internal pipeline. We're doing that all across the country, working with a company called Shipt. They're in Birmingham, Alabama, starting to work with a lot of companies in Nashville. We will be working with Mars, Bridgestone, we're going to be working with a lot of organizations because it's really about how do we create the opportunity on the back end. How do we train or have custom cohorts that train individuals on exactly what your organization needs?

When you invest in these people, they're going to be rock star employees. We work with organizations on the retention as well. There's a lot of great resignation and people are really tapped into purpose now after the pandemic. It's not really about the job anymore. It's not really about making the money anymore, because now you can't even give it away because more individuals are like, "What am I going to get out of this? What type of purpose, what is my trajectory in your organization?" They're starting to ask a little bit more questions because employees are really in the driver's seat now, from they're working at a job and they may be making $19 and they'll say, "Well, across the street, they'll give me $20. You don't give me $20, I'm just going to walk across the street and go work over there."

It's really a competitive market, but what are you going to do to stand out as an employer? Are you going to make true investments in the community so that we all can thrive? Nashville is booming, there are more hotels popping up every day, more restaurants, but who is going to work them? If your local workforce has to live 45 miles away... I spoke last week, I said, "Would you drive 45 miles for $12 an hour? Would you drive that far?" It doesn't make sense. How can we really make sure that everybody is getting the investment and then also making sure that they can get the salaries that they need so they can really thrive in this new Nashville.

Bostic: Joshua, thank you for that. Our next speaker is E.J. Reed. E.J., I have a feeling you've been living this challenge around retaining workers because as the cofounder and CFO for Slim & Husky's Pizzeria, you're trying to attract people all the time on the front lines.

E.J. Reed: I am.

Bostic: Can you talk a bit about some of the costs and pricing pressures that companies like yours are facing and what are you trying to do about it? As you think about your answer, I'd also love to know, do you think these pressures are going away six months from now or 12 months from now? Are we going to be in a different place or is this something that's a stronger and more durable reality?

Reed: Absolutely. It's interesting everything that the panelists have already said affects my business in very unique ways. We made a conscious choice when we opened our first location right here in north Nashville, really almost in walking distance to where we are back in 2017, a lot of people thought we were crazy for opening a pizza restaurant in the middle of north Nashville in a predominantly historically African American neighborhood, pretty much a food desert, wasn't really much around to eat, no quality grocery store, quality resources in that neighborhood. We really made a conscious choice to open Slim & Husky's right there, and kind of be a beacon of light and of hope in that community and also be a job provider. It was very interesting, one of our first employees, a young guy, we were doing a job fair and he was just standing on the bus stop.

He was just kind of looking like, "Man, when you guys open?" I'm just talking to him and he was like, "Man, can I apply?" I was like, "Of course, come on in, fill out an application." His next thing was, "Is it okay if I walk to work?" He lives basically lives behind where we are. It was just one of those things where it just kind of felt great to be able to be in a community with people that really need opportunities, right? And that was one of the key things that we wanted to do with Slim & Husky's. As we've grown and expanded, we have locations in Atlanta, Georgia, and Memphis. We're in areas that need that, where people actually need these opportunities and really working to provide the best impacts that we can in those opportunities.

Now, one of the challenges that we have, of course, now is dealing with commodity price increases, right? How do we stay competitive? How do we offer salaries? How do we make these choices and decisions when the cost of cheese is going up, when the cost of corrugate and boxes are rising every day? We're really trying to have to make these critical decisions. Now some of those critical decisions might mean we have to figure out how do we adjust our staff on a daily basis. How do we implement technology that could eventually have a negative impact on the labor that we have because we need to...How can we do more with less? Because prices are increasing. Individuals' discretionary income is reducing because now they're having to make decisions. Okay, if gas is $5 a gallon, that means I can't go get my Friday night Slim & Husky's pizza and beer, right? People are having to make these critical decisions. It really does affect our business.

Bostic: And is this going away or is it...

Reed: It's interesting. We meet with our food vendor pretty regularly now, much more than we have ever before because now I need to know if a case of cheese is going up $6 a case. I need to know that immediately, right? I'm meeting with them and even from their take it is, "I don't see it reducing, but I kind of see it kind of leveling off here at some point." We haven't seen the level off yet.

I got a text yesterday from one of my operations managers and he said... it's this running thing, like bacon. Certain proteins, like bacon, smoked meats, cheese, and boxes. Those are the things we're looking at every day. It might seem trivial if the cost of bacon is going up from $70 a case to $80 a case, but that is a huge impact on our business, especially when you're selling thousands of pizzas a week. I don't see it going away quite yet, but hopefully, you smart gentlemen over at the Federal Reserve... young ladies and young men can help put some policies in place that can start stabilizing this thing a little bit.

Bostic: Yeah, we're going to try.

Reed: Okay. I'll hold you to that.

