For release on delivery
12:30 p.m. EDT
April 5, 2024
Risks and Uncertainty in Monetary Policy: Current and Past Considerations
Remarks by
Michelle W. Bowman
Member
Board of Governors of the Federal Reserve System
at
"Frameworks for Monetary Policy, Regulation, and Bank Capital"
Spring 2024 Meeting of the Shadow Open Market Committee, hosted by
the Manhattan Institute
New York, New York
April 5, 2024
Thank you for the invitation to speak to the Shadow Open Market Committee (SOMC).1
The SOMC has a distinguished reputation for fostering substantive analysis and debate regarding
It's a
independent, transparent, and systematic approaches to central bank policymaking.
pleasure to join you today and to discuss some of the current issues facing central banks and
monetary policymakers.
In my remarks today, I will review some of the notable developments in the U.S.
economy and financial system-as well as review key monetary policy actions and
communications-since I joined the Board of Governors of the Federal Reserve System and
became a permanent voting member of the Federal Open Market Committee (FOMC) in late
November 2018. As I look back over these five-plus years, I will consider how a range of
uncertainties and risks regarding the macroeconomy and its measurement have affected
monetary policy decisions and communications. I will also highlight some considerations
regarding financial stability risks and monetary policy. I will conclude with my own views on
the near-term economic outlook, some of the prominent risks and uncertainties surrounding my
outlook, and my views on the implications for monetary policy.
Setting Monetary Policy amid a Wide Range of Uncertainties and Risks
An omni-present challenge monetary policymakers face is how to account for
uncertainties surrounding the current state of the economy and the economic outlook when
setting monetary policy. Macroeconomic models that can help guide the setting of monetary
policy often invoke unobservable concepts such as the natural rate of unemployment, potential
output, or the neutral real interest rate. These unobservable concepts can be estimated but only
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with a considerable degree of uncertainty, and the estimates may vary over time-for example,
because of structural changes in the economy. Macroeconomic models are also subject to
uncertainty, since they must make simplifying assumptions regarding the complex set of
relationships and interactions among households, businesses, governments, and the financial
system that also evolve and change. Moreover, the data that are used to estimate model
parameters and to formulate the economic outlook are inherently uncertain and are often revised
as the statistical agencies refine their estimates or gather more information.
In addition to uncertainties surrounding macroeconomic models and measurement, there
are a number of risks that, if realized, could shock the economy and financial system, making it
more difficult for policymakers to confidently assess the economy and the economic outlook.
Despite these challenges, monetary policymaking requires a forward-looking approach, since its
actions affect the economy, labor markets, and inflation with a lag.2
The post-financial crisis economy and monetary policy at the zero lower bound
When I joined the FOMC in late 2018, despite nearly a decade of accommodative
monetary policy following the financial crisis and subsequent recession, one of the primary
the Committee's
concerns was that inflation had persistently been running slightly below
2 percent inflation target. There was a recognition that the "natural rate of unemployment" may
have been lower than many on the FOMC had estimated, and that inflation may have become
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less responsive to reductions in the unemployment rate.3 This recognition meant that preemptive
increases in the federal funds rate based on expected reductions in the unemployment rate alone
may not have been needed to keep inflation and inflation expectations aligned with the
Committee's 2 percent target.
A central topic of FOMC meeting discussions throughout 2019 was how monetary policy
strategies and tools could best achieve the Committee's dual mandate of price stability and
maximum employment when structurally low interest rates and disinflationary forces kept
under the Committee's
inflation persistently inflation target. There was also a concern that the
federal funds rate, the FOMC's key policy rate, was too close to the "zero lower bound." And
limit the Committee's ability to respond effectively to an adverse shock
that this proximity could
by using our primary monetary policy tool of lowering the target range for the federal funds rate.
More broadly, many central banks around the world were grappling with the prospect of
structurally lower interest rates due to a variety of factors, including demographic changes and
higher savings rates, lower potential output and productivity growth, and greater investor
demand for safe assets like Treasury securities.
At the time, the FOMC assessed that downward risks to both employment and inflation
were likely to remain prominent due to the proximity of interest rates to the zero lower bound.
In August 2020, the FOMC significantly revised its Statement on Longer-Run Goals and
Monetary Policy Strategy to reflect this assessment.4 A notable change relative to the initial
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statement adopted in 2012 was a change in the language addressing how the FOMC would
The new statement noted that the Committee would seek "to mitigate
conduct monetary policy.
