michelle w bowman : brief remarks - fed listens event on transitioning to the post - pandemic economy brief remarks by ms michelle w bowman, member of the board of governors of the federal reserve system, at the fed listens event on transitioning to the postpandemic economy, boston, massachusetts, 31 may 2023. * * * it is very good to be here, and to be part of this fed listens event and discussion about the effects of the pandemic experience on the u. s. economy, highlighting challenges in the labor and housing markets. while there are many ways to think about the impact of these effects, i find it helpful to consider both the cyclical or temporary factors and those that are structural and longer term. as monetary policymakers, we are primarily focused on the cyclical mattersmeaning how the pandemic and the measures taken to address it complicated accomplishing our dual - mandate objectives of maximum employment and stable prices. making the best monetary policy decisions over the business cycle requires distinguishing between temporary effects and lasting, structural changes. today's agenda includes the employment recovery following the high unemployment during the spring of 2020 leading to the current tight labor market. today's labor market strength reflects policy decisions taken in light of the pandemic experience, including the widespread lockdowns, reliance upon remote work, and other factors that may have structurally altered the labor market. i am very much looking forward to the discussion. i also look forward to learning from the perspectives of today's participants from around new england about the issues that will be discussed today. i find it especially helpful to participate in regional discussions to broaden my understanding of economic conditions throughout the country. this local perspective is one of the great advantages of the federal reserve system's regional structure, and of the fed listens initiative, which complements the board's efforts to understand national economic conditions. in 2019, the board launched fed listens with a year of listening sessions with the public focused on monetary policy and, specifically, on how the federal open market committee uses interest rates and other tools to promote a healthy economy. while data can tell us a lot, learning about the experiences behind those data helps bring economic data to life for me and for my colleagues. through fed listens and other engagements with the public, we hear about how americans are faring in the economy and about how our policy decisions affect individuals, businesses, and communities. so our efforts to enhance

means of expressing that will, would be for the congress to reinstitute a set of budget rules, possibly along the lines of the discretionary spending caps and the paygo rule originally included in the 1990 budget act ; these rules may assist in the process of making the difficult choices among competing budget priorities. however, although the paygo budget rule, for example, appeared to help keep legislation from increasing federal deficits for a number of years, paygo did not provide a mechanism to deal with the long - term budget imbalances already in place. thus, it is worth considering whether future budget rules should go beyond the scope of paygo and require more fundamental adjustments to spending and taxes. clearly, there are numerous ways in which budget policy could be adjusted to bring the budget back into balance in the short run and to maintain it over the long run. in any event, these difficult choices must ultimately be made. if left unchecked, persistent and widening federal government deficits will have an increasingly corrosive effect on the u. s. economy because, all else being equal, federal government borrowing takes up some of the funds that would otherwise go to finance capital accumulation or to purchase capital assets from abroad. a good deal of controversy has swirled around the question of whether increased federal borrowing reduces domestic investment, and presumably increases interest rates, or whether it increases u. s. borrowing from abroad. viewed from a broader perspective, however, that distinction is probably not very consequential because future national income is lower in either case. for the federal government to run a deficit in the short run as a temporary response to an emergency event, such as the recent devastating hurricanes, or a recession or a war is not the type of fiscal policy imbalance that tends to have a negative long - run effect on an economy. to the contrary, appropriate discretionary fiscal responses to these types of situations can have beneficial economic effects, as i suggested earlier in my remarks. however, it is imperative that the nation come to grips with the fiscal implications of the retirement of the baby - boom generation. creating a budget strategy and implementing policy changes to balance the federal government's budget over the long term will require hard choices, which will become more difficult the longer they are delayed. moreover, changes made to federal government spending programs and taxes to bring the budget toward balance should also be evaluated with regard to the economic effects on work and retirement behavior, private saving, and the distribution of income likely to result from