Bostic: All right. Well, thank you, E.J., and next up I have Chrissy Wieck. Chrissy is the chief sales officer of Western Express, which is one of the nation's largest trucking companies. Chrissy, we were talking earlier about how nobody knew what a supply chain was until like a year and a half ago. Now everybody knows what it is, and your company is very much deep in all of this. I want to follow along with the conversation with E.J. Can you talk about some of the costs and pricing pressures your firm is facing, and with the particular focus on this issue around wages that Joshua talked about?

Chrissy Wieck: Yeah, absolutely. First, I just want to say to everyone, welcome to Nashville, including the recent headquarter moves. Happy to have you as a native Nashvillian. There are a few unicorns in the room today. For us, we are a pretty capital-intensive business. I'll give you a couple of examples. Our driver wages, and we have a pretty fluid workforce. The construction worker is also a driver, is also a dock worker, and is also a port worker. That community of people, when the supply chain got disrupted, they all displaced into different roles. That community has a lot of power, the worker has a lot of power right now. For us to retain drivers and keep our trucks moving and try to get the supply chain back into a supply-demand area that makes sense, we increased driver wages by 40 percent last year.

Bostic: 4-0.

Wieck: 4-0. When you think about, is that going to come out, you don't give someone a raise and take it back. The driver wages are here to stay, and we're not the only people that did it. I think on Friday, the Wall Street Journal released that Walmart was advertising a $110,000 for a driver. But those drivers sleep in their bed every night. Our drivers are out for two to three weeks at a time. If I can sleep in my bed every night and make $110,000 a year, imagine what I'm wanting to make if I'm going to not sleep in my bed.

On the capital-intensive side for us to buy a trailer... in truck lingo, a van is what you guys think of as an 18-wheeler, the box on the back. For us to buy trailers, the van part in 2021, it costs us $28,500 for a trailer. We buy about 1,500 to 2,000 trailers a year. This year, the first pricing we got, and we have a lot of buying power because we're one of the largest trucking companies in the country, the first price we got was $52,000 per trailer. If you think about that, it is cost-prohibitive, right? You can't... your business can't function without raising the cost of what we do every day. Our actual cost to do exactly what we do per mile has doubled in five years. Which is why everything that you're buying is more expensive, which is why you're going into Target or Whole Foods or wherever you shop and you're not seeing your product, which is why your bacon is $10 more a case. It's all connected.

Everyone just happens to know that now and has lots of advice on how to fix it. Just like everyone has advice for you! I'm joining you in this party! But is it going to change? I spent Thursday and Friday... there is a woman in town who has a research group called the Thompson Research Group and she hosted 25 companies, CEOs, and CFOs. I was so lucky to participate and listen. Every single person mentioned the supply chain. Every single person said they don't see the cost changing. Every single person said they had 18 to 24 months of backlog. Even if the economy slows down, it's not going to feel like it has slowed down to the builders, to people that have building products companies, to the trucking companies. In no small part, because in a typical slowdown for us, when it ramps up like this and rates are really high in trucking, a lot of people go buy trucks, and most trucks on the road are owned by one person who owns that truck. The top 10 carriers in the country only represent 3 percent of the market. That hasn't been able to happen because they haven't been able to build trucks because of the supply chain. There hasn't been an infusion of 200, 300, 400 thousand extra trucks to take the pressure off and they're not going to be able to build them. We won't have new cargo ships 'til 2024. We won't have new trucks 'til 2024. That supply chain and supply-demand ratio, isn't going to correct.

Bostic: Thank you for that sobering perspective.

Wieck: I'm sorry to be doom and gloom.

Bostic: No, no, no, no. We want to hear the truth. That's what I said at the beginning. Definitely want to make sure we're there. Well, thank you for... that was the warmup question. Hopefully, you guys are feeling very warm because I wanted to now turn the conversation to get your perspectives on us and our dual mandate.

As Mickey said in her opening message to us, we have two mandates. One is stable prices and that's usually measured by something like inflation and the other is maximum employment. Let's start with the price mandate as well. We have consumer inflation; it's running somewhere north of 6 percent. Our target is two. We're a bit away from that. Can you talk about how this current elevated level of inflation is impacting your business and how much focus do you think that we at the Fed should put on promoting a return to 2 percent? We'll open this up. We didn't actually go over... If you have something to say, raise your hand I'll...

Miller: I'll start. To me, the full employment situation in a city like Nashville, we are so blessed people are moving here because we would really be up a creek if we were one of these cities that has brain drain and people moving away and not coming back. Because we are picking up 20, 30 thousand new residents a year who are filling the jobs. To me, the employment situation, we have a huge issue with the skills gap and all of that. But from a sheer unemployment level, we reached our unemployment level, pre-pandemic, faster than most cities, right? We bounced back quicker. To me, the inflation thing though is... I mean, I run a big commercial real estate company and it is an issue and it's being fed by... Nashville is on the radar now, and these tier-two cities are great investments. It's where these investments want to come.

