Federal Reserve Bank Governors have been doing the rounds lately, speaking at conferences, sitting down for media interviews and discussing the outlook for inflation, interest rates and the US economy in 23.
- At a recent conference in Houston, Dallas Fed President Lorie Logan noted that despite inflation easing, inflation remains far too high and the Fed still has work to do.
- Cleveland President Loretta Mester told the Financial Times the Federal Reserve is not yet ready to halt its rate-hiking campaign.
- St. Louis President James Bullard told Barron’s that financial markets are underestimating the likelihood that the Fed will continue to aggressively raise interest rates in 23 to curb inflation.
- New York Fed President John Williams told the Economic Club of New York that rates need to rise higher and stay there until late 23, and not fall until sometime in 24.
- Bank of Richmond President Thomas Barkin told Bloomberg Television he favors slowing rate hikes but added they may need to stay high longer to contain inflation.
- Fed Chair Jerome Powell recently told the Brookings Institution that while the Fed plans to slow the pace of rate hikes, there is “a long way to go” before inflation is tamed, so rates will be higher next year would be.
Why it matters
The Fed has hiked interest rates except for one of the seven Federal Open Market Committee (FOMC) meetings in 22. Economists fear that higher interest rates will push the US economy into recession.
If higher interest rates are inevitable, is a recession inevitable? If the US slides into recession, is Houston far behind? The partnership will answer both questions on Thursday, December 8 when it presents its Houston Economic Outlook for 2023 at the Royal Sonesta Hotel.
The program begins at 10:30 am with a business expo and networking event. A few stands are still available. Organizations wishing to exhibit should contact Samantha Hodges ([email protected]) or Mikayla Collins ([email protected]).
Ballroom doors open at 11:45 am and lunch is served midday. At 12:30 p.m., a discussion will begin between experts from industries critical to the growth of the region. This year’s panelists and the industries they represent are:
Healthcare: Doug Lawson, President and CEO, CHI Texas Division, St. Luke’s Health. CHI is a $2 billion regional healthcare system with 17 hospitals in Southeast Texas.
Finance: Isaac Johnson, President and CEO, TDECU. He oversees Houston’s largest credit union with over $4.3 billion in assets and 360,000 members.
Retail: Armando Perez, Executive Vice President, HEB. The well-known grocery chain was ranked ninth on Forbes’ 2020 list of America’s Largest Private Companies.
Design/Engineering: Leslie Duke, President and General Manager, Burns & McDonnell. The Company focuses on the design and construction of high-voltage, refinery, chemical, terminal and pipeline facilities.
Following the discussion, Patrick Jankowski, the partnership’s chief economist and senior vice president of research, will present the partnership’s outlook. All participants will receive a printed copy at the event.
To register for the luncheon, panel discussion and forecast, go to the Events section of the Partnership website, www.houston.org, or click here.
A view from the oil field
It has taken almost three years, but the US rig count has recovered almost all of its pandemic losses. Baker Hughes reports that in the week leading up to Thanksgiving there were 784 rigs operating across the US. That number is just below the 790 that were in service in mid-February 20. It had fallen to a recessionary low of 244 in mid-August 20 before embarking on a long, slow recovery.
Production has also steadily improved. The US Energy Information Administration (EIA) estimates that domestic production reached 11.98 million barrels per day (mb/d) in August 22 from the pandemic low of 9.71 mb/d in May 20. That is still close below the November 19 peak of 13.0 mb/d.
Employment is not quite there in the recovery. Texas Workforce Commission (TWC) data shows the state has regained 84.1 percent of oilfield service (OFS) jobs and 63.2 percent of exploration and production (E&P) jobs that were lost in the downturn. Houston is lagging the state, recovering just 54.5 percent of its E&P losses and 50.8 percent of its OFS losses.
To read more, download this report.
Note: The geographic area referred to in this publication as “Houston,” “Houston Area,” and “Metro Houston” is the nine-county census-designated Houston-The Woodlands-Sugar Land, TX Metropolitan Statistical Area. The nine counties are: Austin, Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery and Waller.
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