JACKSON — Patrick K. Barron isn’t an odds maker or a betting man, but as first vice president and COO of the Federal Reserve Bank of Atlanta, he’ll wager that the American economy will recover from its prolonged slump.
In an exclusive interview with the Mississippi Business Journal, Barron expressed optimism regarding the performance of the economy, though he cautioned that a return to more prosperous times would not happen overnight.
“I have a positive feeling about the outlook for our economy,” said Barron, who was in Jackson recently to speak at a forum sponsored by the Mississippi Council on Economic Education. “We’re seeing economic growth and spending but consumers will still be challenged because of unemployment rates.
“Consumers are looking for job growth.”
As the second highest-ranking individual at the Atlanta Fed, Barron works closely with the President in developing financial policies. He also oversees the day-to-day operations of the Federal Reserve, including all operating and support functions for financial service activities in the Sixth District.
Barron described the Federal Reserve as a “three-legged stool,” with the most important duties related to the maintenance of monetary and credit conditions favorable to sound business activity in all fields — agriculture, industrial and commercial.
“Banking and the economy go hand-in-hand in guarding against inflation,” said the Miami native. “We don’t see inflation as a problem for near term. Everyone, from individuals to the banking industry to the federal government, has to live within their means.”
He added that the three components of the current monetary policy are the Fed’s liquidity programs, the near-zero interest policy and the asset purchase program.
“We’re trying to keep interest rates as low as possible — it’s unlikely that we will see the need to change that,” Barron said.
Barron forewarns that though the economy will improve over time, growth will be slow.
“When I look over the next five quarters into 2010, I don’t think we’ll see the robust growth that we’ve been accustomed but I do see encouraging signs when our savings rate moves from zero to four percent,” he said.