samchain/econo-pairs-v1 huggingface dataset:
Today, total employment is up 5 percent from pre-pandemic levels and is at a nine-year high, and the unemployment rate is at a record low. The recovery has been broad-based, but we've seen particular strength in certain industries like professional business services, transportation and warehousing, and manufacturing. Tourism rebounded significantly too, with hotel occupancy rates reaching above 75 percent. Soaring Inflation All in all, maximum employment has been achieved. But inflation remains unacceptably high, and we are far from the Fed's longer-run inflation goal of 2 percent. Since early last year, inflation has increased rapidly to levels many of you have not seen in your lifetimes. This experience is not unique to the United States; nearly all countries around the world are seeing rising costs, and central banks everywhere are working to contain them. The rise in inflation has been extraordinary. In December 2020, overall inflation, as measured by the 12-month percent change in the personal consumption expenditures (PCE) price index, was 1.3 percent. In May of this year, it was 6.3 percent. A significant portion of this sharp rise reflects global increases in food and energy prices. But, even excluding those costs, the "core" inflation rate has increased from 1.5 percent a year and a half ago to 4.7 percent today. It's more than just numbers. High inflation is incredibly harmful, especially to those that can least afford to shoulder the escalating costs of necessities like food, fuel, and housing.

The unemployment rate has been steady in the past few months near its historical low and was 3.6 percent in June. There are now far more job openings than people looking for work, and employers are still struggling to fill roles. The economy experienced a rapid recovery from the pandemic last year, but I expect growth to slow considerably this year as the waning effects of fiscal stimulus, less favorable financial conditions, and slower growth abroad all weigh on our economy. By continuing to use our site, you agree to our Terms of Use and Privacy Statement. You can learn more about how we use cookies by reviewing our Privacy Statement. Specifically, I currently expect real GDP growth in the United States to be below one percent this year, and then to rebound slightly  to around 1-1/2 percent next year. With overall growth slowing to below its trend level, I expect the unemployment rate to move up from its very low current level, reaching somewhat above 4 percent next year. Economic Conditions in Puerto Rico Similar to the mainland, employment in Puerto Rico has rebounded quickly and strongly. Before the pandemic, the economy was just showing signs of emerging from a decade-and-a-half-long economic slump, during which both the population and employment had fallen by about 16 percent. Then, in the spring of 2020, employment tumbled another 14 percent, a far steeper decline than after Hurricane Maria in 2017. The subsequent turnaround has been astounding.
To be clear, this is not going against the wish of Parliament in establishing these structures; rather, it is designed to reinforce that wish by making the pieces work closely together. And, it also emphasises that the Bank of England is a public policy institution with the overarching objective and responsibility of serving the public good. Interestingly, the language that we found to describe this public good comes from the Bank’s original Charter of 1694, though I should recognise that the detail of the description of what constituted the public good in 1694 is rather different from the one we have today. The key thing about a public good is that no individual or group of individuals can be excluded from using or consuming it, and use by one individual does not reduce the availability to others. Fresh air is a public good, and so is the stability of the economy. In our world, history shows that it takes a crisis to provide a decisive impetus to create and maintain the emphasis on the public good. Thus, stable low inflation – monetary stability – received its decisive impetus in many countries, including the UK from the painful experience of high inflation, most notably in the 1970’s. Out of that came a broad consensus on a central idea – low inflation is a necessary condition for stable economic growth and its resulting benefits for well-being.

