The President of the Federal Reserve Bank of Richmond sees the economic expansion continuing at a moderate rate.
Jeffrey M. Lacker said the long-running nature of the economic expansion does not necessarily mean the expansion will end soon.
He also noted the expansion has been slow by historical standards. He spoke at the annual economic forecast from Lyons Companies and the University of Delaware, held at Clayton Hall on the UD Newark campus.
However, Lacker threw cold water on the possibility of a big expansion in the economy, citing slow growth in the number of people in the workforce, an aging population, and other factors. He also cited relatively weak business spending.
Lacker forecasts the gross domestic product running around two percent in 2017 and slowing a bit in subsequent years.
Lacker, in making the case for higher interest rates, citing the strength of the economy and prospects of higher inflation President Donald Trump has also called for higher infrastructure and military spending. Lacker did not directly mention the spending plans but took note of the uncertainties of policies of the new administration.
Lacker did not directly mention the spending plans but took note of the uncertainties of policies of the new administration. In a question and answer period, he said it was a “reasonable hypothesis” that new policies could spur the economy through improved productivity, he added that not paying for programs would result in higher interest rates to avoid on onset of high inflation.
Lacker does not serve on the Open Market Committee of the Federal Reserve Board, the group that sets interest rates. However, Fed governors participate in discussions on interest rates. Former University of Delaware President Patrick Harker now serves on the Open Market Committee.
His remarks on interest rates were quickly picked up by media members remained glued to their computers at the Lyons event.
Michael Farr, who spoke at the annual event for the 10th time in its 11-year history again focused on income inequality. Farr stressed that he was not advocating redistribution of income, but said those at the top are not able to move high incomes and investment gains into the economy at a fast rate.
He noted that incomes for the middle class have remained stagnant while those at top income levels have done much better. He noted that the current political climate.
Farr suggested that social unrest and the rise of Donald Trump and Sen. Bernie Sanders during the 2016 election cycle can be attributed to anger over seeing the top tier getting the bulk of income gains.
J.J. Johnson, a Washington, D.C. -based executive with Fidelity Investments said he was encouraged by the Trump administration’s emphasis on regulatory reforms, but added that layers of regulations that sometimes contradict one another hold back the economy.
Johnson used a photo of the Grand Canyon to illustrate the layers of regulation that have piled up by each presidential administration.
The hundreds of people in attendance at the event were upbeat on the economy.
Those responding to the smartphone poll were confident about their prospects for the economy with about 71 percent confident or very confident on the course of the economy, with an even split on whether conditions will speed up. The remainder sees conditions remaining steady or declining.
President Donald Trump got decent marks for his early performance among members of an older crowd at the forecast. A show of hands showed a more mixed response.
