--- source: Federal Reserve Board of Governors url: https://www.federalreserve.gov/newsevents/speech/barr20260414a.htm document_type: html date_retrieved: 2026-04-15 period: April 14, 2026 parent_publication: Federal Reserve Speech indicators_covered: [Rural Economic Development, Community Investment, Banking Access] --- # Rural Communities: Worth the Investment **Governor Michael S. Barr** | April 14, 2026 | Strengthening America's Economy through Rural Investment: A Working Forum, Washington, D.C. --- It is great to be here with you today. During my career, I've had the opportunity to work on issues affecting rural communities, especially access to capital. My time at the Federal Reserve has only deepened my appreciation for the opportunities and challenges of rural America, as I've traveled over the past several years to rural communities. These communities share many challenges, and they also face distinct obstacles that require flexible solutions. What has stood out to me is the level of innovation and creativity behind many of those solutions. We should do more to elevate these examples, sharing what works and spreading ideas that can expand opportunity and support economic growth across rural America. For example, in 2023, I had the opportunity to travel the Blues Trail in the Mississippi Delta, from Jackson to Memphis. Along the way, I met with local leaders and financial institutions, some of whom are represented here today, to learn how once-thriving rural railroad towns are adapting to both long-standing and emerging challenges. In Moorhead, Mississippi, "where the Southern crosses the Yellow Dog," I saw how a bank that had struggled to maintain a branch chose to donate its building to a community development financial institution (CDFI), preserving access to banking services for a community that needed it. In Clarksdale, Mississippi, I visited the Travelers Hotel, which was redeveloped using New Markets Tax Credits and is now contributing to the resurgence of the Blues tourism industry in that historic community. I also connected with the Delta Philanthropy Forum, a collaborative network of philanthropic partners investing in the region to deepen impact in sustainable ways. We discussed how philanthropy can serve as a critical bridge, providing capital for essential infrastructure like broadband and water systems, while also amplifying the voices of community members who are too often left out of local decisionmaking. On another trip, I met with leaders of banks serving members of the Confederated Salish and Kootenai Tribes on the Flathead Indian Reservation in western Montana. They spoke candidly about the challenges of providing affordable, accessible credit, particularly for home mortgages on trust lands. And I spoke with tribal leaders on the Blackfeet Reservation about the health and education challenges their communities were facing. And when I met with farmers, ranchers, and community leaders in Nebraska, I heard about how shifts in labor availability, production costs, and technology are creating uncertainty for them, as well as for anchor institutions like hospitals and schools. At the same time, I heard powerful examples of resilience and opportunity, from young entrepreneurs planting the seeds of innovation to farmers reaching new markets with their crops. Rural Communities Are Diverse but Face Some Common Challenges My travels have shown me the great diversity across rural communities and reinforced the importance of adapting approaches rather than relying on a single narrative or uniform community development policy. As this audience knows well, rural America is not one story but many. Its economic foundations, geographic characteristics, and future trajectories differ not just from region to region but often from one community to the next. Rural communities are highly diverse in ways that shape both their challenges and opportunities. Their economic outlooks are closely tied to local industries, which vary widely from oil and gas or manufacturing to agriculture. At the same time, the physical and spatial nature of rural areas differ across regions, with some places featuring closely connected, denser towns and others defined by vast distances and limited access to urban centers, influencing everything from services to labor markets. The outlook for rural communities is far from uniform: while some struggle with workforce shortages, affordability issues, and institutional decline, others are adapting and thriving by diversifying their economies, strengthening local leadership and institutions, and leveraging natural or cultural assets to attract residents and visitors. While each rural community is unique, these areas share a common reality: vitality requires sustained effort, coordination, and intention. This is true whether the challenges stem from intrinsic issues, such as population trends; externally generated events, such as trade policy and geopolitical events; or longer-term trends, including artificial intelligence. I will discuss each of these. Intrinsic Constraints in Rural Areas Research shows many communities face overlapping intrinsic structural challenges that complicate economic revitalization. A key constraint is population decline and aging. U.S. Department of Agriculture (USDA) data show that in 2023 rural counties had relatively low shares of prime working-age adults, those aged 25 to 54, while residents 65 and over grew from 7.4 million in 2010 to 9.7 million in 2023. This imbalance leaves a smaller labor force supporting both younger and older populations. At the same time, migration—especially from foreign-born individuals—has become critical: between 2020 and 2025, 47 percent of rural counties grew, but only 25 percent did so through increases in their local population, while over 86 percent relied on net migration. - Extrinsic Shocks Rural communities are also vulnerable to external shocks that can disrupt local economies. These include fluctuations in commodity prices, changes in trade policy, and geopolitical events that affect export markets. For example, recent tariff announcements have created uncertainty for agricultural producers, while supply chain disruptions have increased costs for rural businesses. The Federal Reserve monitors these developments closely as part of its mandate to promote maximum employment and stable prices. While monetary policy cannot target specific regions or industries, the transmission of policy decisions—through interest rates, credit conditions, and financial stability—affects rural areas in different ways than urban centers. Our research seeks to better understand these differential impacts to inform our policy discussions. - Longer-Term Trends Beyond cyclical fluctuations, longer-term structural trends are reshaping rural America. Technological advancements, including artificial intelligence and automation, are changing the nature of work in both agriculture and manufacturing. Climate change presents ongoing challenges through more frequent extreme weather events. And demographic shifts continue to alter the composition of rural populations. The Federal Reserve's community development function plays a key role in understanding these trends. Through our network of community development staff across all 12 Reserve Banks and the Board, we engage directly with rural stakeholders to hear about on-the-ground realities. The insights from those conversations inform our policy work and help us design more effective solutions. Supporting Rural Communities Through Data and Engagement The Federal Reserve works to develop a deep, data-driven understanding of local economic conditions across the country. We conduct original research through tools such as the Survey of Household Economics and Decisionmaking, the Survey of Community Perspectives, and the Small Business Credit Survey. Just as importantly, we complement this quantitative work with qualitative research to better understand the "why" behind the data. We also recognize that a community's ability to attract and deploy capital is essential to its vitality and resilience. Within our broader framework, our implementation of the Community Reinvestment Act (CRA) plays an important role in encouraging financial institutions to meet the needs of the communities they serve. Activities aimed at revitalizing or stabilizing distressed or underserved rural communities are part of CRA. Despite this progress, the needs of rural communities often exceed the resources available. And yet, what we consistently see—both in research and in communities across the country—is that when multiple sources of capital come together, when public, private, and philanthropic partners align, communities can truly thrive. That is why your work is so important. Thank you very much.