Senator Louise Lucas, chair of the Special Joint Subcommittee on Federal Impact of Resources, convened the panel in Richmond for its first meeting and invited Sonia Waddell of the Federal Reserve Bank of Richmond to present an economic baseline and highlight risks tied to federal policy.

"We created this special subcommittee so that we can assess how changes in federal policy, grant funding, and employment may affect the Commonwealth's resources and our ability to deliver services to Virginians," Lucas said when opening the session. She announced the subcommittee will next meet May 20 in Northern Virginia.

Waddell told the panel that, on balance, the national and Virginia economies have remained "remarkably resilient," but she flagged several near-term risks that could reduce growth or raise costs for Virginians. She noted the Federal Open Market Committee's median forecast for 2025 GDP growth of about 1.7% and described labor-market and inflation developments that together point to a modest slowdown rather than a sharp contraction.

Waddell cited recent payroll figures—151,000 jobs added in February and 125,000 in January—and said those gains generally keep pace with working-age population growth. She also said the February payrolls count included a reported reduction of about 10,000 federal government jobs that month, which she and the subcommittee are monitoring alongside unemployment-claim data.

On inflation, Waddell presented the personal consumption expenditures (PCE) series used by policymakers and said core inflation has been moving toward the Federal Open Market Committee's 2% target but had not reached it. She described a pattern in which goods prices rose first, followed by services, then housing, and cautioned that tariffs and supply-chain shifts could push some prices higher.

The Richmond Fed economist summarized survey data showing declining optimism: a fourth-quarter bump in business optimism fell back in early 2025, and a March drop in consumer-sentiment measures accompanied somewhat higher short-term inflation expectations. In the Federal Reserve Bank's CFO survey, about 30% of firms listed trade and tariffs among their chief concerns, and firms exposed to trade with Canada, China or Mexico reported weaker expectations for hiring, sales and revenues.

Waddell described how federal workforce and contracting are concentrated geographically. She presented Office of Personnel Management and American Community Survey–based data showing large federal employment and contract-recipient concentrations in Northern Virginia and substantial federal-related employment in Hampton Roads. She noted that federal contract dollars and the multiplier effects of federal spending can matter more in smaller local economies.

On unemployment claims, Waddell said initial UCFE (unemployment compensation for federal employees) claims and continuing claims in the D.C.-area states had risen and were a data series the subcommittee should watch; she did not provide an uncontested precise statewide UCFE total in the presentation materials. She told members that, historically, similar spikes have occurred around presidential administration transitions and during earlier federal austerity episodes such as sequestration in 2013–2014.

Committee members asked for further breakdowns: how place-of-work and place-of-residence data interact, whether contract dollars are recorded where firms are headquartered or where work is performed, and how retaliatory tariffs might affect Virginia exports such as agricultural products and manufactured goods. Waddell said the Richmond Fed has begun work on effective tariff rates by industry and county, and she offered to return or connect members with Fed staff who could drill deeper on employment, contracts and trade exposure.

The chair closed the session by directing staff to continue providing materials and data to members and confirming the next subcommittee meeting on May 20; no formal actions or votes were taken at the session.