Facilitated by Dr. Ed Seifried

 

This year continues to challenge our community bank CEOs like never before. Jerome Powell, Federal Reserve Board Chairman, while describing the economic environment he is facing, complained that “If you look in the history books and try to find an economic environment as complex as the current one, you can’t. I think we are in a world of firsts.” He went on to list the reasons that a soft landing in the inflation battle may be difficult to obtain:  the COVID pandemic, the aftermath of the extreme fiscal and monetary policies used to combat the COVID recession, COVID related supply chain issue, and the Russia invasion of Ukraine.

If the Fed does not achieve a soft landing, it is very likely we will face the prospect of an economic downturn or recession within the next 1-3 years.  The major banking problem associated with recessions is, of course, loan quality issues.  Fortunately, many banking pundits incorrectly forecast heavy loan losses during the COVID recession. By and large, these problem loans never materialized.  What will happen this time?

Dr. Ed will report on just what all this means for community banking.  He will be watching the state of the economy constantly.  He will report on the likelihood of that potential recession, and if it does materialize, try to forecast the length and depth of it.

Finally, Dr. Ed will offer significant advice as to what staff earnings adjustment would be appropriate for 2023.