inflation has been running somewhat below the federal reserve ’ s objective of a 2 percent annualized rate for the personal consumption expenditures ( pce ) deflator. the latest congressional budget office forecast has the four - quarter percent change of the core pce deflator moving up from 1½ percent in the second quarter of 2014 to 1. 9 percent by the fourth quarter of 2015. as with growth, i find this forecast to be quite reasonable, but would argue that the risks are on the side that inflation moves upwards more slowly than this. first, the appreciation of the dollar and weakening of foreign growth prospects that i mentioned earlier both act to dampen inflation pressures. second, energy production in the u. s. is rising much faster than i would have guessed just a few years ago, helping to reduce energy prices which in turn reduces a wide range of production and distribution costs. lastly, i would note that research suggests that inflation expectations play a very important role in the inflation process. those expectations remain well anchored at the present time, despite concerns by some that the amount of slack in the economy has declined substantially. i am quite confident that those expectations will remain well anchored in the future, limiting the increase in inflation set in motion by faster growth and further reductions in slack. so what does this imply for monetary policy? we have made substantial progress with respect to the labor market outlook since we began our current program of large scale asset bis central bankers ’ speeches purchases in 2012. because it looks very likely that the program will have fulfilled its objectives, i expect to support a decision to end the asset purchase program at the end of this month. at the same time, it still is premature to begin to raise interest rates – the labor market still has too much slack and the inflation rate is too low. the consensus view is that lift - off will take place around the middle of next year. that seems like a reasonable view to me. but, again, it is just a forecast. what we do will depend on the flow of economic news and how that affects the economic outlook. for example, firmer growth, higher inflation, and a more rapid tightening of the labor market could cause us to move earlier. conversely, should economic growth disappoint, the timing of lift - off could be pushed later. i hope the economy cooperates. if it does and lift - off begins sometime next year, that will be something to be very excited about. it will signal that the economy is

zeti akhtar aziz : role of central banks in emerging economies speech by dr zeti akhtar aziz, governor of the central bank of malaysia, at the svein gjedrem colloquium, oslo, 18 november 2010. * * * introduction central banks continue to be challenged with changing demands as the environment before us is rapidly being transformed. these fundamental and pronounced changes have prompted calls for a review of the role of central banks in the financial system and in the economy. frequently, such calls have been precipitated during a financial crisis, as was the case during the asian financial crisis and more recently during this current global financial crisis. however, such institutional reforms undertaken in periods of exceptional conditions risks influencing the nature and direction of the reforms. while the reforms following a crisis may address the immediate term demands, of equal importance is the medium and the longer term implications of the reforms. perhaps, an important lesson for central banks is that such reinvention and modernisation should be undertaken during the good times so that we will not be subjected to such changes during the worst of times. in essence, in such a dynamic environment, central banks need to continue to adjust and evolve to remain relevant and, thus, useful. it is my great honour to be invited to speak at the norges bank colloquium held in honour of governor svein gjedrem. let me take this opportunity to congratulate governor gjedrem for the achievements of the bank under this leadership during his twelve year terms in office. my remarks today will focus on the role of central banks from the perspective of emerging economies and more specifically in the context of central banking in asia as we confront the challenges in this rapidly changing global economic and financial environment. central bank mandates while there is no unique blueprint for the design of the institutional arrangements for a central bank, of importance is that it needs to be relevant to our own circumstances. but of importance is that there is clarity on the mandate, the governance framework and the areas of accountability of the central bank. and that needs to be supported by the empowering legislation to ensure that the central bank has at its disposal the capabilities to deliver the mandate. central banks in emerging economies generally have a broader mandate beyond the traditional mandates of monetary and financial stability. even within these traditional mandates, the role of central banks have varied considerably. in the mandate of monetary stability, it has ranged from having the narrow mandate of price stability to the mandate