theoretical papers, and established connections, usually in a research or advisory role, with the fed and other central banks. in the spring of 2002, i was asked by the administration whether i might be interested in being appointed to the federal reserve's board of governors. i was not at all sure that i wanted to take the time from teaching and research. but this was soon after 9 / 11, and i felt keenly that i owed my country my service. moreover, i told myself, the experience would be useful for my research when i returned to my post at princeton. i decided to take a two - year leave to go to washington. well, once again, so much for foresight. i have now been in washington nearly seven years, serving first as a fed governor, then chairman of the president's council of economic advisers. in the fall of 2005, president bush appointed me to be chairman of the fed, effective with the retirement of alan greenspan at the end of january 2006. you will not be surprised to hear that events since january 2006 have not been precisely as i anticipated, either. my colleague, bank of england governor mervyn king, has said that the object of central banks should be to make monetary policy as boring as possible. unfortunately, by that metric we have not been successful. the financial crisis that began in august 2007 is the most severe since the great depression, and it has been the principal cause of the global recession that began last fall. battling that crisis and trying to mitigate its effect on the u. s. and global economies has dominated my waking hours now for some 21 months. my colleagues at the fed and i have been called on to take many tough decisions, including adopting extraordinary and unprecedented policy measures to address the crisis. i think you will agree that the chain of events that began with my decision to go far from home for college and has culminated – so far – with the role i am playing today in u. s. economic policymaking is so unlikely that we could have safely ruled it out of consideration. nevertheless, of course, it happened. although i never could have prepared in advance for the specific events of the past 21 months, i believe that my efforts throughout my life to expand my horizons and to keep a broad perspective – for example, to study and write about economic and financial history, as well as more conventional topics in macroeconomics and monetary economics – have helped me better meet the challenges that have come my way.

monetary policy was ultimately needed to stem the high inflation and start the process of getting inflation down to the low and stable levels that were 2 / 3 bis central bankers'speeches the norm until the spring of last year. our aim is to avoid that outcome by acting with resolve now. these lessons are guiding us as we use our tools to bring inflation down. we are taking forceful and rapid steps to moderate demand so that it comes into better alignment with supply, and to keep inflation expectations anchored. we will keep at it until we are confident the job is done. 1 see ben bernanke ( 2004 ), “ the great moderation, ” speech delivered at the meetings of the eastern economic association, washington, february 20 ; ben bernanke ( 2022 ), “ inflation isn ’ t going to bring back the 1970s, " new york times, june 14. 2 see paul a. volcker ( 1979 ), “ statement before the joint economic committee of the u. s. congress, october 17, 1979, " federal reserve bulletin, vol. 65 ( november ), p. 888. 3 a review of the applications of rational inattention in monetary economics appears in christopher a. sims ( 2010 ), “ rational inattention and monetary economics, ” in benjamin m. friedman and michael woodford, eds., handbook of monetary economics, vol. 3 ( amsterdam : north - holland ), pp. 155 – 81. see alan greenspan ( 1989 ), “ statement before the committee on banking, housing, and urban affairs, u. s. senate, february 21, 1989, " federal reserve bulletin, vol. 75 ( april ), pp. 274 – 75. 3 / 3 bis central bankers'speeches