There is another lesson that I draw from this history, namely that there must be some difficult impediments to achieving the goal of institutional stability in financial regulation. To start with, achieving consistency and clarity in identifying the objective of regulation has been a problem in the past. The new approach anchors the PRA’s primary objectives of the safety and soundness of firms and the protection of insurance policyholders in the broader goal of the stability of the financial system. This very clearly ties together micro and macro-prudential regulation, whose objectives are consistent. And, we now have a secondary objective around the competition implications of our actions, which I welcome. Just under two weeks ago we announced changes to the Bank of England’s strategy and structure. In doing so, we adopted a single mission, namely to promote the public good through achieving and maintaining financial and monetary stability. This single mission is much more than just the speak of management, it is a clear change intended to promote the integration of the Bank of England’s objectives of monetary and financial stability. This integration of objectives into a single mission represents a very deliberate decision that the Bank of England should not be organised as a series of silos defined by our different statutory objectives and by the structure of policy making committees given to us in legislation.
China Finance: The recent revised GDP data indicates that China has become the third largest economy in the world. What opportunities and challenges do you see posed by the increased role of China in the world?" Trichet: The progress of the Chinese economy is absolutely striking. I have myself the memory of the city of Peking at the beginning of the 80’s. And I can measure how difficult it is for today’s visitors to imagine what Peking or any other Chinese big city looked like only 25 years ago. This remarkable success of the Chinese society and the Chinese economy is profoundly changing China as well as it contributes to a profound change of the world. China is called to take all the global responsibilities which are the counterpart of its economic and financial global influence. BIS Review 18/2009  3

BIS Review 2/2006  3  This leaves us with no simple or clear doctrine for the role of asset prices in monetary policy regimes. Asset prices probably matter more than they once did, but what that means for monetary policy necessarily depends on the circumstances. Perhaps it makes sense to conclude with the more general observation that changes in the size of balance sheets increase the importance of sustaining the credibility of monetary policy, because they increase the costs of a loss of credibility or a negative shock to credibility. We live with considerable uncertainty about the sustainability of the pattern of relatively low risk premia and reduction in the cost of insurance against future macroeconomic and financial volatility. That uncertainty necessarily adds to the normally substantial degree of uncertainty we face in making monetary policy judgments. All these factors strengthen the case for being open about what we do not know. And it reinforces the case for preserving confidence in our commitment to keep underlying inflation low over time, and for retaining the capacity to respond with flexibility to the challenges we face in this uncertain world. Thank you. 4  BIS Review 2/2006
By contrast, the role of non-banks such as investment funds, pension funds and insurance companies may increase since they are in a better position to offer the products that are in higher demand. As a matter of fact, in recent years non-banks have been increasing their share in the financial system as a result of different factors and not only due to demographic changes. In any case, the financial sector will need to adapt to these changes, offering new products that cater for the needs of the population. It is worth mentioning that these developments are taking place against a background of low profitability in the banking sectors in many jurisdictions including the euro area, Japan, the United Kingdom and Switzerland. In many cases, the ROE of the banking sector is not only well below levels seen before the crisis but it is also lower than banks’ cost of equity. 14  Ageing can also have consequences for the stability of financial systems. A permanent lower level of risk-free interest rates might foster a search for yield by financial intermediaries. On the one hand, this process would leave financial intermediaries and the final investors more exposed to shocks. On the other hand, the valuation of some assets might become too stretched, increasing the risk of sharp adjustments in the future. Against a background of ultra-low interest rates, in recent years some financial intermediaries, such as investment funds, have increased the average maturity of their bond portfolios and their exposure to exchange rate risks.

Allow me now to address the degree of integration of the European banking sector. I have already indicated that the Banking Union has met one of its key objectives: to contribute to  5  See FT https://www.ft.com/content/82624c98-ff14-11e9-a530-16c6c29e70ca  6/10  weakening the link between bank risk and sovereign risk. But, additionally, when it was launched it was assumed that the Union could lead to a more integrated banking system. Today, however, the greater degree of institutional integration has not been accompanied by an increase in cross-border activity in the sector. The share of domestically owned banks in national banking systems remains high, at approximately 83%, the same level as in 2014, before the launch of the SSM.6 We should thus acknowledge that banking consolidation across jurisdictions remains minimal, and most firms and individuals in the euro area continue to depend on their national financial systems. Economic agents can appreciate daily the benefits from the single market and the euro. Yet regrettably, no tangible benefits can currently be discerned to stem from the Banking Union in terms of greater competition in prices and financial services. The truth is that European citizens and companies continue to face obstacles to investing in European markets. National pensioners and investors have access to different investment products and their rights differ as a result of different local insolvency laws. Lastly, I pointed out earlier that the banking sector continues to be mainly national, and it remains closely linked to the country’s sovereign risk.
All of these seemingly low risk activities appear to deliver above-average returns on equity, ranging from a high of around 50% on treasury and asset management services to around 20%+ on retail financial services. One potential explanation of these high returns is that the risk associated with these activities, and hence the capital allocated to them, may be under-estimated by banks’ models. Another is that the demand for these services is highly price inelastic – for example, because of information imperfections on the part of end-users of these services. Anecdotally, there is certainly evidence of a high degree of stickiness in the demand for retail financial services. Statistically, an adult is more likely to leave their spouse than their bank. In a UK context, there have been a number of studies by the authorities on the degree of competition within retail financial services, including by the Competition Commission (2005) and the Office of Fair Trading (OFT) (2008). The OFT market study found a very low rate of switching of personal current accounts between banks – fewer than 6% per year. By itself, however, this low switching rate does not necessarily imply a market failure. For example, it could be the result of a reputational equilibrium in which money gravitates to banks whose brand name is recognised and respected. A more obvious market friction in the UK retail financial services market derives from “free in credit” banking.

