President's Letter: 2021 Annual Report

President Harker highlights how our staff worked to
support communities in the Third District and the U.S.
on the path to recovery.

If there is one thing 2021 taught all of us, it is that the path to recovery is far from linear. This was a year characterized by periods of both remarkable progress and heartbreaking setbacks. A year marked by mass vaccination against COVID-19 and the Delta and Omicron surges; a year where employment and gross domestic product growth surged, but so did inflation.

For the staff of the Federal Reserve Bank of Philadelphia, 2021 was a year of responding for recovery. Our Bank kept a pulse on the economy and its impact on people’s lives through our data analysis and research and through listening to our partners and stakeholders. This approach enabled the Philadelphia Fed to be nimble and responsive, staying true to our mission and long-range vision while pivoting to address the challenges of the moment as they arose. All the while, we worked tirelessly to support the Third District and the nation on its bumpy road to recovery.

In the annual report that follows, you will learn about just a few of those many efforts – and I invite you to explore our website to get a sense of the remarkably broad, deep, and important work that our Bank staff performs each day.

In keeping with the Federal Reserve’s mandate, the Federal Reserve Bank of Philadelphia kept a laser focus on trends in labor markets, gathering data from District businesses and consumers nationwide to deepen our insight into national and regional trends.

For all people, nothing is more important than having a safe and secure place to call home. With this in mind, the staff of the Philadelphia Fed trained an eye on trends in both homeownership and rentals, with a particular emphasis on the pandemic’s disparate impact on communities of color. Our Bank staff performed path-breaking research and analysis of mortgage defaults and forbearance, producing actionable research that informed not only monetary policy, but federal housing policy as well. Our research on rental debt sized up the quantitative magnitude of the problem, and also added important context by including tenant experiences and analysis of the impact of government policies.

Our Bank kept a particular focus on small businesses, one of the most crucial planks of the U.S. economy, and a key driver of upward mobility. The Federal Reserve Bank of Philadelphia’s yearlong Reinventing Our Communities program focused on building capacity for small business owners of color. Fully aware that we are at our best when we learn from our stakeholders’ experiences, we convened a series of virtual roundtables with small business owners across the State of New Jersey.

And while we missed the sense of community and camaraderie that comes from in-person events and look forward to resuming them soon, we aggressively pursued virtual convenings, hosting digital conferences on subjects as diverse as auto lending, higher education, and financial technology. Our virtual Diversity, Equity, and Inclusion Forum, which you can read more about in First Vice President James Narron’s letter, enjoyed record attendance.

Fortified by the knowledge that 2022 will bring both challenges and opportunities, and steadfast in our resolve to respond to whatever circumstances are thrown our way, the Federal Reserve Bank of Philadelphia stands ready to continue to build our recovery and to foster an economy that supports all residents of the Third District and the entire country.  

Sincerely,

Patrick T. Harker