Federal Reserve Board Vice Chair Philip N. Jefferson spoke at Brookings on Friday Feb 6, 2026. His key point was that, while inflation is still at 3%, already above the target of 2%, he expects inflation to fall as the tariffs make their full way through the system. In his judgment, this is a one-time price level change rather than an ongoing price increase spiral since he believes inflation expectations remain well anchored. Key Drivers The pandemic showed that supply-side factors such as labor shortages, supply chain disruptions, and commodity price spikes following conflicts like the Ukraine war, are crucial. New tariff policies, immigration restrictions that cut the supply of labor and large AI-driven infrastructure investments are some of the current day challenges. China, Canada A panel discussion addressed the electronic vehicle (EV) industry and the evolving trade relationship between China, Canada, and the United States. Panelists noted that China’s slowing domestic economy ha...
Bankers are trained to think about risk in familiar terms: interest rates, credit quality, capital ratios and macroeconomic cycles. What they are less accustomed to modeling—but increasingly cannot ignore—is the economic cost of civic disruption. Recent events in Minneapolis illustrate why. An amicus brief I filed in federal litigation involving the Minneapolis immigration enforcement program , Operation Metro Surge, documents $275–$320 million in cumulative economic harm tied to prolonged civic unrest, business shutdowns, school disruptions and emergency public-sector costs. These losses are not abstract. They translate directly into revenue volatility, labor-market disruption, impaired small-business cash flow and declining commercial corridor performance—all of which matter to banks. Small businesses in affected areas experienced revenue declines of 50% to 80% on disruption days, while public-sector overtime and emergency coordination costs exceeded $5 million per month. The burden ...