"It's Important That We Are as Tuned In as Possible": A Conversation about Economic Information
Tom Heintjes: Hello, and welcome back to another episode of the Economy Matters podcast. I'm Tom Heintjes, managing editor of the Atlanta Fed's Economy Matters magazine, and today we're visited by Laurel Graefe, vice president and regional executive at the Atlanta Fed's Nashville Branch, and Reggie Chever, who is vice president and regional executive at our Atlanta office. They're both integral to our Regional Economic Information Network—or REIN, as we call it—and I wanted to get them on the podcast to talk about how the Atlanta Fed gathers economic information, and how they see their respective regional economies, which are quite distinct from each other. Thanks to both of you for being with us today—it's good to see you in person again.
Laurel Graefe: Great to be here.
Reggie Chever: It's great to be here as well.
Heintjes: Laurel and Reggie, can either of you jump in and tell me not only about how you gather information about the economy in your respective areas, but how you assess it?
The Atlanta Fed's Reggie Chever and Laurel Graefe. Photos by Ted Pio Roda
Graefe: Sure. The whole underlying premise of REIN is about gathering the sort of information that we wouldn't have access to otherwise—say, looking at national statistics, or through some of our survey work. Reggie and I, and our counterparts across the Sixth District, we spend a lot of our time out in the communities meeting one-on-one with—whether it's business executives, community leaders, folks who lead nonprofits or universities—people who have unique insight into what's really happening on the ground in the economy and, importantly, why. And so we reach out and really try to meet with a cross-section of leaders to gather that information, to help us form a more nuanced view of the economy.
Heintjes: Okay, that's how you gather information. But can you talk about why you gather it? What role does that information play in what the Atlanta Fed does?
Graefe: I'll go back a little bit. So, traditionally, for the central bank's first nearly 100 years in existence, we relied incredibly heavily on economic models and statistics to help drive our understanding of what was happening in the economy, and therefore help us think about what's happening in the future and how the Fed might be able to set monetary policy to support our dual mandate of price stability and strong employment. What really became clear to us during the financial crisis and the years following that was, there's a lot more nuanced, complex information about the economy that perhaps the national data isn't really capturing. So we have leaned heavily into this work of gathering on-the-ground stories that are not intended to push against what we see in the data, but really to add context and help us understand. We can see what's happening with wage data or with home prices, with sales at retail stores—we want to know why. How are business leaders or community leaders responding or planning around what they're seeing on the ground, and therefore how can that shape how we think about the economy in the future? And so this work that we do in REIN is really about bringing that nuance, and helping to connect all of our discussion to what's happening on the ground on Main Street.
Heintjes: You mentioned economic models and data analysis, and it's really interesting. But there must be times when what you hear anecdotally—from all of the meetings that you just mentioned—doesn't really square with the data, and they don't really align. How do you reconcile what people tell you if there's daylight from what the data tell us?
Chever: I'll just add in here, a lot of the information that we're hearing is really qualitative information, and some of it may align and some of it may not. One of the things we do is we come back as a peer group—and we have very robust debate to really dig into—"What is this particular piece of information explaining to us?"—whether that's around labor, supply chain, price, or cost. And we bring that information forward. So in some cases the data, from a quantitative standpoint, may support that. But in some cases, it may be leading indicators of what's to come.
Heintjes: We touched on the diversity of the regional economy, and the Sixth District is a very diverse economy—Florida is different from Tennessee, and Georgia is different from Mississippi, and so on. What makes your own regions unique, regionally? What would we observe about Atlanta and Nashville that we couldn't necessarily see in, say, Jacksonville and New Orleans?
Chever: That's a great question, Tom. One thing I will share is that what's really unique about our district: When I think about GDP compensation by industry, for the Sixth District we closely mirror the entire United States. And if I think about that from a global GDP comparison, as a standalone economy, our region alone would be in a tie at the fifth position for the largest economy overall. So I think that really just provides some very unique and fascinating insights that would really help—and it really does help us—as we begin to think about monetary policy. When I think specifically about Atlanta—and the state of Georgia—the region is very broad and diverse, when I think about it from a rural or urban perspective. Right now, Atlanta is being coined as "Fintech Alley." There's a lot of innovation that's currently happening in the payments space. In addition, the film and TV industry has really boomed. Atlanta's coined, again, as the "Hollywood of the South." And then from a transportation perspective, our airport is really considered one of the largest, busiest airports in the world. So that insight alone is just bringing forth a wealth of information that really provides a more robust picture as we think about monetary policy.
