population ratio since 2007. as the baby boom birth cohort – born between 1946 and 1964 – ages, the fraction of retirees in the population grows steadily. but these demographic forces are still not large enough to account for most of the decline in bis central bankers ’ speeches the employment - to - population ratio that i ’ ve described. one way to see this – but not the only way – is to focus on people who are outside the normal retirement age. here, i ’ ve plotted the fraction of the population aged 25 to 54 who have a job. this ratio has improved from its low point, but also remains lower than at any time between 1986 and 2007. even among those who have a job, there are signs that the economy is significantly underemploying our human resources. the bureau of labor statistics reports each month on the number of americans who are working part time, would like to work more hours, but are unable to obtain those additional hours. that fraction of the labor force has fallen, but remains unusually high. to summarize what we learn from the charts : the good news is that the labor market has improved since the end of the great recession. the bad news is that the rate of improvement over the past four - plus years has been painfully slow. as a consequence, there bis central bankers ’ speeches is still significant underutilization of our country ’ s most important resource – its people. we have to conclude that the fomc is underperforming with respect to its goal of promoting maximum employment. conclusions earlier, i asked you to consider this speech as a report to you on the fomc ’ s performance with respect to its two congressionally mandated objectives. we ’ ve seen that the fomc is undershooting its price stability objective, in that inflation is running well below the fomc ’ s goal of 2 percent and is expected to remain that low for several years. the undershooting is problematic because it suggests that the american economy is wasting available resources, especially its human resources. we ’ ve seen strong evidence of this underutilization in the performance of key labor market metrics. hence, the fomc is also underperforming with respect to its maximum employment objective. i continue to believe that we need to do better as a committee. thank you for listening. i ’ d be happy to take your questions. bis central bankers ’ speeches

there is little sign of an uptick – over the past 12 months, inflation has been 1. 5 percent. bis central bankers ’ speeches thus, the macroeconomic shock of 2007 – the great recession – pushed both employment and inflation below the fomc ’ s goals. in this sense, the two mandates have been entirely complementary over the past seven years. unfortunately, monetary policy has proven to be insufficiently accommodative to offset either the price or employment effects of this large shock. possible improvements in the fomc ’ s framework statement the framework statement was adopted by the fomc in january 2012. it has been reaffirmed, with only minor wording changes, in january 2013 and again in january 2014. however, the minutes for the january 2014 meeting note that fomc participants saw the coming year as an appropriate time to consider whether the statement could be improved in any way. i concur : the time is right to consider sharpening the fomc ’ s statement of its objectives in several ways. i ’ d like to explain, and express support for, two particular clarifications related to the fomc ’ s formulation of the price stability mandate. first, i believe the fomc should be clear that its inflation objective is symmetric. many observers emphasize the need to keep inflation from rising above 2 percent. but in my view, inflation below 2 percent is just as much of a problem as inflation above 2 percent. the central bank of canada also has a 2 percent inflation target. its language about symmetry is pretty clear, at least as central banking communications go : “ the bank is equally concerned about inflation rising above or falling below the target and will act... in order to bring inflation down, or to push it back up, to 2 per cent. ” 1 in my view, the fomc should use similar language to characterize its inflation objective. why do i see symmetry as important? without symmetry, inflation might spend considerably more time below 2 percent than above 2 percent. inflation persistently below the 2 percent target could create doubts in households and businesses about whether the fomc is truly aiming for 2 percent inflation, or some lower number. this kind of unmooring of inflation “ monetary policy, ” bank of canada, may 29, 2012. bis central bankers ’ speeches expectations would reduce the effectiveness of monetary policy as a mitigant against adverse macroeconomic shocks. second, i believe that the fom