[emphasis added]"-rather than "deviations"-"of employment from the Committee's
shortfalls
assessment of its maximum level and deviations of inflation from its longer-run goal."5 By
the word "deviations" "shortfalls" when describing
replacing with employment and the
Committee's
reaction to changes in employment relative to estimates of its maximum level, the
Committee indicated that it would not act preemptively to curb inflation based only on the
perception of labor market tightness.
Another notable change to the strategy statement was the adoption of what some refer to
as flexible average inflation targeting" or "temporary price level targeting."6
"asymmetric
statement noted that
Specifically, the new "in order to anchor longer-term inflation expectations
at [its 2 percent goal], the Committee seeks to achieve inflation that averages 2 percent over
time, and therefore judges that, following periods when inflation has been running persistently
Monetary Policy," a symposium sponsored by the Federal Reserve Bank of Kansas City, held in Jackson Hole, Wyo.
(via webcast), August 27, https://www.federalreserve.gov/newsevents/speech/powell20200827a.htm; and Richard
H. Clarida (2020), "The Federal Reserve's New Monetary Policy Framework: A Robust Evolution," speech
delivered at the Peterson Institute for International Economics, Washington, August, 31,
https://www.federalreserve.gov/newsevents/speech/clarida20200831a.htm.
5
Goals and Monetary Policy Strategy, available on the Board's
See the most recent Statement on Longer-Run
website at https://www.federalreserve.gov/monetarypolicy/files/FOMC_LongerRunGoals.pdf (quoted text in
Previous versions of the statement had noted that the Committee would seek to mitigate "deviations
paragraph 5).
of inflation from its longer-run goal and deviations [emphasis added] of employment from the Committee's
(paragraph 5).
assessments of its maximum level" For a more detailed look at the changes in the 2020 strategy
statement relative to the earlier statement first adopted in 2012, see Board of Governors of the Federal Reserve
System (2021), "Review of Monetary Policy Strategy, Tools, and Communications,"
webpage,
https://www.federalreserve.gov/monetarypolicy/guide-to-changes-in-statement-on-longer-run-goals-monetarypolicy-strategy.htm.
6
See Richard H. Clarida, "The Federal Reserve's New Framework and Outcome-Based Forward Guidance," speech
delivered at "SOMC: The Federal Reserve's New Policy a forum sponsored by the Manhattan
Framework,"
Institute's Shadow Open Market Committee, New York, New York (via webcast), April 14, 2021,
https://www.federalreserve.gov/newsevents/speech/clarida20210414a.htm.
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below 2 percent, appropriate monetary policy will likely aim to achieve inflation moderately
above 2 percent for some time."7
FOMC's
The revisions to the statement focused on monetary policy in a world of
structurally low interest rates, disinflationary forces, and an apparent insensitivity of inflation to
low levels of unemployment. Although the revised statement reaffirmed the commitment to the
Committee's inflation target,
it did not describe how the Committee would respond if inflation
were to run persistently above its 2 percent goal.8
Given the timing of its implementation, the revised strategy guided how the FOMC
responded to one of the largest shocks experienced by the U.S. economy in recent years-the
COVID-19 pandemic. This shock-combined with the policy responses of governments and
central banks around the world-disrupted many of the dynamics that had influenced the
economy over the previous several decades and the post-2008 financial crisis approach to
monetary policy. These impacts will affect how we think about monetary policy going forward,
but let's first put the COVID-19 event and response into better context.
The COVID-19 shock and monetary policy response
of the FOMC's monetary policy framework review,
Toward the latter part in March
2020, the COVID-19 pandemic created an unprecedented shock to the global economy and
financial system. Widespread economic lockdowns and social distancing, combined with other
pandemic effects, caused the swiftest and deepest contraction in employment and economic
activity since the Great Depression. Many critical parts of the U.S. financial system experienced
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significant disruption or completely ceased to function. The Federal Reserve responded
forcefully to mitigate the financial market turmoil and the economic effects of the rapid
(and I'll have more to say on
shutdown of the U.S. economy this topic later).