Graefe: And I'll just add on to that, looking at Nashville and Tennessee specifically, there certainly is, as you can imagine, a concentration in the music industry, and the healthcare industry—logistics, so we have a lot of visibility into that. But I almost want to reframe the question a little, Tom, if I may, and think about: why do we even care about the diversity of our districts? And Reggie, I think, described really well how the Sixth District can be a really important space for us to be learning not just about what's happening locally, but to be able to glean insights that are relevant as we understand the national economy. Something I remind myself—and my team talks often—about is, ultimately, we're advising on an economic perspective to help inform monetary policy, which is not a regional policy. There's not a different interest rate, say, in my neighborhood than in your neighborhood, or my community versus your state. It really is about understanding what is happening in our local footprints, and what's the context that we're learning in so that we can then bubble that up and gain a broader perspective about truly what's happening across the US economy and how the Fed can best use the tools at our disposal to support a strong, vibrant, resilient economy where more people are thriving.
Heintjes: That's a great point—thank you for making it. In your line of work, there are probably no two days that are exactly the same. But do you have what you could describe as a typical work day in your line of work?
Chever: Yes, absolutely. Certainly no two days are alike—and maybe just to go back to what Laurel mentioned a few moments ago: the headline for us is, we really want to have an economy that works for everyone. In doing so, myself—along with my peers, and their respective offices—we are engaged with various business and community leaders. I like to say it's "feet in the street." We want to, again, hear the perspectives of various business and community leaders, so what that may look like is a variety of one-on-one conversations that we're having where we're actually going to businesses to really understand their sentiments about what's happening within their respective industries. But we also want to be sure that this relationship is reciprocal, so we in turn also provide information to them from an anecdotal perspective, in terms of what we're hearing within our respective regions that may be applicable for them to know as well. The other thing I would just share is that while we're building relationships with various leaders, we're also focused on outreach and education. You would be amazed that not many people understand who we are, what we do, and why that matters. So we spend quite a bit of time in what I would say is maybe more "Fed 101"—really explaining to folks the mission and the value and the importance of the work that we do as the Federal Reserve.
Heintjes: I know that, as you mentioned, REIN talks to key business owners as well as more "man in the street" types. How do you strike a balance in that area—who to talk to in order to arrive at what is really an accurate snapshot of the economy?
Graefe: As we think about our work broadly, I mentioned earlier really wanting to bring a context that's relevant to the national economy. We really go out of our way to think about, "Who are the people, what are the voices, that could help us understand the true breadth of experience across the US economy?" We're very deliberate about not just speaking to large businesses or urban businesses, say, but to talking to service providers who are serving everyday communities, or maybe serving people whose experiences aren't captured in employment statistics. We balance out a cross-section of folks from different industries, different geographies, different parts of the economy, firm size—and we really keep an eye on who's owning or leading the business as well, and trying to bring in perspective so we're sure that the insights we're gleaning represent the full diversity of perspectives and experiences across the economy.
Heintjes: The Fed talks a lot about "Main Street policy making." Let me ask you: from where you sit, what does that mean in your mind? What is "Main Street policy making?"
Graefe: This is funny, because it still surprises me how I can go out in public…whether it's audiences when I'm giving a talk about the economy, or sometimes even contacts who I'm having these interviews with, [people] will talk about the Fed as if their understanding is that the Fed is trying to optimize interest rates, say, for the stock market or for certain types of businesses. Reggie mentioned this before. The focus is really on, "How do we have an economy where people are thriving?" And in order to do that, certainly it's important that we understand what's happening in the stock market and in large corporations, but it is no more important than understanding what's happening in our neighborhoods and in our schools and in businesses and organizations of all sizes and in all situations, because ultimately successful policy will touch all of those people across the country. I think it's important that we are as tuned in as possible to what their experiences really are.
Heintjes: Laurel, you've been regional executive in Nashville for several years now, and Reggie, you've been regional executive at the Atlanta office since earlier this year. How have you seen perceptions of the Fed change in the times you've been in your roles—especially you, Laurel, since you've been there longer? What are some of the biggest or most common misconceptions that you encounter?
Graefe: For me, I think one that comes up so often is this perception that the "Fed"—in all capital, booming letters—is some distant organization, some ivory tower that is somehow removed from the lives that people are living. If there was one thing that I could change about the public's understanding of the Fed in that context, it's a recognition that this is an organization that is made up of diverse people in the same way that we try to capture perspectives that cross the gamut in our business contacts. I look across this table at Reggie or think about my other colleagues at the Fed: we all bring really different perspectives to the table—and I think that's by design, because I think we recognize that having a conversation where you have people with different backgrounds from different communities with different orientations, and we try to come together and focus on solving a single challenge. Maybe it takes a little longer, and maybe you have to work through a little bit more complications with so many perspectives. But in my heart, I truly believe it ends up bringing us to a place, when it comes to understanding the economy and also thinking about policy, that I think does a better job of serving this country than if we were this singular entity that was really focused on groupthink in the same way that I sometimes get the sense the public thinks the Fed is.