For this reason, it is important that a detailed strategy be designed as soon as possible for achieving a gradual and sustained reduction in fiscal imbalances, to be implemented when the pandemic has been overcome. This strategy should also place the emphasis on improving the quality of public finances, from the viewpoint of their composition, in terms of the various types of revenues and expenditures, to ensure that it is geared towards boosting long-term economic growth. And it is important to stress that although, as I have already mentioned, this fiscal consolidation strategy should only be implemented when the economic effects of the crisis have been overcome, the design and communication of its basic aspects should be undertaken without delay, as this would boost economic policy credibility and, in consequence, the expansionary effects of the current fiscal measures. The size of the challenge is so large that successfully addressing fiscal consolidation will require a comprehensive review of the tax system and of all expenditure items. Also, this objective will be facilitated by the implementation of the structural reforms that I spoke of earlier. 4 Conclusion I should like to conclude with a reflection which I think needs to be clarified, especially in this seat of popular sovereignty. In the last part of my address, I have referred to a set of economic policy actions that involve changes (some of them substantial) to the institutional 10  See J. Pijoan-Mas and P. Roldán-Blanco (2020), Dual Labour Markets and the Equilibrium Distribution of Firms, mimeo.
Furthermore, relative prices change more than they did before, but monetary policy cannot affect them except in the short term. Sometimes it can be difficult to distinguish between such relative price changes and a general rise in the price 3  level, which depends in the long run on monetary policy. In addition to this, it can often be difficult to determine at any given time which changes are temporary and could possibly be mitigated through economic policy and which ones are more permanent and nothing much can be done about, at least through monetary policy. These are exactly the conditions we are experiencing at present. There are clear indications that the equilibrium real exchange rate has risen with improved terms of trade, increased national saving, and a vastly improved external position. In addition, there are indications that equilibrium interest rates have fallen since before the crisis, and they have probably fallen still further as monetary policy has grown more credible and inflation expectations have been anchored more firmly at the target. In both instances, the question of how much remains unanswered. As far as the exchange rate is concerned, conventional measuring methods do not indicate that the real exchange rate is clearly above its equilibrium level. This is supported by the Bank’s analysis, to be published next week in Financial Stability, which shows that 85% of inflows into the foreign exchange market in 2016 were attributable to the current account surplus and transactions between residents.

Near-term developments in nominal and real interest rate will be determined by economic developments and the inflation outlook. The MPC attempts at all times to keep interest rates no higher than they must be in order to hold inflation at target over the medium term. Based on these considerations and assuming that there are no major unforeseen changes in the current situation, the scope for further reductions in nominal interest rates could develop in the near future. The Government has initiated a review of the monetary policy framework. The Central Bank of Iceland supports this process and will participate actively in it. It is important both to take into account what monetary policy can achieve and to acknowledge what it cannot do. It is also important to bear in mind that significant changes have already been made in monetary policy conduct since the pre-crisis period, as I have discussed in detail in this setting in the past. Nevertheless, various additional changes need to be considered, and the Central Bank cannot change the most important element of the equation: that monetary policy, fiscal policy, other economic policy, and decisions taken in the labour market must pull together to the maximum extent possible. I would also like to emphasise the importance of preserving the monetary policy achievements that I have discussed. 6  Honoured guests: The Central Bank’s foreign exchange reserves totalled over 810 b.kr. or 7½ billion US dollars, at the end of February. This is equivalent to about one-third of GDP.
One usually says that the central banks are the lender of last resort. The need to have a “liquidity emergency service” is based on normal banks’ operations being characterised by borrowing money at short maturities and then lending this money at longer maturities. This is the so-called maturity transformation that exposes the banks to liquidity risk. Sometimes the banks’ access to funding may suddenly decline, without it being possible – or socio-economically desirable – for them to reduce their lending at the same pace. This does not usually lead to any problems. A bank that needs more funding can normally borrow from other banks that have a surplus (or it can issue its own bonds). However, sometimes the liquidity problems are so serious that the banks cannot manage them on their own. If, for instance, confidence in a bank were weakened so that depositors feared they would not be able to get their money back, the bank might be subjected to a bank run that it is unable to manage on its own. There is also a risk that problems in one bank may spread to other banks, as the banks are interconnected. Even banks that do not have any problems may be affected as a result of rumours spreading.

