. and, even though the omicron wave is posing new obstacles, some supply issues are starting to work themselves out as the economy adjusts to the changing circumstances. just as the pandemic has followed its own script, i anticipate that the dynamics of inflation will also be different than previous cycles. with growth slowing and supply constraints gradually being resolved, i expect inflation to drop to around 2 - 1 / 2 percent this year, much closer to the fomc ’ s 2 percent longer - run goal. and looking further ahead, i expect inflation to get close to 2 percent in 2023. policy actions these developments in the labor market and for inflation inform the federal reserve ’ s policy response and recent actions. in its december 2021 statement, the fomc said that it would keep the target range for the federal funds rate at 0 to ¼ percent. 2 with inflation having exceeded 2 percent for some time, the fomc said it expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the fomc ’ s assessments of maximum employment. because of inflation developments and the notable improvement in the labor market, the fomc also decided to reduce the monthly pace of its net asset purchases. with our actions, we have started the process of adjusting the stance of monetary policy away from one of providing maximum support for the economy. this movement in policy reflects the gains the economy has made since the beginning of the pandemic and the evolution of the risks to the achievement of our goals. the next step in reducing monetary accommodation to the economy will be to gradually bring the target range for the federal funds rate from its current very - low level back to more normal levels. given the clear signs of a very strong labor market, we are approaching a decision to get that process underway. the timing of such decisions will be based on a careful consideration of a wide range of data and information, with a clear eye on our maximum employment and price stability goals. conclusion as we turn a page on the new year, it ’ s clear that we have not yet reached the end of this pandemic story. but despite the challenges, i am hopeful of a continued strong recovery this year. 1 gianluca benigno, julian di giovanni, jan j. j. groen, and adam i. noble, a new barometer of global supply chain pressures, federal reserve bank of new york liberty street economics, january 4, 2022

? in particular, how will we effectively train and mentor junior employees? finally, current events demand that we be honest about the times we have not lived up to our own standards of equal justice under law and equal opportunity in our economy. each of us needs to question our role in allowing systemic racism to persist. our colleagues, stakeholders, and the public in general will ask how we will do better in the near term and the long term — and then they will hold us to it. thank you for your kind attention, and thank you again to the union of arab banks for hosting this discussion. 1 lisa kraidin, thomas m. noone, sean o'malley, and summer intern gabe rosen contributed to the preparation of these remarks. 2 board of governors, " federal reserve announces extensive new measures to support the economy, " press release ( mar. 23, 2020 ). 3 federal open market committee statement ( mar. 15, 2020 ). 4 see supra n. 2. see also nicola cetorelli, linda s. goldberg, and fabiola ravazzolo, " how fed swap lines supported u. s. corporate credit market amid covid - 19 strains, " liberty street economics ( june 12, 2020 ). 5 " agencies encourage financial institutions to meet financial needs of customers and members affected by coronavirus, " joint press release ( mar. 9, 2020 ). 6 " federal banking agencies provide banks additional flexibility to support households and businesses, " joint press release ( mar. 17, 2020 ). 7 " federal banking agencies encourage banks to use federal reserve discount window, " joint press release ( mar. 16, 2020 ). 8 12 u. s. c. § 343. 9 information of the primary dealer credit facility ( " pdcf " ) is available on the board of governors'public website and the new york fed's public website. see also antoine martin and susan mclaughlin, " the primary dealer credit facility, " liberty street economics ( may 19, 2020 ). 10 information on the commercial paper funding facility ( " cpff " ) is available on the board of governors'public website and the new york fed's public website. see also nina boyarchenko, richard crump, and anna kovner, " the commercial paper funding facility, " liberty street economics ( may 15, 2020 ). 11 information on the money market mutual fund liquidity facility ( " mmlf " ) is available on the board of governors