You've got firms sitting in Dubai or New York or LA or wherever saying, "Get in there." They just want to get in here as an investment. They're jacking up the prices beyond the construction cost increases. Then you've got the whole cost of construction that has gone up. To me, a frenzy is not a good thing. It's not a good thing for the average resident. On the residential side, I just think it's heartbreaking that your average first-time home buyer is just heartbroken 20 times in this town because they make 20 offers and somebody walks in, who's got more wherewithal and they're throwing down an extra $30,000 and no inspection and all cash. To me, it is the whole ecosystem is impacted, as Chrissy was saying, by the inflation piece of it. In a city like Nashville, where you do have a bit of a darling in America... we chased Austin for all those years. I spent so much time in Austin trying to figure out what their secret sauce was. Nashville is that city now. To me, it exacerbates the issue of inflation because it is all connected. That is the one that's impacting every single human being and is probably in my view the most important one to really get after.

Reed: I really couldn't agree more with what she said. As I stated, it has a direct impact on our business. We just recently increased our prices and now we're, as our commodity prices keep increasing, we're having to sit down at the table and make those decisions again. We all know you can't run a business if your prices are up and down all the time to your customer, but that's a lot of people's business model when we're having to pay for items that prices are going up and down. It has a direct effect on our business, and then it turns into a discussion of quality. How do you achieve the same results if all of your cost of goods sold have gone up 25 percent? It's almost impossible, especially if you're not so in tune to your business. I can see why a lot of restaurants especially go out of business because prices up and down. I mean, it just makes it very difficult to operate.

González: For two different thoughts. One is a story of what anecdotally see happening in town in terms of workforce development. It's very interesting because hospitality and tourism, of course, one of the first industries that shut down during the pandemic, right? And there's a lot in particular, a lot of immigrant women that worked in that space. Working in the cleaning crews that all this hotels that we're building. When the pandemic happens, of course, they go home. They go home, their jobs are no more. Construction never slowed down. What you started to see, very interesting, is you started seeing crews of women, these women that were working in the hotels, working in small construction space, primarily painting. You started seeing around town, lots of women-only, or predominantly women crews doing painting and heard, talked to a lot of them, heard, "Well, I used to make nine, 10, $11 an hour at the hotel, had to work crazy hours, weekends, so forth. Now I'm making $17, $18 an hour. I only work Monday to Friday and more manageable times."

When the economy kicked back in and we start opening the hotels again. Well, they called them and they're like, "Thanks. No thanks. I'm not there." It's interesting. That's one of the good aspects to that segment of the population that not only has evolved in their economic prosperity, they have a better quality of life, they're able to manage, they have work life balance, many of them are moms and whatnot. That's one thing that is interesting in terms of how demographics are shifting, and the workforce is shifting.

One point, I don't think the Fed makes immigration policy, but one point that I don't hear being discussed a lot in these conversations around labor force is the role of immigration. I think that one thing that the majority of the country agrees on is that immigration policy is broken, and it needs to be fixed, and it hasn't gotten fixed. At all levels from those women, from those folks that clean the hotel rooms, to the computer engineers. In companies like Amazon or Oracle, the shortage is at all those levels. I don't hear conversations often about the role of a comprehensive immigration system that works to alleviate those fluctuations, agricultural workers, temporary workers in the service industry, and then high-end skilled jobs. That's a conversation that I think should be elevated because that will be, should be one, it's not the only, but it should be one, of the pieces of the algorithm that ought to fix this.

Bostic: I just want to make it clear. The Fed does not do immigration policy. All right.

González: But the influence of that, whose role is it to have that conversation to elevate that conversation? It should not be organizations like ours. The usual suspects, the advocate organization. It should be a conversation that should come from those that can make policy, understanding that the Fed doesn't make that policy, but you have influence and access to those that can think about it in a more, less politicized way. That's the argument we've been making for 20 years. It's an economic argument. This moment is the moment in the last 20 years, that much more, the better moment to make that argument than it's been before.

Bostic: One thing I do tell people, and this is another reason why I like doing these sort of Fed Listens events is that we make a list of the issues that come up. Then, as I talk to policymakers in my District, they always ask, "What are you hearing?" Then we can say, "We just heard an impassioned perspective that an immigration policy fix would be helpful. We're not going to tell you what to do or how to fix it, but that someone needs to work on those things. All of these conversations are actually quite helpful. It's definitely something that I've added to how I, when I took this job, I didn't really think about us in that role, but it winds up being a very important role. It's another channel to get information out. Anyone else have thoughts on inflation?

Mundy: I have a question. Are the Feds seeing companies increasing prices just to increase prices, to increase profits, where they may not have a goods problem from just getting the materials in from overseas? They have all the materials that they need, but they're just increasing prices. Because they see across the board, that prices are higher, and they just want to increase profits?

Bostic: I don't know the answer to that question.

Mundy: Okay.

