Dallas Fed's Laurie Logan credits region's 'growth premium' to entrepreneurial spirit, welcoming attitude and 'young, skilled and diverse' workforce » Dallas innovates

Perot Group Chairman Ross Perot Jr., long known for flying customers around in helicopters to give them a bird's-eye view of North Texas, is president and chief executive officer of the Federal Reserve Bank. (CEO) Laurie K. Logan had a tendency to do the same. Dallas. But in a keynote speech with Mr. Logan at the 14th Annual Tarrant Transportation Summit held at Hearst on February 9, the billionaire businessman admitted that that possibility was unlikely.

“I would have loved to fly her in a helicopter and take her around North Texas, but I don't think Fed regulations would allow her to fly with me,” Perot said of the summit's roughly 600 attendees. I joked before. Hearst Convention Center. “So we’re going to drive around in the truck and have her see North Texas from her road.

“It's easy to do that because Michael has done such a great job on the roads,” Perrault said, referring to Michael Morris, director of transportation for the North Central Texas Council of Governments. “I tell people, we don't really need helicopters in North Texas. Helicopters are for my customers, but our road system is so good that we don't really need them.”

Praises like Perot's for the region's burgeoning transportation infrastructure and calls for greater cooperation were heard frequently at the 2024 Tarrant County Summit, titled “Surge: Preparing for Exponential Population Growth.” Multiple sessions during the half-day program praised public-private partnerships as key to attracting more government funding for transportation projects. In the long term, participants emphasized that continued growth and economic development will depend on thoughtful and innovative transportation solutions, including a potential high-speed rail project connecting Fort Worth, Dallas, and Houston.

The region's population is expected to grow from its current 8 million to nearly 12 million by 2050, and Logan said in his meeting with Perot that Dallas-Fort Worth's “young, skilled and diverse” workforce will He said that power is a big reason for this. “The continued migration of individuals and businesses to the area is really reinvigorating it. [Fed] “The region continues to support economic growth that outpaces the nation as a whole,” she said.

The “growth premium” is made possible in part by how “open and welcoming” Texas is, she said. She explained that it often takes her 30 minutes just to leave the building because she talks to everyone along the way.

“Communities across the state are incredibly welcoming to first-timers, and this is an important cultural attribute that continues to draw people and businesses to our district,” she said. “The other thing is entrepreneurship. There's really a commitment to solving problems and really making a difference.”

Ross Perot Jr. and Laurie K. Logan attend the 2024 Tarrant Transportation Summit in Hearst. [Photo: Debra Hale, Hillwood]

Always keep an eye on supply chain and cybersecurity risks

Mr. Logan will assume leadership of the Fed's 11th District (which includes Texas, northern Louisiana, and southern New Mexico) in 2022. She previously served as vice president of the Federal Reserve Bank of New York, where she managed the Fed's multi-trillion dollar securities portfolio and conducted monetary policy as directed by the Fed's Federal Open Market Committee.

In his conversation with Perot, Logan said the Fed has made “significant progress” in bringing two key inflation measures below 3%, moving it closer to the central bank's long-term inflation target of 2%. Stated. Although she didn't mention it, it would raise the central bank's benchmark “federal funds” lending rate to a 22-year high and raise interest rates on things like credit cards and mortgages to keep prices down. Achieved by causing.

“At the same time,” she added, “we've experienced solid economic growth and the labor market, while still very tight, is easing. The risks to the economy that I've seen are becoming more balanced. We're starting to see some improvement, but I think we need to continue to look at the data over time and evaluate the data coming in. And our understanding of whether the progress we've seen in inflation to date can be sustained over the medium term. While we are deepening our confidence and deepening our confidence, we do not feel any urgency to make further adjustments to interest rates at this time.”

The Fed kept interest rates unchanged at its last meeting in late January, but many analysts expect the Fed to begin lowering its benchmark rate this year, perhaps several times.

Logan continued that while there are generally positive signs for the U.S. and North Texas economies, there are some risks he remains mindful of. One of the “geopolitical risks and potential ramifications” has to do with supply chains, which she believes are “mostly back to normal.” Nevertheless:

“We can also think of an unfortunate scenario where supply chains are disrupted again and inflationary pressures start to appear again and inflation could recede. So we need to be very cognizant of the global risks. there is.”
“I think cyber is another important area of potential risk for both financial institutions, businesses and public institutions,” she said. “That means we spend a lot of time thinking about cyber risks and preparing for potential problems. This is a really important issue that keeps us up at night.”

Logan said one of the “challenges” facing the area is that housing is becoming increasingly affordable, disrupting the community by making life harder for renters, for example. That's what it means. “Affordable housing attracts people and businesses,” she says. “Failure to maintain affordable housing could constrain future growth.”

Another potential limitation is the availability of child care, she added. “I'm thinking seriously about early education, workforce development, child care. These are the constraints that limit workforce development, labor supply to continue to grow. These are important areas for the Fed.”

The real estate crisis can affect “an entire community,” Perrault says.

Mr. Perot, who is also the founder and chairman of Dallas-based real estate development company Hillwood, asked Mr. Logan at one point in the meeting whether the Fed was concerned about the federal deficit and national debt.

She responded that while ultimately the responsibility lies with elected officials, tracking developments in fiscal policy helps central banks analyze the economy as a whole. “The key thing I always think about when it comes to fiscal policy is that we are trending toward unsustainability, which I think is a given. I think this is a very important issue for government officials. [need to] That's because it's a key factor in keeping capital flowing into the United States. ”

In an interview with Dallas Innovates after the conversation, Perot expanded on his concerns about the federal debt and deficit (concerns famously shared by his late father).

Perot said that while the economy may look good in the short term, it was excessive government spending that caused the inflation, and the higher interest rates imposed by the Fed to control inflation, and that many people He said it's the economic pain he's feeling today.

“There’s no way you can spend this kind of money and not have problems,” he said, referring specifically to the $2 trillion American Rescue Plan that became law in 2021. We're going to pay the Pied Piper someday. ”

Is there anything I can do until then? “That requires a very strong leader who will demand sacrifice from the American people,” Perot said. “We're in much better shape than the world, but it's going to take 10 years of sacrifice, and we'll be back to greatness. But no one will ask for it.”

Rising interest rates are also contributing to the impending crisis in the commercial real estate industry, with widespread declines in commercial real estate prices and values leading to increased loan defaults and reduced municipal revenues, experts say. It is said that it is bringing “Valuations will go down and tax revenue will go down,” Perot agreed. “So it's not just office building developers, it's the whole community that feels the pain of falling real estate values. … It's going to be painful.”

Sponsors of the Tarrant Transportation Summit include presenting sponsors Cintra and TEXpress. Title Sponsor Hillwood and Tarrant County 3rd Precinct Chief Gary Fix. His sponsors include BNSF Railroad, DEC (Civil Engineering), Tarrant Regional Transportation Coalition, and Platinum Fort Worth Business Press.