Special Briefing on Inflation and Recession Risks for States and Cities

As the outlook for inflation, interest rates, the possibility of a recession, are in flux, this Special Briefing looks at what it all meant for state and local finance. Jerome H. Powell, Chair of the Board of Governors of the Federal Reserve System, delivers brief welcoming remarks in appreciation of Paul A. Volcker (1927-2019), former Federal Reserve Chair and founding Chairman of the Volcker Alliance. 

This Special Briefing features a panel of experts, including Mark Zandi, chief economist, Moody’s Analytics; Matt Gress, budget director, Arizona; Natalie Cohen, founder, National Municipal Research; and Les Richmond, vice president and actuary, Build America Mutual Assurance. 

Notable Quotes: 

"Paul Volcker knew that in order to tame inflation and heal the economy, he had to stay the course,” Jerome H. Powell said. 

“He demonstrated resolve and integrity by refusing to be swayed by political expediency." “The most likely scenario for the U.S. economy over the next twelve to twenty-four months is for it to evolve into a self-sustaining economic expansion,” Mark Zandi said. He predicted inflation will fall close to the Fed’s target of about 2 percent by the end of 2023, from more than 8 percent in March. 

“In higher inflation environment, the stage is set for underperforming assets versus what actuaries expected,” Build America Mutual’s Richmond said. “When that happens unfunded liabilities grow, and budgetary requirements that are needed to pay for them will grow as well.”

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 Learn more about the Volcker Alliance at: volckeralliance.org 

Learn more about Penn IUR at: penniur.upenn.edu 

Connect with us @VolckerAlliance and @PennIUR on Twitter, Facebook and LinkedIn Special Briefing is published by the Volcker Alliance, as part of its Public Finance initiatives, and Penn IUR. 

The views expressed on this podcast are those of the panelists and do not necessarily reflect the position of the Volcker Alliance or Penn IUR.