Bostic: But let me answer the question like this. What I've heard today is that every single last one of you has a labor issue. Every single one of you is facing challenges in terms of your cost structures. And that there's only so long you can hold out before you're going to have to pass that increase cost to the final goods. I know that. What I don't know is what the optimal amount of increase is and whether they're going just to that number or whether they're increment above that. It's very difficult to really tease that out. It's actually difficult to even ask the question. You think about, if we were going to do a survey, we were going to ask someone, "Okay, so you raised prices $6. Should it really have been $4.50?" That's a hard question to ask. So, we don't really, I'm not sure we, whatever the response would be, would be very helpful for us.

Mundy: Yeah.

Bostic: Except to know it's higher. That's how we think about it, or how I think about it, I'd say. It's something we're going to watch, and I think you start to get answers to those questions as consumers start reacting and responding. Another thing that we've heard across the board is that when these prices increases happen, by and large people are just accepting them because they know that's the world that we're in. They're going to pay for them. When that stops happening, then we'll start to see for which businesses that $6 was discretionary versus which businesses that is actually the number. We'll start to see those things out. We don't really know that answer right now.

I'm going to move on. That's the first mandate, stable prices, and hopefully you guys are all subscribed to... I'm going do a commercial, I'm sorry about this... Subscribe to our website and our social media presence because we do a weekly newsletter about the things that we're seeing. We understand. I actually did a...sorry, our folks for some reason, think I can act...a video and I talked about how I was thinking about the economy and in terms of inflation I said, "This is frontline top order priority for us and we're going to do what we need to do." Hopefully you guys are all on those things. If you're not, find one of us before you go, and we'll make sure that you have the information to make that happen.

Let's go to maximum employment. That is the second mandate. When I think about maximum employment, the way I characterize it is if someone wants to work, they are able to find, or they have, a job that is close to their full potential. When we get there, that's maximum employment. There's not a lot of extra space that we have out there. With that definition in mind, how are you viewing the labor market today? To what extent do you think that we are close to, or at, maximum employment? This is a conversation we have a lot among our colleagues. What do you guys think on that?

Wieck: I feel like it's a worker's market for sure. We operate all over the United States. We have facilities in California, Connecticut, Virginia, Pennsylvania, Nashville, and then Laredo for cross-border. For us, folks have a variety of choices. I would say every single level of our organization has changed, has had a major compensation change outside of the C-suite in the last two years. From my perspective, a worker can demand whatever they want, whether they want to be in the office, out of the office, working remote, whether where they want to live in the city where they work, they really have a lot of options. From my perspective, we are at a place where the worker is in charge.

Jackson: I actually see it from two perspectives. I'm in your boat when it comes to the employees at Nashville State, which is different for higher education, but finding an accountant, a police officer, anybody in IT right now, it is an employee's market. We're finding ourselves with lots of job openings. Anyone who's interested please go and check out our job posting. On the student side, I think it's still the equity issue. There is a gap that exists between white students and black students for how long they persist, how long they're retained. Did they actually get the skills and training to be able to get that really good paying job?

I think that there is still a lot of work to be done in Nashville to address the local talent, the kids coming out of public schools, the adults who never completed their education, to be able to participate in this prosperity that's happening. You have to ask, who's getting the jobs, the jobs that are opening, the jobs that people have gaps, who are they actually hiring? You have to ask, is it the local talent or is it the people you've recruited from another state? I still think there's a lot of challenge around employment when it comes to who's getting it and what jobs they're being employed to do.

Bostic: Shanna, I'm glad you spoke to this because I was going to make sure I asked you this question about, how are your students doing? Are they being placed faster in different kind of jobs? Do you guys track that? What's the experience been?

Jackson: We're having the challenge of students going to work and not completing their programs.

Bostic: Not even coming, oh.

Jackson: Many of them, you think about healthcare, IT, hospitality, like our culinary students, they can't complete fast enough. We are measured on outcomes. Although we're happy you're employed, we still need you to come back and finish your degree. Our health science programs, those students have jobs before they graduate, our nurses, we do the RN and nursing. Those high-demand positions, they're snatched up quickly. Our struggle again is getting them to actually complete their program so that they have that credential in hand for when things change in the economy.

Right now, people are thinking very short term, I need a job today, because they have to take care of their family today. We want them to understand that in the long term, I don't think that trajectory and that research is going to change, the higher degree you earn are the more likely you are to have increases in wages over a period of time. But right now it's a very market-driven, I need it right now today. We're just working to be flexible to give students options so that they can actually do both, working and go to school.

Bostic: I think the evidence is pretty clear over the last 30, 35 years. There's definitely been a premium in terms of salary, if you can get that degree completed. I'm not sure that dynamic has reversed. That message is an important one to still get out, definitely. Others have thoughts on maximum employment on the labor market and how it's playing out?

González: I'll just add a little bit that and concur that generally speaking, naturally, if you want a job, you want to work, you're going to have a job. The challenge, to piggyback on Shanna's point, is what is the best job that you can have? That's where education and training for those, because of course higher education is not the only path or the only solution. Back to my point about those women. Now they're workers in a small entrepreneurial firm doing painting. How do we take those skills, these women that are hard workers, entrepreneurs, how do we move them to actually then become the business owners, perhaps?

