By Leslie Norwood

Speaking at the 2015 SIFMA Annual Meeting on the role of capital markets in their states, Governors Terry McAuliffe (D-VA) and Asa Hutchinson (R-AR) both expressed concerns about the Federal Reserve’s potential interest rate hike.

“I hope the Fed proceeds very cautiously,” Arkansas Governor Hutchinson said on Tuesday. “I think there’s indications of confidence in the economy, but there’s some subtleness in it, some shakiness that does cause you concern and so I hope that if the Fed’s proceeding by raising the rate at all, that it’s cautiously done.”

The U.S. economy’s growth and a healthy labor market have led to the possibility of an interest rate hike from the nation’s central bank, the first time in nearly a decade.

“They’ve been talking about raising the rate for a while,” Virginia Governor McAuliffe said. “I’m very nervous that they could overreact on what they’re going to do on the rates,” he added, noting that the U.S. economy is still fragile.

“The economy is still soft in many different areas. I will still argue that the economy is still very fragile out there today. We still have a lot of things going on on the world stage with China and so forth and their currency,” he said.

Gov @AsaHutchinson joins @JMSchles to talk about how to create jobs and build a thriving economy in our states pic.twitter.com/514HmhA4pH

— SIFMA (@SIFMA) November 10, 2015

McAuliffe stressed that one of the biggest issues for constituents and voters still remains the economy. “The biggest issue probably in this presidential election is individuals don’t feel that their personal financial situation has improved. In fact, most folks feel that their personal situation has actually gone down,” he said. “With the Fed, we need to be very careful about the rate increase.”

Speaking to the particular spending and investment priorities in their respective states, both governors discussed the importance of workforce development and education, particularly in the technological fields. Both Governors mentioned municipal bonds as a key financing tool for schools and other critical infrastructure projects to support economic growth.

“We have continued to build that new Virginia economy [through] workforce development and changing the way our education system works,” McAuliffe said. McAuliffe emphasized the importance of capital markets in this equation, saying that in order to have the best students, we need to have the best businesses. “If we didn’t have access to financial markets, we wouldn’t be successful. We wouldn’t be able to build things like the best education system,” he said.

Gov at #SIFMA: Building #NewVAEconomy requires smart investments in key sectors & good public-private sector co-op. pic.twitter.com/EpzDJZDLrS

— Terry McAuliffe (@GovernorVA) November 10, 2015

In that regard, Hutchinson noted that in his efforts on state economic development in Arkansas, he has particularly focused on technology education. Arkansas is the first state to mandate computer coding, Hutchinson said. “My goal is to have 20 percent of our students taking coding classes and computer science by the time they graduate, which would give us 6,000 coders in our economy.”

McAuliffe outlined a similar focus in Virginia. “I have 30,000 openings in northern Virginia today, most of them in the tech space [and] cybersecurity,” he said, noting that in order to fill those jobs, he plans to work on changing the education system to cater to the particular skill sets needed for those fields.

Leslie Norwood
Managing Director and Assistant General Counsel
SIFMA