By Dee Longfellow
About 350 people came to Hilton Oak Brook Hills to attend the annual Multi-Chamber Economic Outlook Luncheon and Business Expo on Thursday, April 4. Guests wandered through the exhibits on display prior to the luncheon seating, after which was the program featuring Federal Reserve Bank president and CEO Austan D. Goolsbee.
In the past, the speaker usually gave a straight speech from the podium with a few slides showing bullet points of trends. This year’s event was a little different in that Dr. Charles Cassidy, who works with Worknet DuPage, Choose DuPage and other business incubators, sat with Dr. Goolsbee on the stage and asked questions in a “fireside chat” format. Most attendees who spoke with the Independent liked the casual conversational presentation of the “chat” but others liked the old way, when bullet points appeared on a screen. All agreed, including Goolsbee, that Cassidy had “done his homework” and presented topics that made for a lively and informative discussion that even allowed time for questions from the audience.
Local response
For an overview of the program, the Independent talked to a few people who attended to gather their thoughts and take-aways from the program.
Scott LaMorte, vice president of New Business Development for Community Bank of Elmhurst (CBE), said he enjoyed the presentation under the new format, but indicated that nothing in the program particularly surprised him.
“Dr. Goolsbee’s commentary really seemed to reassure the Feds’ cautious approach to the economy,” he said. “I did take away the notion that the Feds are really looking at the economic picture holistically thorough a lot of economic indicators. Hopefully, that will be to our benefit in 2024.”
The Independent also spoke with a noted financial planner located in Elmhurst, who needed to remain anonymous, said he felt the speakers were underplaying some of the potential risk.
“If China is struggling with its economy, that doesn’t automatically mean it will reach us.
But overall, he agreed the program offered an interesting perspective,” he said. “Housing is in a weird conundrum. Part of the reason housing is high is because of interest rates. If a person sells a house with a 3% mortgage and buys a new one with a 6% mortgage rate, well, it almost creates a Catch-22 scenario. Lower interest rates spur the housing economy, but people aren’t as inclined to sell their homes, because wherever they go, the interest rates will be higher.
“The other part is that he said the housing inflation is one of the more important metrics to look at when you talk about inflation getting under control, so if they were to lower interest rates, people would potentially be more inclined to sell their houses, if they could secure a lower interest rate on the next one – but if they lower the interest rates, that’s going to spike the demand for housing. How do you get housing inflation under control in that scenario?”
Finally, John R. Quigley, president and CEO of the Elmhurst Chamber of Commerce & Industry (ECCI), had this to say:
“I thought it was really important that he noted nearly every economist in the U.S. predicted a recession in 2023, even though 2022 wasn’t too bad, when the 2023 GDP growth exceeded the norms, especially in the last quarter, well, so much for all those expert opinions. It related to the post-Covid economy in which normal financial formulas such as supply and demand, rising interest rates, etc. In a post-Covid economy, that all goes out the window.
“Rarely do you see a time when inflation goes up, interest rates go up, yet jobs are good, salaries are going up and unemployment rates are low. In historical perspectives, one of those can happen, but not all – but that’s what we’re seeing – esp. in Chicago… the fact that housing interest rates are up for home loans, that usually means home prices go down – but out here [in the western suburbs], they’ve gone up – it’s going to cost more to get a mortgage. Home sales are strong – if mortgage rates are up, that should slow them, but they’re all growing.”
In another example, Quigley noted that when interest rates are high, businesses tend to hunker down and ride it out, but businesses are still investing and expanding despite higher interest rates.
He also commented on the speakers mention of a boom in entrepreneurship, which started around 2016-17 even before the pandemic. Many of the people who had to work from home during Covid decided to start their own businesses.