How do we get them to have the skills, to know how to run and operate a small business, and how do we get them to be able to eventually be working in some of those big projects, big buildings that are being built every single day around us? Moving people along the economic ladder of prosperity, what's the skillset? Because again, if you want to work, you're going to have a job today, but what's the best job that you can have, and that's where the equity piece comes in.

Mundy: I think it's different in tech. What we see is that a lot of organizations, they want five to seven years of experience. I'm reskilling individuals that are professionals, they have a college degree, but they don't have the five to seven years of experience. It's hard for them to go get that opportunity. Or we get approached with, "Hey, we want an apprentice." Let's create an apprentice program. Okay, cool. But those apprentice programs are paying $35,000 a year. That's way below average in tech. You're going to bring my individuals in at $35,000, and then when they get done with the apprenticeship program and bump them up to $45 and $50 [thousand], well, the average level or the average junior role in tech is $65,000. We see a lot of organizations, they approach us in that way, which is like, "No, I want it to be equal across the board." I want to create the opportunity. I'll say VIP access. If you want to come to our school and partner with us, we want to take them to the front of the line because in tech the algorithm determines everything. When they receive a resume, if it doesn't have the certain keywords, they're not going to get a call back, just what it is. How do we set these individuals up for success and also be able to give them an equal opportunity to make the good money? I don't want to have individuals that are always in the affordable box. I'm over that. We can't keep dumbing this thing down. No, I'm going to give people a skill set. Are you going to create opportunity, so then they can go and live in the downtown condo? Or they can go live in 12 South if they want to. That's what I'm seeing.

Bostic: That's good. Thank you.

Burke: Just to build on that comment and the concept of maximum employment, I think we have a lot of people employed right now, but the last two years in particularly working remotely for our organization, where so much of what we do learn apprenticeship model, we pay them higher than that. They come in as full-time employees, but they're working. The idea is that you're getting on-the-job training from someone who's been skilled in that seat, and you're learning versus having a comprehensive training program that you work through independently. While we've onboarded 400 people remotely in the last two years, and they're smart and talented and they want to learn and work hard, but for us to be able to maximize their opportunity, and for them to want to have the maximum opportunity, requires also some compromises about how and when and where going to work.

Right now with the employee so much in charge, they're making some choices around saying, "I want the flexibility, or I want the purpose. I want all of that, and I want the training and the skills developed at that same pace." Quite frankly, despite working really hard for two years to figure out how to deal with remote employees and to provide them that training, we don't have it figured out yet. We need that balance in between, in terms of what we're offering and for the employee also to say, "I want to take advantage of that maximum opportunity and come back to the office and do that work and learn that way." While we're trying to figure out this new paradigm, we're working in terms of how we're developing and training our employees because we tend, if you look at AllianceBernstein, we have a lot of people who are with the firm 20, 30 years because they joined us early and they built their careers with us.

Historically, they built it in-person in the office with us. If that's not going to be the future, then we are really reflecting on what is our talent acquisition model? How are we partnering with people? How are we developing them so that they can have fulfilling careers and ideally have more flexibility than they've had in the past. If someone has solved for that, please call me because we don't know how to do it. We're working on it, but we really don't know how to do it yet perfectly.

Bostic: I think we're all trying to figure that out. When I reflect on the pandemic, and José, you spoke to this a little bit, but I think this happening across the board, people were sitting at home for a year, year and a half and it gave them space to think and reflect on, how do I want to live? How do I want to work? What are the things that are important to me? What we found is that many of them discovered the answers were different than what they were actually doing. José, you talked about the ladies who were working in the hotel and now are painting. They always were able to paint, right? It just never dawned on them that, well, maybe I should try and go do it.

Then there's discovery that happens at that point. A lot of what I'm seeing in the labor market is the churn, and a lot of this churn is because of these reflections and the discovery of new answers. The other part of the churn is we still want to talk like the virus is done. The virus is still out there, and there are areas that are unresolved, and the effects are still present. You think about childcare. The childcare industry across the country has been devastated. We don't have that space and that capacity to take care of children. Families are trying to figure out what to do with that as well. Retirees and the number of retirements, I think the statistic is we had 1.5 million early retirements or unexpected retirements over the course of the pandemic. That's another large labor gap that people would be in the labor force, who are not there. A question we're asking, I'd love your thoughts on this if you have a reflection, are they coming back or are they gone for good? What do you guys think about that as a question?

