the 5 - 1 / 2 percent reading we saw last year. labor markets : returning to balance i'll now turn to the other side of our mandate, maximum employment. the overall labor market is strong, as seen in the unemployment rate of 3. 8 percent, which equals my estimate of the unemployment rate expected to prevail in the economy in the longer run. indeed, the issue we have been facing is that labor demand exceeds available supply, and this imbalance has contributed to high inflation, especially in the services sector. there are numerous signs that labor market imbalances are diminishing. the rate of people quitting jobs and the rate of new people being hired have moved back to prepandemic levels. surveys of employers and households both show a return to pre - 2 / 4 bis - central bankers'speeches pandemic conditions. the number of job openings, while still high by historical standards, has declined toward more normal levels. and wage growth has slowed considerably from earlier peaks. both lower demand and improved supply have helped restore balance to the labor market. labor supply has rebounded through increases in labor force participation and immigration. but there are limits to how much further supply will increase going forward, and further reductions in demand are needed to bring balance to the labor market. monetary policy and the economic outlook against this backdrop of still - high inflation, the fomc has set a restrictive stance of monetary policy to restore balance in the economy and bring inflation down to 2 percent over time. last week, the fomc kept the target range for the federal funds rate unchanged at 5 - 1 / 4 to 5 - 1 / 2 percent. 7 our monetary policy actions are having the intended effects, but will take time to fully work their way through the economy and inflation. as monetary policy continues to bring demand into better balance with supply, i expect gdp growth to slow next year to about 1 - 1 / 4 percent and the unemployment rate to rise modestly to a little over 4 percent. i foresee inflation of around 3 - 1 / 4 percent for this year as a whole, declining to around 2 - 1 / 2 percent next year, before closing in on 2 percent in 2025. my current assessment is that we are at, or near, the peak level of the target range for the federal funds rate. i expect we will need to maintain a restrictive stance of monetary policy for some time to fully restore balance to demand and supply and bring inflation back to

for example, our research suggests that higher student debt and delinquencies reduce household formation and depress homeownership. but there are many important questions still left unanswered. what is the relationship between the amount and type of educational investment that people make and their outcomes? what attributes are associated with borrowers who are more successful at payback time? measuring progress on student debt repayment. bis central bankers ’ speeches repaying their student loans? are there particular types of degrees that are associated with better performance with respect to student debt repayment or with better living standards earlier in life? what are the best interventions to help borrowers avoid the consequences of delinquency and default, and to limit any default costs to taxpayers? do borrowers who use programs like income - based repayment eventually succeed in paying off their debts? how do income - based repayment programs affect important decisions such as labor supply, consumption and household formation? these are important questions for the nation, as the human capital of our citizens is far and away our most important asset, and student loans are an important mechanism for financing needed investments in that asset. but it is very hard to answer these questions with existing data. we need to link information on borrower decisions about the kind and amount of education they receive to long - run outcomes for them and for the overall economy. so i commend to you the work before you – finding new ways to get the information that policymakers need to answer important questions about how we finance higher education. i look forward to your insights and recommendations. bis central bankers ’ speeches