By A.J. Kaufman, Managing Editor
Regional economic shifts, national trends, workforce housing and more merged again at the fourth annual Appalachian Highlands Economic Forum.
Held March 27 inside the ETSU Martin Center for the Arts, the conference invited Tom Barkin, president and CEO of the Federal Reserve Bank of Richmond, to deliver a keynote address.
The four-hour gathering brought back familiar academics from ETSU and financial voices like Leton Harding Jr., president and CEO of Powell Valley Bank. He spoke about housing challenges across the region, the average age of first-time homebuyers skyrocketing to nearly 40, and particularly that median income no longer gets you a median home.
Barkin oversees the Richmond Fed’s operations and serves on the Federal Reserve System’s Federal Open Market Committee. Before joining the Richmond Fed, he was a senior partner and CFO at McKinsey & Company.
Barkin spoke for roughly 10 minutes and then engaged in a 45-minute moderated question-and-answer session with ETSU Professor of Practice Kevin Kilgore. A key theme of his comments was emphasizing the Federal Reserve’s independence and dual mandate to promote maximum employment while controlling inflation.
“There are things we can do about inflation, but we are not the only actors in the puzzle,” Barkin explained, citing wars, immigration and fiscal stimulus effects on monetary policy. “A lot happens in the world that we are not responsible for. In the end, we just have to look at what’s happening with inflation and employment and react to the world we’ve got.”
Amid a combination of deregulatory efforts, tariffs, artificial intelligence, plummeting net migration, war, oil price shocks and more, Barkin says there is a considerable amount of “fog” spreading and deepening across America, leading to uncertainty. He also noted that inflation remains above the 2% target point, employment growth is near zero, and younger workers are struggling to find jobs.
Barkin, however, demonstrated a measure of cautious optimism.
“Despite all this noise, the economy keeps chugging along,” he explained. “While sentiment is low, the fundamentals are good. Unemployment remains at low levels, real wages are up, asset values are elevated, earnings are up double digits, and the scale of data center investment has been remarkable.”
He said that even though people are still spending, the labor market feels fragile, apart from the skilled trades, healthcare and job opportunities in smaller towns. Barkin says he does not see the hiring picture changing.
“A lot of people are finding productivity from automation, from staffing models, and uncertainty is high,” he explained. “It’s just not an environment where you are going to hire.”
To conclude, Barkin replied to a question from Kilgore by explaining how interest rate changes have come to fruition.
“The way you manage inflation is taking interest rates up. Taking interest rates up has a time problem, which is it hurts the economy in the short term and helps in the medium term,” he explained. “If you say, here’s a proven remedy that’s bad in short term, good in medium to long term, what class of people does not like that remedy? Politicians, because politicians have to run for election, and nobody wants bad short term in exchange for better medium term. So, in this country, and developed nations across the world, we give that responsibility to an independent set of people who make this decision clear of political considerations…And it makes sense to do it that way. It has led to the best inflationary outcomes in the history of this country.”
Taylor Stevenson, chair of the Department of Economics and Finance, spearheaded the forum, which also featured:
- Dr. Aryaman Bhatnagar, assistant professor of economics, addressing the rising U.S. debt.
- Dr. Anca Traian, associate professor of finance, speaking about the intersection of finance and artificial intelligence.
- Dr. Jon Smith, professor of economics, on healthcare’s role in the regional economy, particularly the One Big Beautiful Bill Act’s impact on rural hospitals due to the bill’s Medicaid cuts.
- Dr. William Trainor professor of finance, with advice and insight on stock market investing.
“From time to time, it is good for a region to look itself in the mirror,” Harding told the Business Journal after the forum. “The experience of attending and speaking at the ETSU Economic Forum was enlightening to me on so many levels, including reenforcing my belief in the working assets of our region to help guide us down a road of sustainable development.”
