Federal Reserve Speeches·Sep 29, 2026, 12:40 PM ET

Barr, Economic Conditions and Monetary Policy

Detroit's unemployment rate is estimated at 11 percent, significantly higher than the Michigan rate of 5 percent and the U.S. rate of 4.1 percent.
New business formation in Detroit has averaged about 6,000 firms annually post-pandemic, adding 30,000 jobs per year.
The Detroit metro area accounts for 12 percent of U.S. auto assembly and parts jobs, with national auto sales hitting an annualized rate of 16.8 million in August.
U.S. real GDP grew at roughly a 2 percent rate in the first half of 2026, with momentum expected to increase in the second half.
Inflation has remained above the Federal Reserve's 2 percent target for five and a half years, driven by tariffs, energy prices from the Middle East conflict, and AI-related investment demand.
Only two months of data over the past 20 months have shown core PCE inflation consistent with the 2 percent target.
The U.S. labor market shows rough balance with job creation averaging 80,000 per month and an unemployment rate of 4.1 percent.
AI investment is currently boosting economic activity and chip prices, while long-term productivity gains are expected to enhance living standards.
Medium-term AI effects include potential "J curve" productivity delays, risks of investment reassessment, and uncertainty regarding labor substitution versus augmentation.
AI may act as a labor substitute for entry-level workers while augmenting tasks requiring human judgment or creativity.
The Federal Reserve unanimously raised short-term interest rates to address inflation risks while the labor market remains solid.
Monetary policy is deemed unsuitable for managing structural economic changes, though higher productivity could eventually necessitate a higher equilibrium interest rate.