President Jeff Lacker

Photo of President Jeffrey M. Lacker

Dec. 22, 2005

The Economic Outlook

It is a pleasure to be with you today to discuss the economic outlook for 2006 and beyond. It is a pleasure, in part, because the economic outlook is fairly encouraging. Growth is on a solid footing, despite this years run-up in energy prices and the disruptions of a devastating hurricane season. After a brief pause this fall, employment has resumed expanding at a healthy pace, consumer spending continues to grow briskly, and business investment spending is robust. Granted, housing activity seems to be softening, and at least some potential price level pressures remain, so it may be too soon to break out the eggnog. But inflation expectations remain contained, and we at the Fed are well-positioned to resist inflation pressures, should they emerge. So all in all, it is quite a good outlook. In fact, in the spirit of the holiday season, I am tempted to say that I bring you tidings of comfort and joy, but I am afraid that might strike you as uncharacteristically exuberant for a central banker, so let me just say that tidings appear to be improving at a measured pace.

Photo of President Jeffrey M. Lacker

Dec. 21, 2005

The Economic Outlook

It is a pleasure to be with you today to discuss the economic outlook for 2006 and beyond. It is a pleasure, in part, because the economic outlook is fairly encouraging. Growth is on a solid footing, despite this year’s run-up in energy prices and the disruptions of a devastating hurricane season. After a brief pause this fall, employment has resumed expanding at a healthy pace, consumer spending continues to grow briskly, and business investment spending is robust. Granted, housing activity seems to be softening, and at least some potential price level pressures remain, so it may be too soon to break out the eggnog. But inflation expectations remain contained, and we at the Fed are well-positioned to resist inflation pressures, should they emerge. So all in all, it is quite a good outlook. In fact, in the spirit of the holiday season, I am tempted to say that I bring you tidings of comfort and joy, but I am afraid that might strike you as uncharacteristically exuberant for a central banker, so let me just say that tidings appear to be improving at a measured pace.

Photo of President Jeffrey M. Lacker

Oct. 20, 2005

Interest Rate Policy After Greenspan

Early next year, we will experience an event that happens rarely in the Federal Reserve — the retirement of the Chairman of the Board of Governors. Alan Greenspan is just the fifth Fed Chairman in the modern era that began with the Treasury-Fed Accord in 1951, and his retirement provides us with an excellent opportunity both to look back at a period of extraordinary success in monetary policy-making and to look forward to the principles that might allow future policy to continue this success. I plan to do some of both today, but I may spend as much time looking back as looking forward, not because I’m particularly nostalgic for the 1990s, but because I think it’s important for us to understand the nature of our policy successes in order to draw the right lessons to guide our future thinking about policy. As always, the views expressed are my own, and do not necessarily represent the views of my colleagues in the Federal Reserve System.

Photo of President Jeffrey M. Lacker

June 20, 2005

Retail Financial Innovation

Over the last two decades, we have witnessed what can arguably be called a revolution in retail consumer finance. Perhaps the hallmark of this revolution has been the dramatic expansion of unsecured lending through the proliferation of credit cards. This growth has not been limited to unsecured credit, but also includes mortgage and home equity lending. One of my themes this morning will be that these trends are the result of a wave of innovation, largely related to information technology, that has brought widespread change to financial services and other industries. At the same time, as retail credit extension has grown we have also seen a significant expansion of regulations pertaining to the extension of such credit, and a growing concern in some quarters that American households have lost control of their finances to a dizzying array of new products and options. My second theme concerns the relationship between these two broad developments. I will argue that there is a natural tendency for credit expansions like the one we've seen to lead to calls for new regulation. My hope is that understanding this relationship will better equip us to assess current conditions in retail credit markets, including legislative and regulatory proposals, and to think clearly about the industry's future direction.

