Community development financial institutions (CDFIs) are financial institutions with a mission to serve low- and moderate-income (LMI) individuals and communities. They can be depository institutions (including banks and credit unions) and nondepository institutions (including loan funds, venture capital funds, and community development corporations). Provided they meet established criteria, the Department of the Treasury’s CDFI Fund may certify CDFIs in order for them to receive capital support.

From March 22 through May 14, 2021, the Federal Reserve fielded the 2021 CDFI Survey. The effort gathered information from 345 CDFIs on their financial well-being throughout the COVID-19 pandemic, operational gaps and challenges, and effects on clients and communities they serve. Survey results and key findings are organized into the following sections.

The Commercial Real Estate Momentum Index (CREMI) provides easy access to various metrics for individual markets by sector and facilitates comparisons of conditions across markets. The index tracks movements in specific metrics (such as occupancy/vacancy rate, rent growth, and the construction pipeline) and provides a targeted view of real estate conditions in the industrial, multifamily, office, and retail sectors. Additional metrics, including employment and population growth, provide information specific to each sector as appropriate. CREMI derives a momentum index value for each sector within a market and gives an overall momentum index value for the entire market. Upward and downward momentum correspond with aggregated trends in the market metrics, not necessarily indicating "good" or "bad."

The end of LIBOR as a benchmark for new lending is less than five months away. Although progress has been made, substantial work remains for some firms to complete the transition to an alternative benchmark by December 31, 2021. The transition requires immediate action. Failure to adequately prepare is a threat to overall financial stability and exposes individual firms to safety and soundness risks. It is imperative that firms cease offering LIBOR products and select an alternative reference rate as soon as possible. Institutions should also adopt fallback language for contracts that mature after the cessation of LIBOR. While market participants are not required to select the Secured Overnight Funding Rate (SOFR) to replace LIBOR, the Alternative Reference Rate Committee (ARRC)—which was convened by the Federal Reserve and includes representatives from financial regulatory agencies as well as market participants—recommends selecting SOFR, which has a much deeper, more liquid...

The growth rate of real gross domestic product (GDP) is a key indicator of economic activity, but the official estimate is released with a delay. Our GDPNow forecasting model provides a "nowcast" of the official estimate prior to its release by estimating GDP growth using a methodology similar to the one used by the U.S. Bureau of Economic Analysis.

GDPNow is not an official forecast of the Atlanta Fed. Rather, it is best viewed as a running estimate of real GDP growth based on available economic data for the current measured quarter. There are no subjective adjustments made to GDPNow—the estimate is based solely on the mathematical results of the model. In particular, it does not capture the impact of COVID-19 and social mobility beyond their impact on GDP source data and relevant economic reports that have already been released. It does not anticipate their impact on forthcoming economic reports beyond the standard internal...

Some working families experience financial barriers to economic mobility. One significant barrier occurs when career advancement puts a family above the income eligibility threshold for public assistance programs. Due to the loss of these programs, career advancement opportunities can result in the family being financially worse off (a benefits cliff) or no better off (a benefits plateau) than before the wage increase.

This loss of means-tested public assistance is an effective marginal tax rate on income gains. High effective marginal tax rates mean that some workers have a financial disincentive to invest in their own human capital and advance from lower-wage work to jobs that lead to economic self-sufficiency.

The chart below demonstrates an example of benefits cliffs for a hypothetical single mother with two children who lives in Miami, Florida. As employment income increases (left to right on the horizontal axis), benefits phase out then disappear...

August 17, 2021

A familiar message cemented itself even more deeply in the latest round of Federal Reserve Bank of Atlanta conversations with business executives across the Southeast—problems with the "S word": supply.

From retailers to home builders, firms continue to face difficulties and delays in securing parts and materials because of well-documented supply chain disruptions domestically and abroad brought on by the coronavirus pandemic. Businesses also are struggling with a dearth of another vital ingredient—people. Interviews and data show that employers have far more job openings than candidates willing to fill them.