As a part of its response, the FOMC quickly lowered the target range for the federal
funds rate back to 0 to 1/4 percent and began purchasing large amounts of Treasury and agency
mortgage-backed securities. These purchases were initially designed to support the smooth
functioning of securities markets and the flow of credit to businesses and households. Later, the
purchases provided additional monetary policy accommodation to support economic activity and
labor markets.9
Following the return to the zero lower bound, in addition to conducting asset purchases,
the FOMC used forward guidance to provide additional monetary policy accommodation to keep
both short- and longer-term interest rates low. In its March 15, 2020, statement, the FOMC
noted that it expected to maintain the target range for the federal funds rate at 0 to 1/4 percent
"until it [was] confident that the economy [had] weathered recent events and [was] on track to
achieve its maximum employment and price stability goals."10 Following the release of the
revised framework in August 2020, the FOMC revised the forward guidance in its September
post-meeting statement to be more explicitly outcome-based to state that the target range would
remain at 0 to 1/4 percent
"until labor market conditions have reached levels consistent with the
9
The Federal Reserve implemented 13 emergency lending and liquidity facilities under its emergency lending
authorities and undertook supervisory and regulatory actions to support the flow of credit to households, businesses,
See Board of Governors of the Federal Reserve System (2023), "Coronavirus Disease 2019
and local governments.
(COVID-19): Funding, Credit, Liquidity, and Loan Facilities," webpage,
https://www.federalreserve.gov/fundingcredit-liquidity-and-loan-facilities.htm; and Board of Governors of the Federal Reserve System (2023),
"Coronavirus Disease 2019 (COVID-19): Supervisory and Regulatory Actions in Response to COVID-19,"
webpage, https://www.federalreserve.gov/supervisory-regulatory-action-response-covid-19.htm.
10
The March 15, 2020, FOMC statement is available on the Board's website at
https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm (quoted text in paragraph 2).
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Committee's assessments of maximum employment and inflation has risen to 2 percent and is on
track to moderately exceed 2 percent for some time."11 In its December 2020 post-meeting
statement, the FOMC added forward guidance regarding its asset purchases by noting that it
expected that the current pace of asset purchases would continue until "substantial further
progress has been made toward the Committee's maximum employment and price stability
goals."12
This explicit outcome-based forward guidance, like the revised monetary policy
framework, was very focused on supporting the economy following the COVID-19 shock amid
the risks of persistently low inflation and disinflationary forces with structurally low interest
rates. The guidance was also quite restrictive in the criteria for slowing the pace of asset
purchases, especially since the FOMC would stop asset purchases before it would raise the
federal funds rate.13
One could argue the December forward guidance made it much more difficult for the
FOMC to react to new information suggesting that risks and uncertainties had evolved in
response to pandemic-related changes in the economy. Other uncertainties such as the accuracy
of real-time economic measurements also presented challenges, as did significant supply-side
disruptions and the uncertainty about the timing of progress toward their resolution, which I will
discuss next.
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The post-pandemic economy, the resurgence of inflation, and the rapid tightening in
monetary policy
In the early phases of the pandemic, fiscal authorities around the world implemented
support programs for labor markets and households and businesses.14 These generous policies,
combined with very accommodative monetary policies, bolstered private-sector and state and
local government balance sheets. In particular, they led to what has come to be known as
"excess
savings"-above-normal household savings from extraordinary levels of fiscal support
and a limited ability to freely spend it due to economic lockdowns, supply chain disruptions, and
other pandemic- and recession-related factors.
In 2021, novel medical treatments, reduced social distancing, and innovative business
approaches in adapting to the restrictive pandemic environment led to a sharp economic rebound.
Strong demand (supported by stimulative fiscal and monetary policies), a reduced labor supply
(due in part to early retirements, childcare responsibilities, and concerns about COVID-19), and
a mismatch between available jobs and workers all contributed to a very tight labor market. The
unusually rapid rebound in economic activity, pandemic-driven shift to consumer goods
spending, supply chain fragilities, and manufacturing component shortages led to crippling
bottlenecks for a number of industries. These supply and demand imbalances, likely amplified
by fiscal and monetary policies, led to a sharp rise in inflation over a period of just a few months.
By the second half of 2021, inflationary pressures intensified and became more broad-
based. Labor markets were extremely tight, though it was difficult to assess the true extent of
tightness, given the decrease in labor force participation and mixed data signals at the time,
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which all were later revised. Of the many difficult issues the Committee faced, one of the most
important was whether inflation would persist or would resolve as supply-side issues eventually
eased.