Photo of President Jeffrey M. Lacker

June 14, 2005

Retail Financial Innovation

Over the last two decades, we have witnessed what can arguably be called a revolution in retail consumer finance. Perhaps the hallmark of this revolution has been the dramatic expansion of unsecured lending through the proliferation of credit cards. This growth has not been limited to unsecured credit, but also includes mortgage and home equity lending. One of my themes this morning will be that these trends are the result of a wave of innovation, largely related to information technology, that has brought widespread change to financial services and other industries. At the same time, as retail credit extension has grown we have also seen a significant expansion of regulations pertaining to the extension of such credit, and a growing concern in some quarters that American households have lost control of their finances to a dizzying array of new products and options. My second theme concerns the relationship between these two broad developments. I will argue that there is a natural tendency for credit expansions like the one we've seen to lead to calls for new regulation. My hope is that understanding this relationship will better equip us to assess current conditions in retail credit markets, including legislative and regulatory proposals, and to think clearly about the industry's future direction.

Photo of President Jeffrey M. Lacker

May 20, 2005

Payment Economics and the Role of the Central Banks

I would like to start by commending the organizers of this conference for their goal of “making payments mainstream.” If I could do a bit of wordsmithing, I would add the word “economics” after the word “payment,” because a distinct and coherent field of payment economics appears to be emerging, and it deserves some attention, especially among central bank policymakers (Lacker and Weinberg, 2003). In my remarks today, I will say a few words about payment economics, and then discuss the role of the Central Bank in the payment system and implications of that role for several current issues. As always, the views expressed do not necessarily represent the views of my colleagues in the Federal Reserve System.

Photo of President Jeffrey M. Lacker

April 7, 2005

Community Affairs Research Conference - Opening Remarks

On behalf of the Federal Reserve System, it is my pleasure to welcome you to the fourth Community Affairs Research Conference. I believe this year’s conference has brought together a set of papers and participants that will make interesting and useful contributions to our knowledge on matters of consumer finance and community development. These are areas in which innovations in lending practices and supporting information technologies have led to a substantial expansion of credit to U.S. households. I think its fair to say that these markets are in a state of flux, making it particularly difficult to assess the costs and benefits of private sector practices and public policies. Against this backdrop, research like that represented at this conference is all the more valuable.

Photo of President Jeffrey M. Lacker

March 1, 2005

Inflation Targeting and the Conduct of Monetary Policy

I am pleased to be here with you today to talk about inflation targeting and the conduct of monetary policy. I would like to thank Dr. Coughlan, Dean Newman and the University of Richmond for giving me an opportunity at this time to express my views on this important subject. The timing is right for two reasons. It has been just a little more than half a year since I became president of the Federal Reserve Bank of Richmond. As bank president, I participate regularly in the Federal Open Market Committee, the body that makes monetary policy in the United States. And I welcome this as an opportunity to make the first comprehensive presentation of my views on the conduct of monetary policy. As I will explain in detail, I believe that the adoption and announcement of an explicit, numerical, long-run inflation target by the Fed would enhance the effectiveness of monetary policy.

Photo of President Jeffrey M. Lacker

Jan. 18, 2005

Technology and Labor Markets

Labor market developments receive a considerable amount of media coverage. Over the last two years there have been countless stories about the “jobless recovery.” Employment growth following the 2001 recession has been slow compared to previous business cycles, slower in fact than any other recovery since WWII. In fact, only in 2004 did the economy get to something we might consider a normal pace of employment growth for a period of expansion. Many observers see technology as the culprit in sluggish employment growth. By raising productivity, we are told, technology weakens the demand for labor, and allows firms to meet growing demand without adding workers. In the last year or so, there also have been widespread stories about the growing number of jobs lost to imports or outsourcing. Of course, this movement of jobs overseas has been facilitated by technological advances in communication and information processing, so there is a sense in which one can describe these jobs as being lost to technology as well.

Photo of President Jeffrey M. Lacker

Jan. 3, 2005

The Economic Outlook

I am delighted to be here today to discuss the economic outlook for 2005 and beyond. But before I do, it would be helpful to review briefly the course of economic activity over the past year or so. The usual disclaimer applies, however: the views expressed are my own, and are not necessarily those of others in the Federal Reserve System.

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