for release on delivery 1 : 30 p. m. edt april 17, 2018 community development in baltimore and a few observations on community reinvestment act modernization remarks by lael brainard member board of governors of the federal reserve system at the federal reserve bank of richmond baltimore community development gathering baltimore, maryland april 17, 2018 good afternoon everyone. i want to take a moment to thank you for giving us such great insights into all the important work that is taking place here in the neighborhoods of baltimore. 1 every few months, i try to get out to some of the areas of the country where our reserve banks are engaged with community members, community development institutions, businesses, banks, and schools in efforts to create more vibrant communities. i last had the pleasure of visiting baltimore with community development staff from the richmond federal reserve bank in 2015. each visit teaches me so much more about the complexity of the challenges you face, the creativity of the solutions you devise, and ultimately the determination you all demonstrate to lift up the lives of all community members in this city. collectively, as community development professionals, concerned residents, and community partners, i can see the considerable progress you are making in the neighborhoods of baltimore, although of course there is still plenty of work to be done. we, at the federal reserve board and the federal reserve bank of richmond, recognize the unique challenges baltimore faces, and we are committed to remaining focused on this city and to partnering where that can be helpful. baltimore and its residents deserve a more prosperous and equitable future. i am pleased that the federal reserve ’ s community development team has been supporting your work and helping to convene collaborative endeavors, such as the symposium on workforce transportation that occurred in february, and cross - state learning exchanges that connect community development leaders from maryland and the carolinas. i am grateful to amanda roberts and theresa stark of the federal reserve board for their assistance in preparing this text. the remarks represent my own views, which do not necessarily represent those of the federal reserve board. perhaps the work that best exemplifies our commitment to understanding the complex dynamics of this city is the federal reserve bank of richmond ’ s persistent poverty study. the goal of this research initiative is to further understand the barriers and incentives that individuals living in persistent poverty face in making economic decisions. this multiyear qualitative research project will interview households in the baltimore metro area to better understand how individuals have been able to overcome intergenerational poverty. i will be very interested

still, given the historically high levels of profits and cash flow, the current level of business fixed investment appears too modest. this cautious corporate behavior contributes to the mild and long - lasting recovery. however, as the economy continues to recover and the business outlook becomes brighter, an increasing number of firms are likely to start earmarking more cash flow for business fixed investment, the wellspring of their future profits, with their focus on maximizing corporate value. we will examine the robustness of business conditions, by using, for example, the results of the september tankan ( short - term economic survey of enterprises in japan ), which will be released in early october. 1 / 4 now turning to the household sector, the employment and income situations appear to be improving steadily after a prolonged period of difficulty, as a result of firms'efforts to reduce excesses in the workforce and personnel expenses. the number of employees has been increasing since last year. more recently, the number of full - time employees has begun to increase, while the rise in the number of part - time employees, who were more in demand when corporate restructuring was in full swing, has slowed. regular payments are steadily increasing and bonus payments for this summer have also increased. given such improvement in the employment and income situations, private consumption has been firm, and is on an upward trend, albeit with some fluctuations. although sales of automobiles and sales at department stores were slightly weak in july and august, this was mainly in reaction to the substantial increase in sales during the april - june quarter, and the upward trend in private consumption remains intact. of course, risk factors do exist and ought to be taken into account in assessing an economic outlook. we should pay attention to the protracted surge in crude oil prices and its possible effect on overseas economies, including that of the united states. crude oil prices, which have been rising for the past few years, marked a record high around the end of august. rises in crude oil prices entail the risk of deceleration of world economic growth as a result of declines in the real purchasing power of non - oil producing countries. so far, however, the world economy continues to expand at a robust pace and shows no sign of this risk materializing. there are several reasons for this. first, the recent rises in crude oil prices have not been caused by oil production capacity constraints. rather, they are to a large extent attributable to an expansion of demand mainly in emerging countries,