Miller: I think they're gone for good. I just think quality of life became this thing when we were all sitting at home in our yoga pants. I just think a lot of choices were made. I would also say though, because I agree onboarding a new employee virtually is just almost impossible to do. You can't maintain the culture of the company. I'm a balance person. I don't want to just recruit big corporations and I don't want to just do small business. It's all about balance. To me, there has to be a balance where the employee isn't 100 percent in the driver's seat because we have requirements as a business that we need some humans on site. I think that the ideal world is where there is a balance. That's why I think you're going to see a lot of employers go to this hybrid model which is, "Okay, I'll meet you halfway. You work home two days, you come in three days." We've got to keep our business objectives in mind as well and the employee being 100 percent in the driver's seat isn't a healthy balanced situation either. I'm just hoping we can get to a more balanced place.

Bostic: That is something we are definitely going to keep an eye on as we continue to engage with all of you. One thing I try to tell my business leaders and others in the community: if you see something that's innovative or that seems to have solved the problem that you know others, call us. Don't wait for us to reach out to you. That can be very helpful in helping us understand what's happening. This has been really fast, and I want to make sure that we have some time for Q&A. Before I do that, I wanted to give Governor Waller a chance to say some words. Now you notice I did the whole moderation here. That's because he didn't know he was coming to Nashville until Thursday, and then his plane landed this morning at 7:45, so we weren't sure he was actually going to get here in time. We scheduled this that way just in case. I want to really thank you for being so flexible and really happy you were able to be here for the whole panel.

Waller: This is actually my first Fed Listens event. Even though I was in the Fed in 2019, I was a research director at the St. Louis Fed. I wasn't a governor or president of the bank. I want to take one moment and say that this event we're having here is due to Mickey Bowman. Mickey was sitting there. We did our framework review, we did the Fed Listens, and then we said, "Oh in five years we'll do this again." And Mickey's like, "You mean we only listen every five years? I think we should be listening all the time." Mickey was the one who decided to keep this thing going. Now one thing that's very different, even from 2019 which doesn't seem like that long ago, but in 2019 a lot of the discussion was about the labor market, but it was like, how do you keep the labor market going? How do we keep jobs available? How do we keep some upward pressure on wages to bring in marginalized workers back into the labor force without really worrying about inflation?

Because inflation wasn't even getting to our target of 2 percent. Wow. What a change. Now it's all about inflation. It's about shortages of workers, wages going through the roof. It's just a completely different environment. If we had not set one of these things up and we weren't going to come back to you in two more years. It's important for us to have that. As I listen, I would just say the first thing, if you're in Nashville, enjoy it because there are a lot of cities that would love your problems. But yeah, Nashville had the housing problems, construction, labor issues long before COVID and this hot economy that we have now. It just doubled down on the Nashville economy.

Just some general comments, immigration, I agree. We're short somewhere in the neighborhood of one and a half million immigrant workers from where we would normally have been. There's like 4 million visa applications for immigrant and labor to come in. I talked to a Habitat for Humanity builder down on the Texas border with Mexico. He was saying, I can't get any labor. Local construction is driving up the wages. He said, "I can see my workers. They're right over there on the other side of the river. They can't get in here to help me build affordable housing." The immigrant labor thing is a big deal. People are not going to go back into hospitality and leisure. Gone are the days where your room's going to get cleaned every day. This is one of the innovations that firms have to adapt and say, if there's a labor problem at some point that job's just going to go away, and I'll figure out some other ways.

Restaurants are the same way. That's constantly. I remember when I was a kid working in fast food in the '70s during the last big inflation, one of the things that happened was you let the customers get their own drink. That was unheard of. What do you mean let them get their own drink? We have somebody back here, they pour the drink, they hand it to the customer, and they're like, let them get it themselves. The job went away. That's what starts happening in these kind of critical high-wage, high-demand that firms just start figuring out. I think E.J., you said it now, you just start figuring out a different way to deal without the labor. That's just part of the natural process of labor markets. Housing, the national housing market is beyond belief. I sold my house yesterday in St. Louis to an all-cash buyer, no inspection. I love it, but I'm trying to buy a house in DC and now I'm on the other side, going this is insane.

The housing market is definitely out of whack. We'll see how the interest rates start cooling things off going forward. Mortgage rates are up almost 200 basis points or two full percentage points just since December. That should have an impact on the housing market. Then as one other thing that comes up, and I always like to talk about this, is just skills and training. Big shortage now in tech. That's all I hear, we're short tech people, we're short tech people. Well, you can't say, "Well go to college for four years and then get your computer science degree and come over." No, you have to give them the skillset now in a very short period of time.

This is true with healthcare workers as well. Not everybody needs to go to college to have a high-paying job that is in high demand. I say that as a college professor for 30 years. College isn't for everybody and it's not necessarily what we want everybody to do, but they have to have the training, whether it's onboarding or in company, or it's programs that bring people in and give them their thing. Vo-tech training in this country needs to be improved in my humble opinion. We're going to be so short of plumbers and carpenters and electricians in the next few years. The average age is something like the late 50s. We've got to get people trained to do these jobs and we'll all feel that if we don't. Finally on inflation, Raphael and I just get hammered over this every day and it's been a shock. We went for a decade where we could not get inflation to 2 percent and now we're staring at over 6 percent. It came on very fast and we're hoping it'll go away relatively fast. That's our job and we're going to get it done. I'll just stop there.

