Regional Influences on Monetary Policy

SF Fed Branch Managers Robin Rockwood, Steve Walker, and Roger Replogle talk with President John Williams about ensuring the diverse industries and geographies within our District have a voice (video, 4:35).

In our 2015 annual report, What We've Learned…and why it matters, we explain how voices from regional economies influence monetary policy decisions in Washington D.C. We describe how we network with business and community leaders and share an example of how monetary policy stimulus has encouraged business investment.


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John Williams:

Why do we [the San Francisco Fed] have Branches and what do Branch Managers do?

Robin Rockwood:

We have Branches because it's important for all of us at the Federal Reserve to understand what is happening in the micro-economies from all of the states and the regions that we serve. I interact and meet with a lot of the community and business leaders, and from there I'm able to make connections to use that network to understand more about what's going on in the local community. I often travel to Idaho and meet with business and community leaders in the Boise area, and in southern Idaho, Twin Falls, Idaho Falls, and so forth.

John Williams:

How do we make sure that from our directors and our other advisory boards, we're getting the whole view of the District and all the diversity of the industries and diversity in our society? How do we make sure that we get all those voices to the Fed?

Steve Walker:

Having all those voices is so critical and key for us, and we try to get all the industries that are key to our District so that we can have that type of voice. We also are there for our communities, because we need to be that ear to the ground type of being able to glean information economically, what's going on locally. We have to do that through various ways. One of them is through our boards of directors and some are through just meetings with business leaders and community leaders, small businesses, large businesses. We want to hear that information.

John Williams:

Can you give me an example of what you've learned that you think has been valuable for us to understand what's happening in our District?

Steve Walker:

Oregon—a lot of people think about it as a timber state, and it is. Timber and lumber are very important to us. One representative on our board represents a large timber company and lumber company. He has told us that times have been pretty tough in 2015. Lumber prices have fallen 17 percent. At the same time, he shared some good things in the fact that because long-term interest rates have been low, they've been able to invest in long-term capital projects in their sawmills (and expand there); and also have been able to acquire a lot of timber lands to help their company.

John Williams:

What do you do as a Branch Manager in LA?

Roger Replogle:

My responsibilities really are two-fold. One is keeping the Branch a vibrant place to work for our employees. The second piece is going out into the public and bringing directors in to us that give us the kind of data that's forward-looking; and being able to provide that information to you and your economists in San Francisco so you can use that in formulating your decisions on monetary policy. Our zone is very, very big. We go from the entire state of Arizona; Clark County, Nevada; the southern half of California. I always also try to make sure that when I recruit directors, I'm looking at the various regions. I always try to have somebody that can talk for Arizona, that can talk for the San Diego market, can talk for the inland regional area of Los Angeles. Those are all major markets that I feel really have to have a voice.

John Williams:

Do you think that the general public, or people out there, understand that we're actually talking to members of the community in a regular way like this? Is this one of these hidden secrets of the Fed?

Roger Replogle:

It's sadly, I think, a hidden secret. I'll go back to a conversation I had on an airplane a couple of years ago. I sat down and the gentleman next to me asked, "Who do you work for?" I mentioned I work for the Federal Reserve Bank of San Francisco and he said, "This is going to be an interesting flight." I will tell you, from the tone of his first remark, I could tell he had a lot of real hard questions about, were we doing the right thing, were we approaching this correctly. After two and a half hours of discussion about how we go about interacting with our directors, how we look to get feedback from not only Fortune 100 companies that serve on our board, but we have community. We have labor. We have small business representation. We don't just have the large banks. We have a lot of community banks.

I think him understanding that we're really looking at grassroots information, looking forward instead of the post-perspective data that happened three months, six months, a year ago, gave him a lot more confidence that, "I didn't realize the Fed did it this way. I thought you were kind of data-wonks and you looked at the numbers and it's all data dependent is kind of the mantra." It is, but it's also what is happening that we haven't seen. I think after that conversation he said, "I am so happy that I asked you who you work for, because I have a different perspective about how the Fed goes about setting monetary policy."


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