- term inflation expectations are little changed. that said, taken together, the evidence suggests that measures of expected inflation are at the lower end of a range that i consider to be consistent with our price - stability goal of 2 percent pce inflation. while my baseline outlook for growth, employment, and inflation is a positive one, a number of crosscurrents that are buffeting the economy bear careful scrutiny. global growth is slowing, particularly in china and europe. global policy uncertainty remains elevated. and financial conditions have been volatile, making efforts to extract signal from noise more challenging. monetary policy as i have indicated in recent speeches, monetary policy at this juncture needs to be especially data dependent, with the federal funds rate now in the range of federal open market committee ( fomc ) participants'estimates of its longer - run neutral level. moreover, with employment and inflation now at or close to our dual - mandate objectives, the fomc in its january statement indicated it can afford to be patient as we assess the need for further adjustments in our policy stance. 2 going forward, we need, i believe, to be cognizant of the balance we must strike 1 / 2 bis central bankers'speeches between ( 1 ) being forward looking and ( 2 ) maximizing the odds of being right given the reality that the models that we consult are not infallible. for example, were a model to predict a surge in inflation, a decision for preemptive hikes before the surge is evident in actual data would need to be balanced against the considerable cost of the model being wrong. given muted inflation and stable inflation expectations, i believe we can be patient and allow the data to flow in as we determine what future adjustments to the target range for the federal funds rate may be appropriate to strike this balance. we also decided at our january meeting to maintain our current operating regime a " floor " system - - for implementing monetary policy. 3 the fomc will continue to set the stance of policy by establishing the target range for the federal funds rate. the interest on excess reserves rate will be our primary tool to keep the federal funds rate in the target range. in this regime, we will provide an ample supply of reserves in the banking system to ensure that we remain on the flat portion of the reserve demand curve and that the federal funds rate is insulated from shocks to reserve demand and supply. with this decision on our operating regime made, the committee can now decide on the appropriate

joachim wuermeling : digital transformation - opportunities and risks for the financial sector speech by prof joachim wuermeling, member of the executive board of the deutsche bundesbank, at the banking and corporate evening ( banken - und unternehmensabend ), munchen, 23 may 2019. * * * 1 introduction ladies and gentlemen, my speech today is about digital transformation. we have all heard about this subject before, and banks and savings banks are currently in the midst of change – i doubt i need to elaborate on that for the benefit of anyone in this room. what i would like to do today is raise a number of questions that concern not only individual enterprises but also the evolution of the sector as a whole and thus its regulatory framework, too. we have to realise that many of the developments that are still individual projects at present and are taking place gradually are part of a major upheaval. what is more, it is up to us to help shape this transition, which some are calling the fourth industrial revolution. this is challenging, because our objective – successfully shaping digital transformation in the financial sector – is in flux and the processes involved are complex. so i am not here simply to lecture you on this topic in my supervisory capacity ; rather, i am in favour of all parties involved – banks and supervisors – working together to think about how this is all going to evolve. i would like to talk to you today about three aspects of digital transformation : first, the opportunities ; second, the risks ; and, finally, the matter of the right framework. 2 opportunities presented by digitalisation let ’ s first take a look at the opportunities. i ’ m not talking about business specifics here, but rather developments in the wider context. the term “ digitalisation ” is difficult to grasp, and the language in which the term is wrapped obscures what it is ultimately really all about : innovation that translates into productivity and benefit. i say this because, generally speaking, digitalisation and technological progress do not automatically lead to productivity growth. in order to unleash a technology ’ s potential, we need to get to grips with the technology itself, what we ourselves do with it as well as the environment in which it operates. this is where the actual innovation takes place. this is what i am alluding to when using the term “ digital transformation ”. essentially, the idea is to re - evaluate the things we do every day. for the most part, we