Council of Economic Advisers

• WASHINGTON, Dec. 12, 2023 (GLOBE NEWSWIRE) -- On Tuesday, December 12, Administrator Isabel Casillas Guzman , head of the U.S. Small Business Administration (SBA) and the voice in President Biden’s cabinet for America’s 33 million small businesses, hosted a Small Business Lending Summit at the White House alongside the National Economic Council (NEC) to discuss the Biden-Harris Administration’s strong record on lending to small businesses.
• Participants shared successes for their small business lending strategies and highlighted how recent SBA changes to modernize their lending programs have allowed for a broader and more diverse set of credit-worthy businesses to access loans, and how their improved processes have accelerated access to capital for small business borrowers.
• They also discussed strategies and shared best practices for facilitating more equity in small business lending.
• Last year, the SBA partnered with lenders to provide a historic $34 billion in small business loans through their signature 7(a) and 504 loan programs.

• Anderson will lead the Social Finance Institute to amplify outcomes-based practices and build cross-sector momentum.
• BOSTON and WASHINGTON, Oct. 12, 2023 /PRNewswire/ -- Today, Social Finance announced that Karen Anderson has joined to lead the Social Finance Institute , a first-of-its kind platform designed to bridge theory and practice for market leaders, policymakers, and practitioners looking to implement and scale outcomes-based solutions.
• Social Finance has mobilized more than $350 million in new investments designed to link funding to results in workforce and economic mobility, health, and housing.
• As inaugural Managing Director of the Social Finance Institute, Anderson will lead field-building efforts through applied research and publications, drawing on the work of leaders in the field—including Social Finance's 12 years of on-the-ground experience.

• Today, the National Multifamily Housing Council (NMHC) launched the Foundations for Rental Housing —a groundbreaking effort aimed to support residents as they build their lives in rental communities.
• The announcement follows a meeting today between NMHC leaders and the White House to discuss how housing providers can better implement resident-centered housing management practices.
• The Foundations identify six core concepts that form the basis of a positive relationship between rental housing providers and residents.
• “NMHC is delighted to partner with the White House in meeting the goals of the White House's Resident-Centered Housing Challenge.

• The Federal Reserve’s decision to hold rates steady signals that central bankers believe it is time to hit pause, at least temporarily, on their aggressive campaign to tame runaway inflation.
• The latest data, not to mention several other factors, however, suggests it’s time for a full stop.
• Over 10 consecutive hikes beginning in March 2022, the Fed had raised rates a whopping 5 percentage points.

Inflation is lower than it appears

• The fastest rate of inflation since the 1980s is what prompted the Fed to hike interest rates so much.
• So it makes sense that inflation would be a key indicator of when its job is complete.
• Using current rents would put inflation much closer to where the Fed wants it to be.
• Jason Furman, former chair of the government’s Council of Economic Advisors, created a modified version of core inflation – which uses a market-based measure of shelter prices – at 2.6%.

The risk of more rate hikes

• Moreover, it is likely that further rate hikes will do more harm than good – particularly to the banking sector – and without helping lower inflation below its current trajectory.
• Several regional lenders, including Silicon Valley Bank and First Republic, collapsed earlier this year following bank runs.
• While there were several factors behind the banks’ demise, an important one was the Fed’s aggressive rate hikes, which caused the value of many of their assets to fall.
• The banks catered to depositors with accounts that exceeded the US$250,000 threshold protected by the Federal Deposit Insurance Corporation.

Don’t make the same mistakes

• The Fed was behind the curve in 2021 and 2022 in realizing inflation was getting out of control, and it has been historically slow in recognizing the impact of rental rates on inflation.
• But if it continues to raise rates, I believe the central bank will be repeating the same mistakes it made in the past.