The September 2021 Summary of Economic Projections (SEP) showed the median
FOMC expectation for personal consumption expenditures (PCE) inflation of 4.2 percent at the
end of 2021, largely reflecting high inflation readings in the first half of 2021. But for year-end
15
2022, the median expectation was for PCE inflation to decline to 2.2 percent. Private-sector
forecasters expected higher inflation of 5.1 percent at year-end 2021 but also projected a slowing
to just over 2 percent by the end of 2022.16 With the benefit of hindsight, we now know that
most forecasters, ourselves included, vastly misjudged the persistence of inflation at that time,
with 5.9 percent PCE inflation for both 2021 and 2022. This example underscores the challenge
we faced in identifying which factors were driving inflation and how long those forces would
persist.
In the second half of 2021, it became clear that the FOMC's monetary policy stance was
too accommodative in the presence of growing inflationary pressures and that the Committee
needed to move toward a tighter policy stance. It seems likely to me that the experience of the
years leading up to the pandemic, when inflation was persistently low, made it hard for many to
foresee how quickly that situation could change. Of course, the inflation and labor data did not
accurately reflect the economic conditions prevailing at the time and were subsequently
the FOMC's forward guidance
substantially revised.17 Together, these factors, combined with
discussed earlier, contributed to a delay in the removal of monetary policy accommodation in
2021.
The shift in the Committee's forward guidance toward the end of 2021 and in early 2022
was effective in moving longer-dated interest rates higher and in tightening financial conditions,
even before the FOMC raised the federal funds rate.18 At our November 2021 meeting, we
announced that we would begin to slow the pace of purchases later that month. At the December
2021 meeting, we doubled the pace of tapering, which accelerated the end of purchases to the
following March. At the March 2022 FOMC meeting, the FOMC raised the target range for the
federal funds rate by 25 basis points. And in May, the FOMC announced its plan to reduce the
size of the Federal Reserve's securities
holdings-which then stood at around $8.5 trillion-
starting in June and at a pace much faster than in the previous episode of balance sheet
reduction.19 The FOMC also continued to increase the target range for the federal funds rate
over the course of 2022 at a pace much faster than in previous tightening cycles, as it became
clear that inflation was higher and more persistent than many forecasters had expected. By July
2023, the FOMC had increased the federal funds rate to 5-1/4 percentage points, and into
restrictive territory, where it has remained. And we have continued to reduce the size of our
securities holdings.
17
For example, both the August and September 2021 employment reports suggested much lower job growth than
did consensus forecasts, and these initial estimates were subsequently sizably increased. Similarly, total PCE
inflation for nearly all quarters in 2021 has been revised higher than initially reported. See the real-time data on the
Federal Reserve Bank of St. Louis's ALFRED
website at
https://alfred.stlouisfed.org/series/downloaddata?seid=PAYEMS (job growth) and
https://alfred.stlouisfed.org/series/downloaddata?seid=PCECTPI (PCE inflation).
18
See the November 2021 FOMC statement, available on the Board's website at
https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm.
19
See the May 2023 FOMC statement, available on the Board's website at
https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm.
The monetary policy experience during the pandemic highlights how difficult it can be to
assess the current state of the economy and to predict how it will evolve in the presence of major
supply- and demand-side shocks, possible structural changes in the economy, and real-time data
and measurement uncertainty. An important question I will be thinking about going forward is
how to make monetary policy decisions and communications more robust to these types of risks.
Separate tools for monetary policy and financial stability
We know that monetary policy transmission is most effective during periods of stable
financial conditions, and that financial stability risks, if realized, can affect the economic
outlook. While monetary policy and financial stability are connected, financial stability
vulnerabilities and risks are most appropriately addressed using macro- and micro-prudential
regulation and bank supervision. During periods of extreme financial stress, well-calibrated
lending and liquidity programs can be used to address such conditions. Of course, where risks
impact the outlook for economic activity, employment, and inflation, a monetary policy response
may also be required.