In view of the requirement for growth of Islamic financial transactions to be linked to real economic sectors, salient issues on stronger corporate governance and more efficient human resource management are discussed in a pre-concluding chapter of the book. Renowned industry practitioners and academicians have contributed to the book, providing deep insights, perspectives and views that are supported by practical experiences which will be invaluable to those who wish to understand the critical regulatory issues in Islamic finance. Contributions by the two respected co-editors who have extensive knowledge on the subject and are internationally recognised for their academic publications on Islamic finance, completes the book as an indispensable reference for all. It is hoped that in addressing the implications of the recent global financial crisis on the regulation of Islamic financial services, this book will provide further clarity and understanding on the multi-dimensional goals of policymakers and regulators in ensuring that the resilience of the Islamic financial system and its core tennets are aligned with the evolving global regulatory developments. Let me take this opportunity to congratulate the two co-editors for their invaluable contribution in enriching the body of authoritative information on the regulation of Islamic finance. Thank you. 2  BIS central bankers’ speeches
The FOMC has said that it will keep short term interest rates at exceptionally low levels for an extended period of time. The Fed also retains large amounts of mortgage-backed bonds acquired in order to support the housing market and help bring down mortgage and other long-term interest rates to the historically low rates in place today. The FOMC and the Chairman have stated their commitment to take further actions to bring interest rates down further should economic conditions warrant. In a recent speech, I said that both the current levels of unemployment and inflation and the timeframe over which they are likely to return to levels consistent with our mandate are unacceptable. I said that I thought further Fed action was likely to be warranted unless the economic outlook were to evolve in a way that made me more confident we would see better outcomes for both employment and inflation before too long. Turning to regulatory policy, the biggest lesson of the financial crisis is that severe financial disruptions can inflict very large and persistent costs on people’s lives and jobs. Over the past year, with Fed leadership and support, important new regulatory initiatives have been advanced to create a global financial system where the players cannot slide back into the risky “business as usual” that created this crisis. These include the recent agreement with international bank regulators (sometimes called “Basel III”) to impose stricter standards for globally active banks and the considerable regulatory changes embodied in the Dodd-Frank Act.

For these assessments, we augment input from our research departments with critical information about local economic conditions supplied by our boards of directors, regional advisory councils and conversations with local stakeholders. You may know that one of my councils, the Upstate New York Regional Advisory Board, is designed specifically to provide me with timely information from this area. In this way, decisions by the FOMC are continually informed by views gathered from all parts of the country, including Upstate New York. One thing that makes my job even more interesting is that New York has some roles unique within the Fed. Let me tell you about some of them. We, alone, implement monetary policy. At the direction of the FOMC, we buy and sell Treasury securities. We are also the eyes and ears of the Fed on Wall Street, and we supervise many of the largest financial institutions in  BIS Review 141/2010  1  the country. We operate Fedwire® – the conduit for large money transfers between banks. And, we provide banking services to the U.S. Treasury, and central banks and governments from around the world. Finally, I must mention that the New York Fed’s district could be the most diverse in the System: ranging from the urban density of Manhattan to the forested sparseness of the northern Adirondacks, to the Caribbean islands of Puerto Rico and the Virgin Islands. All in all, there is a lot to keep my colleagues and me quite busy – even in normal times.