Rosengren ’79 delivers economic policy talk

On February 16, President and Chief Executive Officer of the Federal Reserve Bank of Boston and soon-to-be chair of the College’s Board of Trustees Eric Rosengren ’79 P’12 spoke to the College community about domestic monetary policy. The talk, titled “Prospects for Returning to More Conventional Monetary Policy,” drew a large crowd to Ostrove Auditorium.
After being introduced by Provost and Dean of Faculty Lori Kletzer, Rosengren took the stage and noted how great it was to be back on the Hill, where he said he was able to “be in a classroom and spend time with faculty” throughout the day.
Throughout his talk, Rosengren highlighted several recent events as being pivotal to the world’s current economic climate, including the .25% rise  of the federal funds rate, the slowdown among trading partners, and the improvement in labor markets and the unemployment rate (which currently sits at 4.9 percent).
Rosengren touched on what he described as a “weird dichotomy” in which labor markets are actually strong, and the unemployment rate, “by historical standards, is actually pretty good, but there are people still talking about recession and other concerns.” This dichotomy can potentially lead to confusion when trying to create economic policy, but Rosengren noted that the current conditions mean that “there is room to be fully patient.” He continued to say, “we should be unhurried given current circumstances, and a more gradual monetary policy path is appropriate with the appreciation of the dollar and [anticipated GDP].”
As Rosengren has noted, both explicitly in an interview with the Echo and implicitly throughout his career, he is a strong believer in data-dependence. Throughout the talk, Rosengren projected figures on the global stock market, core inflation rates, and various price indexes.
To relate the most recent attributes of the economy back to Colby students, Rosengren recalled, when he spoke at the College in 2009 “it was a much dimmer audience than I expect to see today,” and “prospects for students in this room are much different” than they were in 2009.
The day following his speech, Rosengren sat down with the Echo to further expand on both his work in the Federal Reserve and on the board. In order to connect his two worlds, Rosengren explained why he believes that college-aged people should pay attention to, and care about, economic policy: “It affects every part of your life, whether you are getting a job, a car loan, or a student loan—all of those decisions involve economics.”
“Economics is a life skill that someone from a liberal arts education ought to have,” Rosengren said. His mindset inspired him to urge his daughter, who is also a Colby graduate, to take basic economics classes during her time on the Hill despite her being on a pre-med track.
For students who are interested in an economic-centered career, Rosengren encouraged them not to delay thinking about their options,  noting that the summer after junior year is “critically important” for job-seeking. One way in which he hopes students develop a deeper understanding of their interests is through relationships with faculty, which he cited as being fundamental to his own development while at the College.
As part of their work in New England, the Federal Reserve Bank of Boston analyzes mid-sized cities and tries to get them to be able to “tell a different story than the one they have been for the last 40 or 50 years,” according to Rosengren. He explained that one of the most important qualities for these recovering cities to have is the “ability to work well together,” within the government, non-profit, and private sectors. The College’s recent initiative to bring a Collaborative Consulting office to Waterville, aided by the Maine government, is surely an example of this type of restorative work.
While advancements are being rapidly made in order to ensure a more prosperous future for Waterville, Rosengren noted that restoring cities “doesn’t happen overnight.” He said that his career has taught him that while it takes roughly a decade to recognize noticeable change in a city, “a positive feeling can come about much more quickly.”
In addition to downtown’s revitalization, the College has also noticed increased energy surrounding admission applications—something that Rosengren attributes to better data usage. During last week’s trip to the College, he said he “spent an hour and a half with the admissions department trying to understand what data they are using and how they are evaluating it— how they are telling Colby’s story.”
According to a College press release, first-year applications numbers surged nearly 30 percent in 2015.
Circling back to the board, Rosengren responded to the fact that the majority of the College’s board members are involved in the finance industry, which some members of the community do not feel is fully representative of the diversity of students’ interests. Rosengren agreed that “diversity of thought is important to any organization,” and can come from a variety of factors—not just career choice.
He also articulated that the “real value” of the board is to be an entity that looks way into the College’s future and makes sure that its stakeholders are benefitting. With that function in mind, Rosengren said that the board’s need to “think about the economy and endowment benefits from people with a strong finance background,” and thus warrants a strong representation from that industry.
Following the interview, Rosengren headed to a lumber mill to study Maine’s industry for the Federal Reserve.

Leave a Reply