could prompt me to reassess the appropriate path of policy. review the federal reserve is conducting a review of our monetary policy strategy, tools, and communications to make sure we are well positioned to advance our statutory goals of maximum employment and price stability. 3 three key features of today ’ s new normal call for a reassessment of our monetary policy strategy : the neutral rate is very information about the review of monetary policy strategy, tools, and communications is available on the board ’ s website at https : / / www. federalreserve. gov / monetarypolicy / review - of - monetary - policy - strategytools - and - communications. htm. also see richard h. clarida ( 2019 ), “ the federal reserve ’ s review of its monetary policy strategy, tools, and communication practices, ” speech delivered at the 2019 u. s. monetary policy forum, sponsored by the initiative on global markets at the university of chicago booth school of business, new york, february 22, https : / / www. federalreserve. gov / newsevents / speech / clarida20190222a. htm ; and jerome h. powell ( 2019 ), “ monetary policy : normalization and the road ahead, ” speech delivered at the 2019 siepr economic summit, stanford institute of economic policy research, stanford, calif., march 8, https : / / www. federalreserve. gov / newsevents / speech / powell20190308a. htm. - 4low here and abroad, trend inflation is running below target, and the sensitivity of price inflation to resource utilization is very low. 4 first, trend inflation is below target. 5 underlying trend inflation appears to be running a few tenths below the committee ’ s symmetric 2 percent objective, according to various statistical filters. this raises the risk that households and businesses could come to expect inflation to run persistently below our target and change their behavior in a way that reinforces that expectation. indeed, with inflation having fallen short of 2 percent for most of the past seven years, inflation expectations may have declined, as suggested by some survey - based measures of long - run inflation expectations and by market - based measures of inflation compensation. second, the sensitivity of price inflation to resource utilization is very low. this is what economists mean when they say that the phillips curve is flat. a flat phillips curve has the important advantage of allowing employment

monetary - financing prohibition. yet, for well - known political reasons, the maastricht treaty stopped short of assigning responsibility for fiscal and economic policies to the central level. member states retained responsibility for these policy fields. at the same time, the treaty called on governments to treat such policies as a matter of common concern. it also entrusted the task of ensuring appropriate coordination of national policies to the european commission. i would like to thank maximilian freier for his assistance in preparing this remark. all views expressed herein remain mine. delors, jacques ( 1989 ), report on economic and monetary union in the european community, committee for the study of economic and monetary union, april. bis central bankers ’ speeches in the monetary field, a new, fully independent body was created, namely the european central bank. the responsibility for the conduct of euro area monetary policy was delegated to the ecb ’ s governing council. at the same time the independence of national central banks was strengthened considerably in many countries. the institutional set - up for monetary policy was thus starkly different from that for fiscal and economic policies. the crisis exposed the flaws in the set - up governing fiscal and economic policies. over the past six years there have been numerous initiatives to rethink the fiscal and economic governance framework. the political reality is that there is no appetite for moving towards a “ united states of europe ”, as foreseen by victor hugo and winston churchill, and envisaged by jean monnet at the beginning of the 1950s, when the precursor of the european commission was created ( the high authority of the european coal and steel community ). 3 however, there is a common understanding that euro area member states need to further integrate their fiscal and economic policies if the euro area and its member countries are to prosper in the future. this point is made forcefully in the five presidents ’ report which was published in june last year. 4 the five presidents ’ report proposed a multi - stage process towards genuine economic and monetary union ( emu ). the first step is to revive economic convergence among member states. this requires member states to put their public finances on a sound footing. it also requires member states to undertake the necessary structural reforms to strengthen their growth potential and resilience to shocks. making determined progress in these fields is an economic and political precondition for moving on to the second stage, for which a joint shockabsorption mechanism could be envisaged. 5 in this respect,