second, on an ongoing basis, the committee should provide explicit communication about how its chosen actions are indeed consistent with its pre - announced resolution of the inflation - unemployment trade - off. here, i believe that the use of metrics like the mandate dashboard provides a useful form of discipline – both on our own actions and on the public ’ s understanding of those actions. bis central bankers ’ speeches in a speech he gave last may, chairman bernanke stated, “ transparency regarding monetary policy … not only helps make central banks more accountable, it also increases the effectiveness of policy. ” 3 i agree completely with this sentiment. and i see my two recommended future steps – clearer communication about trade - offs and the explicit use of metrics like the mandate dashboard – as promoting exactly the kind of transparency that chairman bernanke was describing. thank you for listening. i look forward to taking your questions. see chairman bernanke ’ s may 25, 2010, speech, “ central bank independence, transparency, and accountability. ” bis central bankers ’ speeches

fed has created at federalreservehistory. org. i encourage you to visit this site to learn more about the people, places and events that have shaped federal reserve history. i ’ d especially encourage you to look up norman holter. mr. holter was one of the original directors of the minneapolis reserve bank, and he played the key role in a branch office being established here in helena in 1921. i ’ ve always enjoyed reading and studying history. and i strongly believe that history can help inform policymakers ’ decisions in the current day. but, at the same time, i do think that policymakers need to be careful in how they use history. the monetary history of the 1970s is a great example of this need for care. i ’ m sure that some of you in this room remember that inflation – the rate of growth of prices – rose to disturbingly high levels in the 1970s. faced with this challenge, president ford launched a national campaign to “ whip inflation now ” – win for short. the famous broadway composer meredith willson wrote a song for the win campaign in which he summarized the economic situation in these catchy lyrics : “ who needs inflation? not this nation! who ’ s going to pass it by? you are and so am i! ” mr. willson ’ s pithy characterization was spot on in 1974. but 40 years later, i would suggest that it ’ s exactly backward. right now, this nation needs more inflation. the federal reserve aims to keep the personal consumption expenditure ( pce ) inflation rate at 2 percent. but bis central bankers ’ speeches since the start of the recession almost seven years ago, the pce inflation rate has averaged 1. 5 percent. over the past year, it has averaged 1. 6 percent. and i expect it to remain below 2 percent until 2018. the persistently below - target inflation rate is a signal that the u. s. economy is not taking advantage of all of its available resources. if demand were sufficiently high to generate 2 percent, then demand would be sufficiently high to allow the economy to make use of the underutilized resources. and the most important of those resources is the american people. there are many people in this country who want to work more hours, and our society is deprived of their production. so, it ’ s fun and educational to read about the 1970s on the fed history gateway. i encourage you to do so. but it ’ s critical for monetary policymakers