The Federal Reserve's use
of liquidity and lending programs during the early stages of
the pandemic demonstrated the effectiveness of emergency lending tools as backstops to support
market functioning and the flow of credit in times of stress.20 Lending programs are most
effective as backstops when loans are offered at a penalty rate and are of short duration. When
appropriately calibrated, they can help promote market functioning and the effective
but limit the Federal Reserve's overall footprint in financial
transmission of monetary policy
markets in the longer term. This experience also highlights the importance of clearly
distinguishing monetary policy actions from temporary central bank asset purchase programs
used to promote core financial market functioning, like those created to support Treasury
markets in the spring of 2020.21
More recently, the bank failures last spring highlight that responsive, efficient, and
effective bank supervision is a strong mitigant for financial system risks and vulnerabilities. The
failures revealed that shortcomings in bank supervision can heighten financial stability risks.
should be to address a bank's critical shortcomings in a timely
The primary focus of supervision
way.22 To effectively support financial stability, bank supervision cannot simply rely on
pinpointing compliance issues, failed processes, or rule violations. It must go further to examine
a bank's risk
exposures, including anticipating how the evolving economic environment may
influence a bank's financial condition and its assessment of
risks. If the supervisory process fails
to identify and escalate critical risks, or to hold management accountable for known deficiencies,
like excess interest rate risk and disproportionately large levels of uninsured deposits, this raises
the potential for safety and soundness concerns.
Last year's bank stress the Fed's
also revealed that bank liquidity and payments tools-
the Fed's
including discount window operations and FedWire®-should be available for
extended operating hours and prepared to provide support during times of stress. We should also
consider what further steps may be needed to ensure that banks have access to liquidity support.
In addition, we should encourage, but not mandate, the exercise of contingency funding plans
and testing capabilities, requiring bank management to ensure adequate plans are in place.23 But
there is a fine line between bank supervision and interfering in the decisions of bank
management. Some measure of risk is inherent and necessary in the business of banking.
While some changes to the regulatory framework may be appropriate to promote
financial stability, we should be cautious that these changes do not impair the long-term viability
of banks, especially mid-sized and smaller banks.24 In my view, regulatory reform can pose
significant financial stability risks, particularly if those regulatory changes fail to take sufficient
account of the incentive effects and potential consequences, like pushing activity into the more
opaque nonbank financial sector.25 Poorly calibrated regulatory actions can also negatively
affect economic activity and reduce the availability of credit by limiting the offering of other
financial products or services. These concerns are most acute when the reforms may be
inefficient or poorly targeted. As an example, policymakers should carefully consider whether
the significant capital increases included in the U.S. Basel III proposal meet this standard of
being efficient and appropriately targeted.26
What's Next for the Economy and Monetary Policy?
Looking ahead, the FOMC will continue to face a number of risks and uncertainties as it
seeks to return inflation to its 2 percent goal. It will be important to evaluate how these
23
See Michelle W. Bowman (2023), "Financial Stability in Uncertain Times," speech delivered at the Reinventing
Bretton Woods Committee and Policy Center for the New South Marrakech Economic Festival, Marrakech,
Morocco, October 11, https://www.federalreserve.gov/newsevents/speech/bowman20231011a.htm.
24
See Michelle W. Bowman (2024), "The Future of Banking," speech delivered at
the 157th Assembly for Bank
Directors, Southwestern Graduate School of Banking, Maui, Hawaii, February 2,
https://www.federalreserve.gov/newsevents/speech/bowman20240202a.htm.
25
See Bowman, "Financial Stability in Uncertain Times," in note [23].
26
See Michelle W. Bowman (2024), "The Path Forward for Bank Capital Reform," speech delivered at
Protect
Main Street, sponsored by the Center for Capital Markets at the U.S. Chamber of Commerce, Washington (virtual),
January 17, https://www.federalreserve.gov/newsevents/speech/bowman20240117a.htm.
uncertainties and risks affect our monetary policy decisions going forward. As this audience
knows, members of the FOMC consult a range of models that consider several scenarios and
their potential economic outcomes using different benchmark monetary policy rules.27 This type
of analysis can provide helpful input in informing my own views on the appropriate path of
monetary policy. Given the importance of transparency, it is also necessary that our
communications explain not only how the economic outlook affects our monetary policy
often referred to as the FOMC's "reaction function,"
decisions, but also how the risks and
uncertainties surrounding the economic outlook matter for those decisions.
With that in mind, I will conclude my remarks with my own views on the near-term
economic outlook, including some prominent risks and uncertainties, and the implications for
monetary policy.
At our most recent FOMC meeting, I supported keeping the target range for the federal
funds rate at 5-1/4 to 5-1/2 percent and continuing to reduce our securities holdings. At its
current setting, our monetary policy stance is restrictive and appears to be appropriately
calibrated to reduce inflationary pressures. We have seen significant progress on lowering
inflation over the past year while economic activity and the labor market have remained strong.
