projected to be no more than a half percentage point above the committee's 2 percent longer - run goal, and longer - term inflation expectations continue to be well anchored. " 9 of course, today's circumstances are much different from those we faced during most of the decade that followed the 2008 financial crisis. i will focus here on two features of 3 / 8 bis - central bankers'speeches our current environment that i see as especially relevant for assessing the role of explicit forward guidance as a monetary policy tool in the current conduct of monetary policy. the first is that with inflation unacceptably high and the resulting urgent need to remove monetary policy accommodation, the federal funds rate is no longer near zero. the committee can now indicate its intended stance of monetary policy through changes to the target range for the federal funds rate - its stated primary tool of monetary policy - rather than relying on more unconventional monetary policy tools, such as forward guidance and balance sheet policy, to serve as the main indicators of the stance of monetary policy. the second is that the outlook for inflation and economic activity is especially uncertain, with significant two - sided risks. gone are the days when the risks to the outlook were skewed to the downside, especially with respect to inflation. and two - sided risks to economic activity are also widely recognized by the public, with press reports of an overheating labor market often featured alongside discussions of high or rising recession risks. in our current environment, i view the benefits of providing explicit forward guidance as lower than they were in the years immediately after the 2008 crisis. given that the federal funds rate is now well above zero, the fomc can communicate changes in the stance of monetary policy through changes in the target range for the federal funds rate and not rely on explicit forward guidance as it did when the federal funds rate was at the effective lower bound. and i would argue that the costs and risks of providing explicit forward guidance are now higher than they were in the decade that followed the last financial crisis. for example, relative to current conditions, it was easier and less risky to provide explicit forward guidance back then ( especially guidance of the low - for - longer variety ). after all, back then, the economy was still weighed down by the after - effects of the 2008 financial crisis, and inflation was running persistently below our 2 percent target. let's contrast those conditions with the ones we face today. with uncertainty about the economic outlook unusually high today, the pre - 2000s

mr repse gives a short speech on monetary policy in latvia and exchange rate strategies speech given by mr einars repse, governor of the bank of latvia, at the ecb seminar on the accession process, held in helsinki on 11 november 1999. * * * ladies and gentlemen, accession to the european union ( eu ) is a strategic aim of latvia, and we see joining the european monetary union ( emu ) as an integral part of this process. we strongly hope that the european council will accept the commission ’ s recommendations and a decision will be made to commence accession negotiations with latvia in year 2000. the bank of latvia will be well prepared for these negotiations, as we have already established our status and policies with a perspective of future membership in the eu. the bank of latvia enjoys a high degree of independence, fully compatible with the requirements of the emu. price stability is clearly defined as the main objective of the bank of latvia, and its monetary policy instruments and procedures largely correspond to the monetary policy framework used within the european system of central banks. and we are implementing a very conservative monetary policy, which, as we believe, is in line with the policy principles of the european central bank ( ecb ). since 1993, latvia has been using the exchange rate based stabilisation programme. in february 1994, the bank of latvia pegged the national currency to the sdr basket. we based our decision on the belief that a fixed exchange rate regime, if it is durable and credible, reduces uncertainty, eliminates currency risk and provides businesses with a sound basis for planning and pricing. it fosters investment and international trade, which are of a particular importance for the restructuring of a small, open economy like latvia. the bank of latvia has indeed ensured that the exchange rate arrangement is credible and durable, and the latvian economy has benefited from the stability. inflation has declined to a level consistently below 3 %, there has been considerable growth in exports, especially to the eu countries, and it has contributed to the strong gdp growth over the last years. the achieved macroeconomic stability allows us to set the target of fulfilling the nominal convergence criteria at the time of latvia ’ s accession to the eu. pegging the national currency to the sdr rather than to a single currency, the bank of latvia has made the lats fluctuate less against any individual currency than it would otherwise. furthermore, the structure of latvian foreign trade by settlement currencies largely corresponds to the composition of the sd