worsen. • moreover, a perceived weakening of the international community ’ s commitment to voluntary, market - oriented approaches and its support for honoring contractual commitments would likely create deep distrust, making it harder to encourage cooperation between debtors and creditors in ultimately resolving the crisis. • an overly quick recourse to payment suspensions also risks discouraging precisely the types of flows that we should wish to encourage, that is, longer maturities with better risk sharing characteristics, such as long - term bonds and equities. in a crisis, the hottest money leaves first — by definition. it seems counterproductive to seek to penalize those who stay. • finally, i would suggest that preemptive attempts to " freeze markets " also undermine market discipline of and ownership by the local authorities. – increases and decreases in financial flows, and the fluctuations in pricing that naturally accompany positive or negative trends in policies and economic and financial performance are a reflection of, and act as a natural brake on the development of imbalances. – but an assertion of control by international community, by preemptively calling a time out, risks diverting attention from the policies of the local authorities. as a result, denial and delay, aggravating factors in almost every crisis, may well continue and be exacerbated. and then, as a practical matter, once market processes have been stopped, how and when do you get things started again, particularly if needed corrective policies still have not been convincingly and transparently implemented? – to sum up, i believe the one size fits all disposition inherent in the standstills approach risks making situations much worse than they need to be. the only thing that strikes me as predictable under such an approach would be that market access would be harmed across the board. just as bail - outs may encourage too much risk taking, efforts to orchestrate preemptive bail - ins may encourage too little. a minimalist approach to payment suspensions this is not to say that payment suspensions always can and should be avoided, or that ever - larger bailouts are desirable or feasible. i would note that in december 1997, we at the new york fed played an important role in encouraging creditors from around the world to begin working with the korean authorities to find a solution that complemented the courageous policy actions of the then new government. this effort, which began with commitments to maintain inter - bank credit lines and culminated in a refinancing of these claims, was

we tend to focus a lot on data such as the inflation rate, employment, unemployment, and gdp growth. but, that ’ s not all — we also collect and analyze enormous amounts of other information to help us assess the state of the economy and the economic outlook. 1 so, what does all that information tell us about the current economic outlook? after surging ahead last year, the u. s. economy appears now to be growing at a more moderate pace. i expect gdp growth to be around 2 - 1 / 4 percent this year, moderately above my estimate of the long - run sustainable growth rate for the economy. in my past speeches, i often mentioned the fact that we ’ re nearing the longest expansion on record. well, as of this month, i can finally say that we ’ ve reached that milestone. the economy has been growing for 121 months — a little over 10 years. 1 / 3 bis central bankers'speeches while this is undoubtedly good news, the headline data mask a more nuanced economic picture. consumer spending has been an important driver of growth, and the most recent readings have been very positive. however, other signs point to slowing growth. in particular, the latest indicators suggest that business fixed investment has softened and that manufacturing production is in decline. and the outlook for growth outside the united states has dimmed, which will weigh on demand for u. s. products. this mixed picture is mirrored in the employment data. on one hand, the unemployment rate, which stands at 3. 7 percent, is near the lowest we ’ ve seen in 50 years. on the other, job growth has slowed this year relative to last year ’ s pace. finally, turning to prices, the latest data show that underlying inflation is 1. 6 percent, below our 2 percent goal. the major challenge with inflation that ’ s persistently lower than 2 percent is that low inflation feeds into inflation expectations. if inflation stays too low, people will start to expect it to stay that way, creating a vicious cycle, pushing inflation further down over the longer term, and making it harder to achieve our goals through monetary policy. the second district all of these numbers tell the story of the u. s. economy at the macro level, but they ’ re not always reflected in the real experiences of americans across the country. i referred at the beginning of this speech to the second district — which includes new york state, parts of new jersey and connecticut, puerto rico, and the