Consumer services spending has shown continued strength through February, and payroll
employment increased at a very strong pace in the first quarter.
However, most employment gains over the past year have been in part-time employment,
and some of the recent strength in job gains may reflect stronger labor supply due to increased
immigration. The 12-month readings of total and core PCE inflation through February printed at
2.5 and 2.8 percent, respectively, much lower than a year ago. However, with the annualized
3-month PCE inflation readings moving well-above the 12-month measures in February, I expect
further progress in bringing inflation down to 2 percent will be slower this year.
Still, my baseline outlook continues to be that inflation will decline further with the
policy rate held steady at its current level, and that the labor market will remain strong but with
labor demand and supply gradually rebalancing as the number of job openings relative to
unemployed workers declines. And should the incoming data continue to indicate that inflation
is moving sustainably toward our 2 percent goal, it will eventually become appropriate to
gradually lower the federal funds rate to prevent monetary policy from becoming overly
restrictive. However, we are still not yet at the point where it is appropriate to lower the policy
rate, and I continue to see a number of upside risks to inflation.
First, much of the progress on inflation last year was due to supply-side improvements,
including easing of supply chain constraints; increases in the number of available workers, due in
part to immigration; and lower energy prices. It is unclear whether further supply-side
improvements will continue to lower inflation. For example, the rebound in labor productivity
last year may have reflected an unwinding of temporary pandemic-related labor market
dynamics, such as a slowing in the high levels of employee turnover during that time. Therefore,
if wage gains remain elevated going forward, these effects may no longer contribute to lower
price inflation in the future.
Geopolitical developments could also pose upside risks to inflation, including the risk of
spillovers from geopolitical conflicts and the extent to which food and energy markets and
supply chains remain exposed to these influences.
Another upside inflation risk I see is from additional fiscal stimulus or a higher spend-out
rate from existing and new appropriations. Although some of the recent policies may increase
productive capacity in the medium term, they may add to inflationary pressures by boosting
aggregate demand.
I also see upside risks to housing services inflation. Given the current low inventory of
available and affordable housing, the inflow of new immigrants to certain regions could result in
upward pressure on rents, as additional housing supply may take time to materialize. There is
also a risk that continued labor market tightness and continued strong services demand could
lead to persistently higher core services inflation. Inflation readings over the past two months
suggest progress may be uneven or slower going forward, especially for core services.
Finally, there is uncertainty regarding whether the federal funds rate will need to remain
at a higher level than before the pandemic in order to effectively foster low and stable inflation
and support full employment. In my view, given potential structural changes in the economy,
like higher investment demand relative to available savings, it is quite possible that the level of
the federal funds rate consistent with low and stable inflation will be higher than before the
pandemic. If that is the case, fewer rate cuts will eventually be appropriate to return our
monetary policy stance to a neutral level. In the most recent SEP, some FOMC participants
indicated that they now see fewer rate cuts over 2024 and over the next two years than in
December. Some also included a higher longer-run level of the federal funds rate than in the
past.28
While it is not my baseline outlook, I continue to see the risk that at a future meeting we
may need to increase the policy rate further should progress on inflation stall or even reverse.
Given the risks and uncertainties regarding my economic outlook, I will continue to watch the
data closely as I assess the appropriate path of monetary policy, and I will remain cautious in my
approach to considering future changes in the stance of policy. Reducing our policy rate too
soon or too quickly could result in a rebound in inflation, requiring further future policy rate
increases to return inflation to 2 percent over the longer run.
Closing Thoughts
To conclude, the experience over the past five years highlights the enduring challenge of
setting forward-looking monetary policy amid a wide and evolving range of risks and
uncertainties. Taking into account this experience and the lessons I have learned over my tenure
on the FOMC, an important question I will be considering is how to make monetary policy
strategy and its related communications durable to a wide range of possible shocks and changes
in the macroeconomy. We will continue to learn about the post-pandemic economy, and, if
history is any guide, new shocks to and changes in the economy will eventually and inevitably
occur. While the future is full of risks and uncertainties, the FOMC's mandate of fostering price
stability and maximum employment remains very clear. Restoring price stability is essential for
achieving maximum employment over the longer run.
Thank you again for the opportunity to speak with you today. I look forward to our
conversation.