Chever: I would just echo that. I think aside from just demystifying the Fed, in terms of who we are and what we do, it's also reiterating the importance of the community's voice and really understanding how their perspectives and their sentiments really weigh into monetary policy, and how it really does have an impact and make a difference.
Heintjes: Let me ask you, what are the overarching themes you both hear about your respective regional area economies? And have these themes changed over time? Laurel, for example, I know Nashville has seen very dramatic growth in recent years, and this affected the composition of jobs, obviously housing costs, and more. What are the themes you hear about Nashville's economy, and also the Atlanta-area economy?
Graefe: You touched on some of the big ones. The conversations today are around workforce: Are people available, and do they have the right skills to take on the roles that are available? And then from the other perspective: Are the jobs of today paying enough and supporting people to live the lives that make sense for themselves and their families? There's a lot of discussion right now in the Nashville community—and I would say in Tennessee more broadly—and I hear from my colleagues, this is a challenge we're thinking about in many places across the country around housing and housing affordability. Certainly the pandemic experience, and an increase in the ability for people to work remotely, has really shifted some of the geography of where people in this country are living, and some of how we're experiencing that in our district in the Southeast is a very strong net in migration of new residents—which certainly brings new opportunities, new skills, fresh perspectives but is also certainly placing a strain on housing affordability, infrastructure, and some of those other things.
Chever: When I think about this from an Atlanta perspective, and maybe more at an aggregate level, supply chain imbalances continue to be a top theme. I think folks are really concerned about the ability to get the products and supplies needed to run their businesses. Also, the inflation aspect is certainly top of mind as well. We're really focused on the things that we can do within our span of control to get inflation back in line. It's important for us that the dollar goes as far as it possibly can for our citizens. The other thing I would say from a demand perspective is that demand overall continues to be relatively strong. We're starting to see some signals of pullback occur in certain segments, but some of that is to be expected considering 2021, as well as the earlier part of this year, were considered to be banner years in terms of consumer spending.
Heintjes: As you undertake your work even after all this time, are there still some things that surprise you or that come out of the blue at you in your jobs?
Graefe: Absolutely, all the time. You asked earlier about a day in the life, and I think sometimes I tell my friends and family about my work and it's easy to think of the exciting: I put a suit on and go to a high-rise and meet with a CEO, and that's a part of the work. In that same day, it is not unusual for me to put on my muck boots and go traipsing around a muddy cornfield with a contact not too far away from the city. To me, I continue to be surprised by the generosity of our contacts, and just sharing their time and sharing their knowledge with us—even though in exchange we can't compensate anybody. We can't share any kind of confidential, "inside" Fed knowledge. But what we can offer is an opportunity for folks to provide a voice and a perspective. That influence is something that I suspect they and their community care about. It still really surprises me, sometimes, how I can send a cold email or a cold call to somebody who is one of the busiest people in my entire state, and their willingness to take my call or walk me around their plant or their field or whatever it might be and really be generous and open about talking not just about the PR talking points for their organization, but really, what are they worried about? What do they regret? What do they wish they had done that they didn't? What are they concerned might be coming down the pipeline? Sometimes, our message is that it really needs to be kept confidential, and people having that level of trust in us is still—maybe it shouldn't surprise me, but sometimes it really does still strike me how someone can show that much faith and generosity.
Heintjes: That's something you would never take for granted, for sure.
Heintjes: Reggie, what still surprises you?
Chever: So, "plus one" to everything Laurel mentioned. I think really it is the candor. I think folks' willingness to be vulnerable and share some of those things that may be confidential in nature but recognize that there is value in our understanding those insights and sentiments as we think about monetary policy.
Heintjes: It's interesting—I imagine it takes time and patience to gain people's confidence like that, does it not? To really win people over, and show them that they can trust you and that you will keep things in confidence?
Graefe: Absolutely. It certainly takes a bit of creativity and "go with the flow" on our part to help build those relationships and gain trust. And maybe that is part of what Reggie and I both experience is, you walk in the door and you really sometimes don't know what the folks you are meeting are expecting or experiencing. Sometimes what folks need for you to gain trust is to hear about your background or your bio or learn about the Fed. But a lot more often it's about us showing that we genuinely care and taking the time to really listen and understand them and what's bothering them. And that could be a one-person business, and what's on that business leader's mind, or it could be one of the Fortune 100 companies that's headquartered in our district. Again, it's something that keeps this job interesting. There are no two days that are the same, as you mentioned earlier, and it keeps us on our toes, certainly.
