1, https : / / www. federalreserve. gov / newsevents / speech / brainard20151201a. htm. - 4to address the downward bias, the new framework adopts a flexible average inflation - targeting strategy ( fait ) that seeks to achieve inflation that averages 2 percent over time in order to ensure longer - term inflation expectations are well anchored at 2 percent. under a fait strategy, appropriate monetary policy aims to achieve inflation moderately above 2 percent for some time to make up for shortfalls during a period when it has been running persistently below 2 percent. 7 these changes could have a beneficial effect on the robustness of employment as well as the economy ’ s potential growth rate. in current circumstances, where a strong labor market can be sustained without the emergence of high inflation, the conventional practice of reducing policy accommodation preemptively when unemployment nears its estimated longer - run normal rate is likely to lead to an unwarranted loss of opportunity for many workers. 8 for instance, the labor market healing that took place after the unemployment rate reached the 5 percent median summary of economic projections estimate of the longer - run normal unemployment rate, from the fourth quarter of 2015 until the fourth quarter of 2019, included the entry of a further 3 - 1 / 2 million prime - age americans into the labor force, a movement of nearly 1 million people out of long - term unemployment, and opportunities for 2 million involuntary part - time workers to secure see ben s. bernanke, michael t. kiley, and john m. roberts ( 2019 ), “ monetary policy strategies for a low - rate environment ” finance and economics discussion series 2019 - 009 ( washington : board of governors of the federal reserve system, february ), https : / / doi. org / 10. 17016 / feds. 2019. 009 ; and lael brainard ( 2019 ), “ federal reserve review of monetary policy strategy, tools, and communications : some preliminary views, ” speech delivered at the presentation of the 2019 william f. butler award, new york association for business economics, new york, november 26, https : / / www. federalreserve. gov / newsevents / speech / brainard20191126a. htm. twelve - month pce inflation was only 1. 6 percent in december 2019, when the unemployment rate was 3. 5 percent, racial gaps in employment were at historical lows,

jerome h powell : the evolving structure of us treasury markets speech by mr jerome h powell, member of the board of governors of the federal reserve system, at the federal reserve bank of new york, new york city, ( via prerecorded video ), 20 october 2015. * * * i am pleased to be here with this distinguished group of market participants, academics, government officials, and many others who are vitally interested in the issues before us today. 1 i am sure that all of us recognize the importance of the u. s. treasury markets to our economy and our financial system ; indeed, to the world economy and the global financial system. as bill just outlined, for the next two days, we will collectively address the most important questions facing the treasury markets today. 2 are there significant problems in these markets that are not likely to self - correct? more specifically, is liquidity in broad decline, or more prone to sudden disappearance? if so, what are the causes? and what are the costs and benefits of potential market - led or regulatory responses? the design of this conference is to provide a forum for differing perspectives on these issues. it has been one year since the events of october 15, 2014. appropriately, the conference will begin with a review of the findings of the recent joint staff report issued by the u. s. department of treasury, the board of governors, the federal reserve bank of new york, the securities and exchange commission, and the commodity futures trading commission. 3 the report analyzes in depth the unprecedented events and market conditions that day. it also shows clearly how dramatically the structure of treasury markets has changed in recent years. new participants and new technologies have taken prominent roles in these markets, and longtime market participants have adopted new business models. today ’ s discussions will reflect this altered landscape, with panels on automated trading, market making, and the impacts that changes in treasury markets have had on liquidity and on end users. my discussions with market participants and regulatory colleagues suggest a range of opinions about treasury market liquidity. while most market participants perceive some reduction in liquidity, views on the severity of the situation seem to be more mixed. some measures such as trade size and market depth have declined, and investors today have to employ increasingly sophisticated strategies to execute larger trades at a good price. some other measures show no decline in overall market liquidity. however, we need to consider not just the average level of liquidity under normal trading conditions, but also