The new president of the Federal Reserve Bank of New York took a whirlwind tour of the Buffalo area this week, and he noticed the change.
"What strikes me is just how much change is happening in this city and this region," John C. Williams said during a question-and-answer session with Paul Tesluk, dean of the University at Buffalo's School of Management. "You see this in terms of the medical center, new hotels, new development around the city."
What Williams saw and heard contributes to his perspective on the economy. As a member of the Federal Open Market Committee, he's part of a group that decides whether to raise, lower or hold the line on interest rates charged to banks. Trips like the one he made to Western New York on Wednesday and Thursday help him understand the economy in his new territory, which is principally New York State. His agenda included stops in Niagara Falls and Buffalo, including the new Northland Workforce Training Center.
Before taking over as the president of the New York Fed in June, Williams served for seven years as president of the Federal Reserve Bank of San Francisco.
Williams offered an upbeat view of the national economy, citing the Federal Reserve's dual mandate of maximum employment and price stability.
"In terms of those overall goals in the national scene, this is about as good as it gets," said Williams, 56, who is from Sacramento, Calif. "The inflation today is running at 2 percent. That's the target that we've set, that we want average inflation to be low and stable around 2 percent. And that's where we are."
As for Western New York, "I think you're seeing very much the same overall story, in terms of, job growth has been good, economic growth has been solid," Williams said. "Unemployment has come down. It's a little higher than the national average, but still quite low compared to the last decade or so."
Williams offered his views on other economic issues:
• Regional differences: "There is no one economy," he said. "There are thousands of economies, and they're all unique in their own ways. What's interesting here is this challenge of taking a city that has a very strong manufacturing past and thinking, how do you really leverage some of that, but also build on what are going to be the long-term growth drivers here" such as education, health care and technology.
• Why wages haven't grown more: "My takeaway from this is, the fact that wages haven't grown a lot faster is a sign this economy still has room to run, and that we can allow and foster conditions that we'll see, at least for the next few years, very strong growth and economic expansion, consistent with our maximum employment mandate."
• Americans' spending habits since the Great Recession: "Even though the house prices have increased dramatically, nobody's going out there and buying a boat. They're actually basically socking away those gains and being more cautious around that. And I think we see this in the business community, too."
• How the Great Recession changed banking regulation: "One of the major lessons from the financial crisis which we and Congress took to heart us was, we needed to make sure that the banks and important financial institutions had enough capital and liquidity, basically enough reserves, enough cushion, to protect them in case of another economic downturn."