Bostic: Thank you, Chris. It's good you touched on so many of my soapbox issues. That plumber, electrician thing I talk about a lot, and the vocational training. I ask, I actually just... I'm having plumbing problems in my house so it's also some PTSD.

Waller: Little self-interest at work.

Bostic: We all have paid a lot of money for a plumber to come and do a relatively simple fix. They get paid a very high hourly wage if you do the math. Then I always ask, how many would want your child to be a plumber, an electrician? No hands go up, so this is also an us problem. We have to really be honest and true to ourselves in thinking about what defines a good job and what matters there. All right, I've talked too long and I'm getting signals from the back. We've got to go to questions. We want to open this up for Q&A. There are two mics in the front. If you're in the room and you have a question, please approach the mic, introduce yourself, and then please do ask a question so that we can move on. I'm going to open up to you guys. And while I'm waiting for people to move, I have some backup questions just in case. Oh, we have some people, very good.

Harry Allen: Good morning. I'm Harry Allen with Studio Bank. And Shanna, you mentioned mental health issues with your students. And José, we had a brief conversation about engagement of students at Belmont where you are. I think that this pandemic has taught us a lot, but it's harmed us a lot as well. As we think about workforce development and the engagement of students, can you share some perspectives about where we are and what universities or colleges are thinking about?

Jackson: We are really trying to address mental health for students. One, to recognize it for themselves but also faculty are not social workers, they're not mental health professionals, they're not counselors. Just trying to educate faculty and staff on how to identify that it's not a behavioral issue, perhaps there is a mental health issue. I don't think that'll go away. The community colleges are different than the larger universities. We don't have a mental health office. We have to partner with organizations to be able to serve our students better. We are going to continue to serve the whole student at Nashville State, which includes the food issue, the transportation issue, the childcare issue, and the mental health issue because it's not that they always identify as a student, they identify as a person first. We need to treat and understand the whole person so they can be in a position to learn and get the skills and training they need to go to work.

Bostic: All right, thank you.

Speaker: I have two questions, a national question for the Fed and then a local question for José. A week ago in a letter that Jamie Dimon of JPMorgan wrote, he said, in hindsight, the medicine was probably too much and lasted too long, referring to the pandemic era stimulus. With all the discussion going on about trillions of dollars of additional spending, I'd like to learn what the Fed's position is on that. Secondly, José, you talked about your constituents on Nolensville and being concerned about gentrification. What about the constituents that in your community that own that real estate that would like to enjoy the American dream of having their real estate values go up and realizing that gain in real estate? I'd like to get your comment on that.

Bostic: I'll go first. I think the key is the most important word in what Dimon said was, in hindsight. I think it's important that everyone just really remember where we were back in March of 2020. We didn't know what was going to happen. We knew it was going to be rough, but we didn't really know how long it was going to last, we didn't know how deep it was going to be, and we went through a number of different waves. The first funding only went through August, if you remember, because we were doing surveys and people thought this was going to be like five or six months and we'd be done. Then we got to July and it was like, oh, I don't think this is going to be done. Then we had a second wave and then we actually needed a third wave because we're two years in now.

To my mind, the relief actually was extremely successful because at the outset there were projections that we were going to lose thousands of businesses, we were going to have an eviction, waves of people being thrown out of their homes. We were going to not see entrepreneurship, and entrepreneurship has really exploded during the pandemic. All of those were because people were pulled away from the precipice and that relief was successful in that. Now the challenge was we didn't know how much was going to be enough. We didn't know what we were going to need to do. In my view, and I'll just say this in my view, I'd rather do too much than too little because too little then you have other problems, and those problems are worse I think in terms of just distress and desperation. That's kind of the space that we're in.

We don't give advice on how the Congress should spend money. Moving forward, I will say there are lots of needs that the country has and they're going to have to think about it. One thing I do say, for investments it's not the spending but it's the return on the investments that we have to be mindful of. I tell the policymakers all the time that sometimes you got to spend to get return. The conversation should be which things to spend on are going to get us the most return. Because if you do that well, then we will grow our way to where we can afford and support those things. That's the debate for them to have and I'm not going to talk about specifics.

González: That's a great question. I'll try to answer it in about a minute so we have some others. First, I would say there's not a lot of members of that community that are landowners, there's a few. The point that you bring up is exactly something that I think a lot about. Because a lot of those folks, when I talk about the level of business savviness or business sophistication, a lot of those folks know they're sitting on a gold mine but they're just waiting for that VC fund from Boston or LA that you were talking about. They're waiting for somebody to walk up one day and write them that big, big check and then go away. One of the opportunities that I see for those that own property is to bring the opportunity to them, for them to be invited to the table. See, these folks never have been invited to the table of development and prosperity. They got lucky because they bought a piece of land and they have it. How do we intentionally, those that care about this type of stuff, come to them, and say, "Hey, why don't you become part of this solution?" Whatever this project, this solution, might be. That might mean that it's not somebody writing you a $5 million check for your property. That might mean you put your property into the pot and then let's create something that has longer term but much more potential for prosperity. That resonates very much with us and what we're thinking about.

