this extra boost. strong global growth, fiscal stimulus, and accommodative financial conditions all helped drive strong headline gdp growth and a tight labor market. these tailwinds have calmed, and in fact reversed in some cases, and i expect growth to slow considerably relative to last year, to around 2 percent. three developments contribute to this view : a downturn in global growth, heightened geopolitical uncertainty, and the effects of tighter financial conditions. starting with global growth, the outlook in both europe and china has become less bright, with the downgrade to the outlook in europe notable. this means less demand for our exports. in addition, there ’ s geopolitical risk on the horizon that ’ s creating angst. i know we ’ re all on tenterhooks waiting to see what will happen at the end of this month to our good friends across the pond. and concerns around trade negotiations continue to loom large. these geopolitical risks leave an imprint on the economy as businesses put off hiring and investment decisions until the air has cleared. moving away from the global context, back to the united states, the tightening of financial conditions that occurred late last year will likely restrain consumer and business spending this year. in fact, we have already seen a sustained slowing in housing construction, in part reflecting less favorable financing costs. now, i know this talk of slowing growth is causing uncertainty, some hand - wringing, and even fear of recession. but slower growth shouldn ’ t necessarily come as a surprise. for quite some time, the economic fundamentals have pointed to gdp growth much lower than what we saw in the 1990s, for example. in fact, my 2 percent growth forecast is right in line with g - star. that means slower growth isn ’ t necessarily cause for alarm. instead, it ’ s the “ new normal ” we should expect. and, it ’ s important to remember that this is happening at a time when the labor market is very strong. from the perspective of monetary policy, the overall picture of the economy is about as good as it gets : very low unemployment, sustainable growth, and inflation just about at our 2 percent goal. 2 / 4 bis central bankers'speeches given this favorable situation, when you look at monetary policy, things are looking pretty normal as well. my current estimate for r - star is 0. 5 percent, so when you adjust for inflation that ’ s near 2 percent, the current federal funds rate of 2

strive to engage a wide diversity see “ the introduction of the tmpg fails charge for u. s. treasury securities ” for more information. the new york fed has organized workshops and conferences on reforming culture in the financial services industry. additionally, several executives have spoken publicly on the topic. see here for more detail. the g30, the basel committee, the european systemic risk board, and the fsb have issued papers on culture, governance, and misconduct risk. the bank of england ’ s fair and effective markets review called for higher conduct standards for the fixed income markets. the central bank of the netherlands – de nederlandsche bank – has developed new approaches for the supervision of corporate culture and decisionmaking. the mpg is working with the bis fxwg to develop market - based adherence mechanisms for the fx global code. bis central bankers ’ speeches of market participants as we develop best practices. this is to ensure that the practices reflect all relevant segments of the market and to promote buy - in and thus foster their adoption. as i mentioned before, both the tmpg and the fxc are expanding their membership such that a range of market participants feels vested in their missions. in addition, we engage with other sectors of the marketplace, such as trade associations and infrastructure providers, to educate them about best practices that have been developed and facilitate their potential adoption of aspects of them. when central banks operate in the markets ourselves, we expect the best practices to apply. this has two aspects. first, we align our own practices to the best practices, except where it would inhibit our policy functions. as a corollary, we expect those institutions that choose to become our counterparties to comply with the best practices as well, so that when we transact, we do so with the confidence that our counterparties are adhering to these standards of behavior. finally, we keep supervisors, regulators and other official sector bodies, inside and outside our four walls, abreast of the work of our committees. in some cases, they may choose to adopt standards first articulated by our committees as part of their frameworks. 22 conclusion market participants have a responsibility to themselves, their clients, and the financial markets in which they transact to implement best practices within their own institutions and to encourage their clients and other counterparties to do the same. broad adoption of best practices can strengthen each market participant ’ s existing controls, help reduce market disruptions, and ultimately foster greater confidence in the broader financial system.