somewhat more in 2015. the private sector of the economy should continue to heal, while the amount of fiscal drag based on the corelogic home price index including distressed sales. bis central bankers ’ speeches should subside. despite near - term concerns, growth prospects among our major trading partners will improve further next year. this combination of events is likely to create an environment in which business investment spending will strengthen. as growth picks up, i expect to see more substantial improvement in labor market conditions and a gradual updrift in inflation back towards the fomc ’ s target rate. however, the notion that the economy will grow more swiftly remains a forecast rather than a reality at this point. as is always the case, there is substantial uncertainty surrounding this forecast. moreover, there is always the possibility of some unforeseen shock. thus, we will continue to monitor u. s. and global economic conditions very carefully and will adjust our views on the likely path for growth, inflation and the unemployment rate accordingly. regional economic conditions let me turn now to the regional economy. a year has passed since superstorm sandy devastated the tri - state region. and even today, many of the hardest - hit places are still struggling to recover and rebuild from the storm. in fact, reminders of the storm ’ s damage remain visible in neighborhoods across brooklyn, queens and staten island, as well as along the coasts of long island and new jersey. on a more encouraging note, however, the broader regional economy has proven to be remarkably resilient. after a brief dip following the storm, the regional economy quickly rebounded and has continued to add jobs at a reasonably good pace. moreover, the region ’ s housing markets have continued to show steady improvement throughout the year. to help monitor the performance of the regional economy more generally, the new york fed produces economic activity indexes for new york state, new york city and new jersey. based on these measures, new york city ’ s economy has continued to grow strongly throughout the year, and both new york state and new jersey have seen some pickup in growth in recent months. as a result, a growing number of places in the region have either recovered or are close to recovering the jobs that were lost during the great recession. more troubling, however, is that puerto rico ’ s economy remains exceptionally weak ; activity and employment on the island continue to decline. our economists will elaborate on these trends this morning. private for profit institutions in the higher education

the crisis, when the fed held one - third of its portfolio in treasury bills, and about twothirds of its holdings matured in less than three years. 16 a role for asset purchases at the zero lower bound as they digest the experience of the past decade, policymakers, academics, and market participants are engaged in an active dialogue on appropriate monetary policy strategies and the role of unconventional policy tools in future zero lower bound episodes. 17 amid widespread concerns of a secular decline in nominal interest rates, this is not just a theoretical discourse. the median of fomc participants ’ projections for the longer - run value of the nominal federal funds rate is currently 2¾ percent, leaving little room to ease the stance of policy through changes in overnight rates. as a result, the likelihood of a return to the zero lower bound is, in chair yellen ’ s words, “ uncomfortably high, even in the absence of a major financial or economic crisis. ” 18 against this backdrop, chair yellen has expressed her views on the fed ’ s monetary policy implementation tools. she suggests that whenever possible, influencing short - term interest rates should be the fed ’ s primary policy lever, but that enhanced forward rate guidance and asset purchases should be considered again if that conventional tool reaches its limit, as would be the case if a future economic downturn drove short - term rates back to the zero lower bound. this view is consistent with her 2016 jackson hole remarks, where she presented analysis making the case that the fed ’ s use of forward guidance and asset purchases could improve macroeconomic outcomes on average in zero lower bound episodes, and indicated that she expected these tools to remain “ important components ” of the fed ’ s policy toolkit. 19 the fomc itself has not made any formal decisions about the fed ’ s long - run monetary policy implementation framework. however, minutes from a november 2016 discussion about potential choices of policy rates, operating regimes, and balance sheet policies indicate that a number of policymakers viewed expansion of the balance sheet as an “ important tool ” to provide macroeconomic stimulus in situations in which overnight interest rates were at their effective lower bound. 20 this approach is consistent with the balance sheet reaction function described in the june addendum to the fomc ’ s policy normalization principles and plans. lessons learned of course, whether and under what circumstances the fomc would again activate large - scale asset purchases are ultimately decisions for future policymakers. but, to the extent they remain a possible