opposed to freezing the fed funds rate for two years. first, in reporting my views to the committee, i noted my concern for the fragility of the u. s. economy and weak job creation. it might be noted by the press here today that although i am constantly preoccupied with price stability – in the aviary of central bankers, i am known as a “ hawk ” on inflation – i did not voice concern for the prospect of inflationary pressures in the foreseeable future. indeed, the dallas fed ’ s trimmed mean analysis of the inflationary bis central bankers ’ speeches developments in june indicated that the trimmed mean pce turned in its softest reading of the year. the trimmed mean analysis we do at the dallas fed focuses on the price movements of personal consumption expenditures. it is an analysis that tracks the price movements of 178 items that people actually buy, such as beer, haircuts, shoe repair, food and energy prices. in june, the trimmed mean came in at an annualized rate of 1. 3 percent, versus 2. 1 percent for the first five months of the year. the 12 - month rate was 1. 5 percent. my concern is not with immediate inflationary pressures. core producer prices are still increasing at a higher than desirable rate. but i have suggested to my colleagues that while many companies have begun and will likely continue to raise prices to counter rising costs that derive from a range of factors – including the run - up of commodity prices in 2010 and increases in the costs of production in china – weak demand is beginning to temper the ability of providers of goods and services to significantly raise prices to consumers. my concern is with the transmission mechanism for activating the use of the liquidity we have created, which remains on the sidelines of the economy. i posit that nonmonetary factors, not monetary policy, are retarding the willingness and ability of job creators to put to work the liquidity that we have provided. i have spoken to this many times in public. those with the capacity to hire american workers – small businesses as well as large, publicly traded or private – are immobilized. not because they lack entrepreneurial zeal or do not wish to grow ; not because they can ’ t access cheap and available credit. rather, they simply cannot budget or manage for the uncertainty of fiscal and regulatory policy. in an environment where they are already uncertain of potential growth in demand for their goods and services and have yet

became the basis for the green revolution that he started in mexico and that ended up feeding billions of people around the world. well, i think by now you know that the boy i ’ m speaking of is me. i may be the only central banker on the planet whose little league baseball coach went on to win the nobel peace prize! my fondest childhood memories are from mexico. small wonder that i delighted when president clinton asked me to become deputy u. s. trade representative and help implement nafta – even if it meant matching wits with formidable negotiators like luis de la calle and herminio blanco! small wonder that as president of the federal reserve bank of dallas, i have delighted in working closely with guillermo ortiz and agustin carstens. small wonder that at meetings of the federal open market committee or in u. s. banking circles, i have often argued mexico ’ s case. or taken sheer pleasure in pointing out to u. s. congressmen and senators, and in speeches and media interviews, that the mexican government – unlike my own government – actually can agree on a budget, keep deficits under control, bring about structural change and resist interfering with the workings of an independent central bank. bis central bankers ’ speeches i am full of pride for mexico. i am full of pride that this country, the country of my happiest childhood years, would now choose to honor me with the order of the aztec eagle. the citation for this honor speaks of my being a fierce defender of price stability. in the parlance of central banking, i am referred to as a “ hawk. ” well, it may not surprise you to learn that taxonomists place the eagle and the hawk in the same bird family. so, secretary meade, secretary videgaray and dear friend agustin, i accept this thoughtful honor from the president of the country i love so much with hawkish pride and close kinship to the golden eagle that is the symbol of mexico. ¡ viva mexico! thank you. bis central bankers ’ speeches