Federal Reserve Board Governor Barr discusses permanent extension of the New Markets Tax Credit and its role in channeling investment to low-income communities

The Federal Reserve Board published remarks by Governor Michael S. Barr marking 25 years of the New Markets Tax Credit (NMTC) and highlighting its permanent enactment. He framed the NMTC as a tax-based mechanism that helps draw private capital into underinvested rural and urban communities to support business expansion and job creation. Barr attributed the NMTC’s durability to its bipartisan origins and its structure as a public–private partnership anchored by local community development groups and business leaders. He highlighted the NMTC’s core 39 percent tax incentive, delivered over seven years, as a key factor in making investments viable and attracting investor attention, and referenced an estimate of about one million jobs supported by NMTC-financed activity. He also noted the Federal Reserve System’s community development mission and said he has recently assumed responsibility for that function at the Board of Governors, linking it to the Fed’s monitoring of economic conditions, including in low-income communities.