Chever: For sure, I would definitely echo that. It really is being adaptive, because you really don't know sometimes what you may be walking into. But it really is about establishing trust. I know particularly for me coming in, new into the role, establishing rapport and really explaining what's in it for them, it's really important that we create this reciprocal relationship where they understand and see the value that this connection has for them.
Heintjes: It's obvious that you both really enjoy your work and find it satisfying. But, let's face it—every job has frustrations. If you could wave a magic wand and change some aspect of your job that you find frustrating or difficult, what would that be? What is your pain point, as they might say in "org speak"?
Graefe: Could we get rid of traffic jams? [laughter]
Heintjes: That's also a problem in Nashville, is it?
Chever: I think that problem exists in Atlanta as well. Traffic is certainly one of the things I wish I could wave a magic wand and erase. But I think that there's value even in the traffic, right? Because you're able to pass through various neighborhoods and cities and see things from a different perspective in terms of what they may be dealing with.
Heintjes: That's to your credit, Reggie, that you can find a silver lining in Atlanta traffic.
Chever: Right? [laughter]
Graefe: I think one thing, in being a bit more serious than about traffic—although I'm not lying about that [laughter], I would like some of that time back. If I could wave a magic wand, I think something that comes up for me again and again is just the confusion about the Federal Reserve, and I think oftentimes just a lack of understanding about the difference between, say, monetary and fiscal policy, or what is the role in the Fed that might impact someone who's really busy and has a lot on their plate? And how can we help folks feel like stakeholders who really understand an organization and work that truly is just very complex and technical, and helping the public feel like engaged stakeholders in that would be one of my greatest wishes, as I think about this work.
Heintjes: I'm going to close with an opportunity for some civic boosterism for you both, and I'm going to ask you: What is the thing that you love or value most about your respective cities? And Laurel, I'm going to take country music off the table for you. It's just too easy.
Graefe: Gosh, it is…this could go on for too long. I—
Heintjes: And I should note, you're not from Nashville, by the way.
Graefe: I'm not from Nashville, but I'm not from far from Tennessee, at least. Honestly, I'm going to once again expand upon the question a little bit and take some liberties to say one of my favorite things about Nashville is just the diversity of Tennessee and how quickly I can get from a fabulous restaurant to a table with really brilliant minds. We have a huge concentration of higher ed institutions in Nashville, the really strong arts community—so there's just such a rich culture to engage in personally. I feel like I'm always learning, I'm always trying to keep up with some of the really cool ways the community is evolving. But we're also so close to—within an hour or two—really incredible outdoor, rural communities. I'm a bit of an outdoor junkie, and so it's not unusual to find me out hopping around a creek or hiking around the Cumberland Plateau or other areas in Tennessee to help get some balance. So I really try to do my very best to take in all the community has to offer.
Chever: I would just add, I think one of the things that I really enjoy about the Atlanta area—and really just the state of Georgia—is that there are very many green spaces to really engage in and enjoy and explore. I'm really an explorer—I love venturing out. The other thing I would say is probably around restaurants. I think Atlanta is just a hidden gem of a variety of neighborhood restaurants that you can really enjoy. The other thing I would say is probably around maybe the community engagement opportunities involved in a lot of nonprofit work, particularly around youth and public safety. I think the city really allows a lot of opportunity for you to get really engaged and help shape the minds of the future.
Heintjes: That's great. Well, this has been a really great conversation, and I really so enjoyed sitting down with both of you today. I want to thank you for your time in being here today.
Graefe: Thanks, Tom.
Chever: Thank you.
Heintjes: And I should note that as we record this episode in mid-September, the University of Georgia has not yet played Tennessee. They'll play in November, and in the name of civility I will avoid asking you to make a prediction on that game. [laughter] And that brings us to the end of another episode of the Economy Matters podcast. Again, I'm Tom Heintjes, managing editor of the Atlanta Fed's Economy Matters magazine, and as always, I appreciate you spending some time with us today. On the Atlanta Fed's website at atlantafed.org, you'll be able to read about the regional economies we've been discussing, and you can learn more about the REIN team's efforts to further our understanding of the complex tapestry that is the southeastern economy. I also encourage you to follow us on social media as well, so you can get updates on new information. Thanks again for listening, and let's meet again next month.