That observation is among the findings from the latest round of grassroots economic intelligence gathered by the Federal Reserve Bank of Atlanta's Regional Economic Information Network (REIN) staff. REIN executives continually canvass business decision makers across industries and firm sizes in the Southeast. The information...

The growth rate of real gross domestic product (GDP) is a key indicator of economic activity, but the official estimate is released with a delay. Our GDPNow forecasting model provides a "nowcast" of the official estimate prior to its release by estimating GDP growth using a methodology similar to the one used by the U.S. Bureau of Economic Analysis.

GDPNow is not an official forecast of the Atlanta Fed. Rather, it is best viewed as a running estimate of real GDP growth based on available economic data for the current measured quarter. There are no subjective adjustments made to GDPNow—the estimate is based solely on the mathematical results of the model. In particular, it does not capture the impact of COVID-19 and social mobility beyond their impact on GDP source data and relevant economic reports that have already been released. It does not anticipate their impact on forthcoming economic reports beyond the standard internal...

Inflation expectations: Firms' year-ahead inflation expectations increased significantly to 3.0 percent, on average. Current economic environment: Sales levels "compared to normal" remain unchanged. However, profit margins decreased slightly. Year-over-year unit cost growth increased significantly to 3.3 percent, on average. Quarterly question: Approximately one-third of firms expect both labor costs and nonlabor costs to put significant upward influence on prices. About 24 percent of firms expect sales levels to put moderate upward influence on prices over the next 12 months, down from 38 percent previously. Special question: Firms were asked to describe how COVID-19 has disrupted their supply chains and business operations. They then indicated the severity and expected length of both types of disruption. Additionally, firms provided their level of concern over the COVID-19 Delta variant and when they expect business operations to return to "normal." A breakdown of the results...

Data from the Current Population Survey tell us that, in the second quarter of 2019, 47.8 percent of those aged 55 and older said they didn't want a job because they were retired. By the second quarter of 2021, that share had risen more than 2 percentage points, to 49.9 percent, which is an increase of around 2 million retirees over what would have been expected if the retirement rate for those aged 55 and older had not changed.

These data raise the question of how much of the increase in retirements is over and above what would have been expected based on the ongoing aging of the baby boomer generation—the movement of more people into ages that are more likely to retire. In other words, did the COVID-19 pandemic contribute to an increase in retirements?

The Atlanta Fed's Labor Force Participation Dynamics tool, which we recently updated with data through the second quarter of 2021, allows us to investigate the source of the change in retirement. The...

The data we use to compute the Atlanta Fed's Wage Growth Tracker are from the monthly Current Population Survey (CPS), administered by the U.S. Census Bureau for the Bureau of Labor Statistics. (You can find an overview of the CPS on the Census website.) The survey features a rotating panel of households. Surveyed households are in the CPS sample four consecutive months, not interviewed for next eight months, and then in the survey again four consecutive months. Each month, one-eighth of the households are in the sample for the first time, one-eighth for the second time, and so forth. Respondents answer questions about the wage and salary earnings of household members in the fourth and the last month they are surveyed. We use the information in these two interviews, spaced 12 months apart, to compute our wage growth statistic.

Raphael Bostic President and Chief Executive Officer Federal Reserve Bank of Atlanta

Chautauqua Institution

August 11, 2021

Watch the speech live

Thank you for the kind introduction. I'd like to thank the Chautauqua Institution for inviting me to this beautiful, stimulating setting alongside an impressive roster of speakers.

My husband and I got a chance to spend a few days here last weekend to relax a bit and it was delightful. We are birders, so we especially enjoyed our tour of the Roger Tory Peterson Institute. I must say, when I think of taking a working "vacation," this is pretty close to an ideal situation. I will add: kudos to Chautauqua for focusing attention on the work of making the economy better serve marginalized communities and individuals. This is an important, timely topic.

I would argue that in the interest of the nation's long-term prosperity and general well-being, perhaps no single issue is more critical than...

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