but it's hardest on those who can least afford essentials like food, housing, and transportation. persistently high inflation also undermines the ability of our economy to reach its full potential. the federal reserve has a dual 1 / 5 bis - central bankers'speeches mandate, set by congress, to promote price stability and maximum employment. and price stability is essential for the achievement of maximum employment on a sustained basis. over the past year, the fomc has taken strong actions to bring inflation down. although we have seen some moderation in recent months, the inflation rate remains far too high at 5 percent. in addition, measures of underlying inflation also remain elevated and well above our 2 percent longer - run goal. for example, after declining earlier in 2022, the new york fed's multivariate core trend has been hovering around 3 - 3 / 4 percent for the past few months. 1 similarly, both the dallas fed's trimmed - mean pce inflation rate and core inflation that excludes food and energy prices averaged around 3 - 3 / 4 percent over the past six months. so, our work is not yet done. inflation is still well above our 2 percent target, and it is critically important that we reach that goal. supply and demand misalignment to help illustrate how tighter monetary policy is working to reduce inflation, i like to use an analogy inspired by a mechanism that consists of different gears. 2 in this case, i'll hearken back to a time before rechargeable batteries, and even before quartz, to the age of the mechanical watch. our watch represents the economy, and its gears are different sectors. some gears spin quickly ; others turn slowly. they need to turn at the right speed to keep time accurately - or, in this example, to maintain balance in the economy. the gears are propelled by supply and demand, which act as the mainspring of our watch. but they have been misaligned since the onset of the pandemic. at first, when people were home and factories were shuttered, demand shifted strongly from services to goods, which were scarce due to supply - chain bottlenecks. then, once people got out of their homes and businesses reopened, we saw a rotation in demand away from goods and back to services. but even with this rebalancing and the contributions of tighter policy, overall demand still exceeds supply. similar imbalances exist in the labor market. after the pan

##demic forced mass shutdowns, unemployment surged. but as businesses reopened and the demand for workers rebounded, suddenly there weren't enough people to fill jobs. today, the labor market remains extremely tight. job gains are robust. job openings are near all - time highs. quit rates and wage gains remain elevated. and the unemployment rate, at 3. 4 percent, is the lowest since 1969. as some of you may recall, that was the year " in - agadda - da - vida " was the best - selling album. and the title track is, of course, another great valentine's day song. turning the inflation gears 2 / 5 bis - central bankers'speeches inflation has its own set of gears, and some are spinning faster than others. the one that's turning quickest relates to globally traded commodities - such as lumber, steel, and grains - that are sensitive to international economic and financial conditions. thanks in part to tighter policy in the united states and around the world, those prices are below the levels we saw following russia's invasion of ukraine. the gear that represents many other goods - such as cars, appliances, and furniture - has also started to turn. higher interest rates, both here and abroad, are damping global demand for goods. in addition, the severe supply - chain bottlenecks that initially affected this category began to improve last year, which likely contributed to the easing of prices for some durable goods in recent months. however, there are factors that may throw sand in this gear going forward. the economic resiliency of europe and a rebound in growth in china following the end of covid restrictions will likely increase global demand for goods. and further improvement in global supply - chain disruptions has stalled over the past few months. for example, the new york fed's global supply chain pressure index remains elevated relative to pre - pandemic levels. the slowest gear to turn is the one that represents non - energy services. it's influenced by the balance of overall supply and demand, and it will take the longest to rotate at the right pace for low and stable inflation. one area where we are seeing signs of this gear turning is in shelter costs. after a sharp rise, we have seen a steep decline in the rate of increase in new lease rents. assuming this trend continues, we should see a slowing of overall rent inflation during this year. that said, we have yet to see the gears turn for