Bostic: Thanks, José.

John Ingram: Good morning. My name is John Ingram and I am chairman of a large family business here in Nashville. We're in the transportation business like Christy, but only in inland marine business, barging commodities up and down the river system. We share a lot of the same issues that you have there. We're also in the book business, book services business, both physically and digitally. We've got a lot of sense of what's happening in the digital world, particularly in tech and some other areas. We're also in sports as we brought major league soccer to Nashville. We get to see lots of things. My real question is for the Fed. I'm also a religious watcher of Bloomberg and CNBC in the morning, so I get to see some of you ...

Bostic: We're in trouble man.

Ingram: ... in a lot of conversations there. I find it kind of frustrating that the... and I know you're data reliant, but there also seems to be a sense of almost like driving down the road looking in the rear view mirror. I'm just wondering what we can and do you to be more predictive in the world of big data and the tech around that. What can we do to be more predictive prospectively, as opposed to waiting for things to come in, and then you're kind of too late? I think we're late right now in terms of a lot of what needs to happen. I don't envy the job and don't say I could do it better, but that to me seems to be the challenge and I'll be quiet and listen for the response.

Bostic: I think that's a fair question. We in Atlanta have been thinking about this very question for quite some time, and it's one reason why we don't just rely data. We have our Regional Economic Information Network colleagues that go around and talk to people in real time. We get immediate feedback on how you guys are all living, and that informs our policymaking. We've also at our Bank instituted a number of surveys that bring us information also on a much higher frequency basis so that we're getting that information on a regular basis. That does inform and I yell about all the things that I hear all the time, Chris can tell you and he can comment on whether it's effective or not, but we are trying to get that information and that's really, really important.

The other thing I did want to say on your last comment, this shift has been very fast, right? The last bout of very high inflation, it was actually a 15-year arc, right? This change happened in like three months, right? That kind of rapid transformation is not something that we've really seen in our economic history. You can add that to the list of things in the last two years, we've not seen in our economic history. This is really just a remarkably idiosyncratic time. We are trying as much as possible to calibrate our policy to be effective, given the information as we see it in that moment, recognizing that information a week later is going to be potentially very, very different. We're on it and we're paying attention. I think that's, that's the most important thing. That's one of the reasons why we do these sorts of things. We want to get this feedback. We talked earlier, and I said, make sure you've come up and tell us exactly what you think. I really do appreciate that.

Ingram: Thank you for being here.

Bostic: All right. We've got time for one more. You've got to be a quick one.

Trace Blankenship: Quick one. Trace Blankenship. I'm a partner in a national law firm that combined with my law firm last year. Quick question for Governor Waller, 30,000 foot view: As the times are unusual and getting more unusual, what are some of the immediate things in the Fed's toolbox that you all expect to deploy or could in order to have some ability to have an impact on these unusual economic times? And how do you calibrate those for, like Janet said, a Tier Two city versus the Tier One cities that we always talk about, and then potentially rural areas?

Waller: The tools that we use are the ones that everybody knows about, it's interest rates and our balance sheet. We raised rates at our last FMC meeting with signals that we would continue to raise rates to try to cool off demand in the economy. The tricky part's going to be can we do that without causing big problems on the real side in terms of employment, production, things like that. Like with housing, can we cool off demand with housing without tanking the construction industry? Can we cool down labor demand without causing employment to fall? That's the tricky road that we're on. Our main two tools are mainly our interest rate policies which we signal, and then our combination through balance sheet policy which will start scaling down the size of our balance sheet.

The critical thing to remember is we don't have a policy tool for every city. We do not have a policy rule for every segment of the population. We don't have one for every industry. We have one, it's called the interest rate, the Fed funds rate. That's really it. It's a very brute force kind of hammer that we use on the economy. Of course, when you have to use a brute force tool sometimes there's some collateral damage that happens. We're trying to do this in a way that there's not much of it, but we can't tailor policy. Fiscal policy, as Raphael was saying, is a tool for that. You can tailor tax codes, you can tailor spending, you can tailor all these things to different areas. That's what fiscal policy is for, but monetary policy is not very good at it.

Bostic: All right. Thank you, Governor Waller. It's good to have you here.

Waller: Thank you, President Bostic.

Bostic: We are at 10 o'clock and I think that's the time we told you we would be done. I want to thank you all for joining us today. This has been a really great conversation. Our panelists, those of you in the audience, have given me a lot of food for thought. I've got some notes down here and we will continue this conversation moving forward. For those of you online, I hope that you've enjoyed the conversation as well. Please do stay connected with us and join us for our next events as we continue to get information, listen to businesses and the communities, and craft policy that's appropriate. Thank you all and have a great day.