Federal Reserve official highlights rural challenges, local resilience and need for tailored partnerships

An agency official from the Federal Reserve System outlined the challenges and opportunities facing rural America and urged coordinated local solutions during a keynote speech.

The official said population decline and aging have reduced the rural labor force, noting that residents age 65 and older grew from 7.4 million in 2010 to 9.7 million in 2023. "These communities share many challenges and they also face distinct obstacles that require flexible solutions," the official said. Drawing on Fed research and field visits, the speaker emphasized that solutions should be tailored to local economic foundations and geography.

Why it matters: Rural areas differ widely in industry mix and geography, so one-size policies can fail. The official said when public, private and philanthropic capital align and local institutions are empowered, communities can sustain long-term growth.

The speech mixed warnings about structural strains with concrete examples. The official described a bank in Moorhead, Mississippi, that donated its closed branch to a community development financial institution (CDFI) to preserve access to banking. In Clarksdale, Mississippi, the Travelers Hotel was redeveloped using New Markets Tax Credits and became a tourism anchor. "We can and should do more to elevate these examples, sharing what works and spreading ideas that can expand opportunity," the speaker said.

The official also discussed work in Indian Country, saying local CDFIs partnered with USDA Rural Development to deliver mortgages on trust lands; "in one region, local CDFIs were able to make 35 loans. That sounds small, but it represents a 400% increase," the official said. The speaker highlighted the role of federal funding streams — including the U.S. Treasury CDFI Fund, USDA lending programs, AmeriCorps and the Appalachian Regional Commission — that can be aggregated by local intermediaries.

On external pressures, the official cited USDA and trade data showing international markets matter: roughly $175 billion in U.S. agricultural products were sold abroad in 2024, and U.S. soybean exports to China were 38% lower in the first three quarters of 2025 than the same period in 2024, a change the speaker attributed to tariff and trade policy shifts. The official also said disruptions through the Strait of Hormuz affected fertilizer supplies, driving urea prices up about 55%, and that diesel prices have risen roughly 40–50% over the past year, increasing costs across livestock and dairy supply chains.

The speech addressed emerging technology and land use, noting that AI-driven data centers are increasingly located in rural areas. "They bring potential benefits, such as tax revenue and infrastructure investment, but also significant tradeoffs, including high energy and water demands," the official said, urging local planning to weigh long-term infrastructure and job-quality impacts.

The official described the Federal Reserve System's nationwide presence and research tools — including the Survey of Household Economics and Decisionmaking, the Survey of Community Perspectives, and the Small Business Credit Survey — and said qualitative engagement complements quantitative analysis. The speaker also pointed to the Community Reinvestment Act as a mechanism encouraging financial institutions to serve underserved rural communities.

The address closed by emphasizing that sustained coordination, tailored approaches, and alignment of public, private and philanthropic capital are central to rural vitality. The official thanked the audience for their work on these issues.