Dennis P. Lockhart, President and Chief Executive Officer of the Federal Reserve Bank of Atlanta, gave the annual Tanous Family Endowed Lecture on Thursday in Lohrfink Auditorium, assessing the current economic situation and discussing the Federal Reserve’s monetary policy.

Lockhart’s talk became the second lecture supported by the Tanous Family Endowed Lecture Fund, established by Peter Tanous (COL ’60) for Lauinger Library’s 40th anniversary in 2010. The inaugural Tanous Lecture was given by TV host Chris Matthews in October 2012.

Head librarian Artemis Kirk introduced the event, which was hosted by the Library Associates, and the speaker.

Lockhart, who is a member of the Federal Reserve’s chief monetary policy body and Federal Open Market Committee, currently is responsible for bank activities, including monetary policy, supervision, regulation, and payment services.

Lockhart opened by briefly discussing his connection to Georgetown: Lockhart taught at the School of Foreign Service’s graduate program from 2003 to 2007, and his daughter and son-in-law also attended the university.

He then transitioned to the primary focus of his lecture, which was the challenge of estimating full employment and its implications for monetary policy. He clarified the context for his remarks at the beginning of his talk.

“You’re hearing my personal views. I’m not speaking for the Federal Reserve,” he said.

Beginning with an assessment of current economic conditions, he remarked that, though economic growth had been slow for four years, the United States had entered 2014 with optimism, only to see weak economic indicators in the first few months. He attributed this problem to weather.

“My research staff estimates that real gross domestic product growth in the first quarter may have been reduced by three-quarters of a percentage point due to bad weather.”

These mixed economic indicators, Lockhart indicated, were not significant causes for concern, and he continued to hold out hope for growth in the second half.

“In my view, the economy’s fundamentals are stronger, and the headwinds that have buffeted the economy and restrained growth are weaker.”

Lockhart moved, then, to a discussion of the appropriateness of the current policy, pointing to recent tapering of the Fed’s quantitative easing program and continued low interest rates.

“The policy rate has been as low as it effectively can go for more than five years,” he said. “So, in spite of the phasing out of asset purchases, the intended overall position of policy, in Fed-speak, is ‘highly accommodating,’ and I think this is appropriate and needed.”

Identifying the timing of the increase in interest rates as the major concern for the public, Lockhart explained that the decision would be governed by the status of inflation and employment, and focused the rest of his talk on employment.

He pointed to the current unemployment rate of 6.6 percent as positive, but criticized it for overstating the health of the economy because of less participation in the labor force.

“Discouragement over job prospects rose during the Great Recession, causing many unemployed people to drop out of the labor force and others not to enter the labor force. People make a participation choice,” Lockhart said.

Summarizing his talk, Lockhart, while expressing belief in the resurgence of the economy, urged for a continuation of the current policy to ensure the economy’s future status.

“Even with the progress made today, a careful evaluation of the employment situation suggests to me that full employment is still a ways off, and continued monetary accommodation is necessary,” he said
Around 75 people attended the event, and those who attended were appreciative of the speaker’s clarity of thought and presentation.

“He speaks just like a central banker would, very measured in all his words; he has to be extremely careful that he doesn’t say something out of line, but central bankers have a very clear way of looking at the economy, very data-driven, and he gave a good outlook of what’s to come,” Christopher Stromeyer (SFS ’14) said.

The content of the lecture also proved applicable to material studied by college students.

“We’re going through money and banking right now in my Intermediate Economics class,” Freddy Rosas (COL ’15) said. “I enjoyed this lecture because I got so much out of it that I can use to understand what inflation and unemployment mean to the economy and Federal Reserve operations.”