On Wednesday, January 30, the Bonham Rotary Club was pleased to have a program on the economy and the role of the Federal Reserve. The speaker, Stephen Clayton, an Economic Education Specialist in the Public Affairs Department of the Federal Reserve Bank of Dallas passed out an economic dash board and explained where the national economy was, based on criteria of employment, GDP, inflation and junk-bond spread. He gave the definitions of each and how the Federal Reserve monitored each and what the targets were and how they were derived.
He gave a brief history of The Federal Reserve System, and how it was enacted by Congress in 1913 as a response to the Panic of 1907 and how the System was further enhanced in 1934 primarily through the efforts of Bonham Rotary Club member Sam Rayburn. He told the club that the Federal Reserve's goal was a stable economy, a low stable inflation rate and maximum employment. Most of the Federal Reserve's work is done through open market operations. He explained how that affects the economy and the local banks. He explained the System is a three part system made up of the Federal Open Market Committee, the national Board of Governors and the 12 Regional Reserve Banks. He outlined the territory of the Dallas Fed and its branches in El Paso, Houston and San Antonio.
Clayton also spent time explaining how the Fed ensures the acceptability of the U.S. Currency but does not print it. He explained open market operations and how the System buys Treasury bonds to regulate the money supply.
In questions and answers, he told the club of the Dallas Fed's President Richard Fisher's call to fix the Dodd Frank Act and do away with “Too Big To Fail” which got a a round of applause from the Bonham Rotary Club.
The Bonham Rotary Club meets every Wednesday at 12:00 noon at the Family Life Center in Bonham.