do not mesh. but it is not easy to see how they will coalesce into a single image. the operation of monetary policy is often said to be more of an art than a precise science. but none of us can claim to be a michelangelo. so let me take you briefly through three particular areas of uncertainty we face, in the hope that, when we get to the discussion session, you will be able to add definition and colour to my half - formed sketches. first, the slowdown in the us is an important area of uncertainty because, if the downside risk of a deeper or more prolonged slowdown materialises, we would face slower growth and lower inflation in the uk than we are projecting on our central projection. that would, of course, be grounds for us to contemplate further easing in our monetary stance. that follows because our inflation target is, importantly, a symmetrical one : we need to be just as ready to contemplate easing if we see evidence on the downside of the economy underperforming, and hence the likelihood of inflation running over time materially below our 2 1 / 2 % target, as we would be to exercise restraint on the upside. we take this symmetrical nature of our responsibility very seriously and there is undoubtedly a significant risk that the us slowdown could have a material dampening effect on uk activity. analysts have used a large part of the alphabet to try to describe various views of how the us economy may develop. i am not sure that i find any of these pictograms particularly helpful, not least because people are sometimes pretty vague about vital details like the dimensions of the letter they favour or the angle of its arms : a big v, after all, can feel awfully like a u when you are down the bottom and trying to find your way up again. the short answer is that none of us can pretend to know precisely how the story will develop. it will be important to keep an open mind and be prepared to adapt our assessment in the light of actual events. but in doing so, there are four considerations that i would suggest are particularly germane to this first area of uncertainty. first, we need to recognise that we are talking of slowdown in the us from what have been extremely buoyant rates of growth, maintained for several years past, as the us economy has reaped the benefits of the application of information technology and the rise in productivity growth that had engendered - the new

the fall was largely the result of a fall in labor force participation. at 14. 8 percent the unemployment rate remains unacceptably high. high unemployment and low labor force participation remain perhaps the biggest challenges to the puerto rico economy. even in relatively prosperous times, the unemployment rate on the island has been more than double the rate on the mainland. high unemployment and low labor force participation are especially serious problems for young workers and are perhaps the clearest evidence that puerto rico needs to make better economic progress. many of the current problems facing puerto rico relate not just to cyclical weakness but to deeper structural challenges. this brings us to the subject of the report we issued today. i do not presume that this report is the last word on these important questions. we do not presume to claim that we have all the answers. rather, i hope that it is the start of a constructive and bipartisan debate that will advance good public policy and a better future for the people of puerto rico. i also hope that it will be read and considered beyond the business and government community, across the society at large. the goal we seek is not simply business success and expansion, but broad - based prosperity with rising standards of living and greater opportunities for all puerto ricans. i want to thank you again for the opportunity to address the chamber. jamie mcandrews, executive vice president and director of research, will now talk about the report we released and lay out its findings and recommendations. bis central bankers ’ speeches