US Bancorp : Seven questions with Tendayi Kapfidze, head of economic analysis at U.S. Bank

Kapfidze joined U.S. Bank last summer as the company's first-ever chief economist.

Since joining U.S. Bank last year as its new head of economic analysis, Tendayi Kapfidze has built on the company's existing economic researching capabilities supporting client-facing businesses as well as economic scenario planning. He also helps consumers understand the economy through media appearances on outlets including MarketWatch and CNBC.

What made you want to become an economist?

I actually studied engineering. I stumbled into economics when I was working at Bank of America. I'm a failed engineer and accidental economist.

What does an economist do?

There are lots of different types of economists depending on the industry. At banks, mostly you have macro economists and financial economists. Their role is largely about trying to figure out how the economy - and by that I mean things like growth, inflation, interest rates, employment, etc. - and the financial system interact. Bank economists are largely trying to figure out the trends, and some of the causal effects that might cause changes in those variables.

You've worked as an economist at companies including Pfizer, Lending Tree and now U.S. Bank - how much does your role change based on what industry you're in?

Internally, the work is very similar in terms of the analytical process and types of research that I read. The difference across the different companies is really the audience, and when the audience changes you have to change how you communicate the things that you're seeing about the economy.

For example, at a bank you're mostly dealing with an expert audience -- people who are in financial services and are around, or are adjacent to, a lot of financial information.

At other companies, where most of the audience I was dealing with was consumers, that's another different way of communicating. You really have to drop a lot of industry jargon, and you can't talk about all of the inside stuff.

Since the pandemic began more than two years ago, it's been an unprecedented time for the economy. What's been the biggest surprise to you?

Probably the biggest surprise for me was really the strength of the response from the federal government in terms of fiscal policy and monetary policy. I generally believe that the response to the COVID recession was the best macroeconomic policymaking in the history of the United States.

Now, they probably did a little too much, and we are paying for it with all of this inflation that we are experiencing. But in my estimation you're never going to get economic policy exactly right. It's impossible to do. You're going to make one of two errors - you're either going to do too little or you're going to do too much. But I'll say we're certainly in a better position than if they had done too little.

As you noted, we're experiencing inflation as a consequence - this week the Labor Department said inflation hit its fastest pace since 1981. How can someone protect themselves against skyrocketing prices of everything from gasoline to natural gas to groceries?

Obviously, you can't protect yourself completely. Part of the challenge, especially this year, is that the things that are going up in cost are the things you can't avoid. What do I mean by that? If you look back to last year when inflation started picking up - right around this time, actually - some of the things that were rising rapidly were things like cars and used cars. If you were not buying a car, you were not participating in that inflation and it basically had nothing to do with you.

Now, with inflation hitting things like gasoline, rent and food, these are things most people participate in in some way in a daily basis. Some of this inflation is unavoidable. But what you can do is adjust your spending in other areas to try to manage your finances a little bit better. Some of it is tough to avoid, but you can make changes on the margins to get some relief. This is the standard stuff you should be doing anyway whether there is or isn't inflation - you should be budgeting, knowing where your money is going and tracking your long-term financial goals. You should be doing that all the time, because once you build that muscle you have it ready for a time like this when there's high inflation.

What's the economic worry that keeps you up at night?

Obviously, the inflationary environment that we're in is of concern. We've seen that the Fed is reacting to it by tightening monetary policy. The Fed is trying to achieve something called a soft landing, easing demand in the economy just enough to bring down inflation without tipping the economy into a recession. That's a really difficult thing to do, and is something that's going to play out over the next two to three years. We've got a lot of runway to see how the Fed's actions impact the economy. I wouldn't say it keeps me up at night but it's the question everyone is trying to figure out.

Speaking of staying up at night - you're the father of triplets who were born during the peak of the pandemic. What has that been like?

It was pretty crazy; they were actually born in one of the worst weeks in New York in terms of the realization that the pandemic was here. The week they were born the hospitals in New York weren't allowing spouses or partners or anyone with the mother. So my wife essentially was alone in the hospital giving birth to triplets while I was on Facetime. Fortunately, the girls were very healthy - they spent a few weeks in the NICU and came home.

One of the strange things and the silver lining of the pandemic is that everyone was at home so I got to spend more time with them than I would have been able to otherwise. They're just fantastic. And they go to sleep at 7 p.m. and they don't wake up until 7 a.m. the next morning. When we were taking them home from the NICU, one of the last things the nurses told us was, "we have them on a great schedule. If you mess up this schedule, that's going to be the end of your life." So, we've kept them on it and it's turned out well for all of us.