until the economy reaches conditions consistent with its assessments of maximum employment, and inflation has reached 2 percent and is on track to moderately exceed 2 percent for some time. there is still a long way to go before reaching maximum employment, and over time it should become clearer whether we have reached 2 percent inflation on a sustained basis. conclusion i began by saying that it ’ s nearly impossible to predict the future. the economy remains tied to the extraordinary and unpredictable nature of the pandemic. but with continued progress on the economic recovery and a reversal of some of the pandemic ’ s unusual dynamics, i anticipate that we will soon reach a time when business will be more like usual. i look forward to the q & a portion of today ’ s program, and very much look forward to seeing many 3 / 4 bis central bankers'speeches of you when we are able to be together again. 1 see hobijn, bart, and aysegul sahin ( 2021 ), “ maximum employment and the participation cycle, ” paper presented at the 2021 jackson hole economic policy symposium, august 27. 2 olivier armantier, fatima boumahdi, leo goldman, gizem kosar, jessica lu, giorgio topa, and wilbert van der klaauw, “ have consumers ’ long - run inflation expectations become un - anchored?, ” federal reserve bank of new york liberty street economics, september 24, 2021. board of governors of the federal reserve system, federal reserve issues fomc statement, december 16, 2020. 4 / 4 bis central bankers'speeches

for the commonwealth ’ s products fall, so jobs and incomes on the island suffer. in the recent recession – as in many financial crises – global trade declined even faster than output. as a result, the shock generated by the financial crisis spread quickly throughout the world. economies and regions far from where the problems began suffered. this was especially true for economies dependent on trade, such as puerto rico ’ s. in fact, puerto rico suffered much more than most because the puerto rican economy was already in recession when the financial crisis struck. while puerto rico interacts with many other economies, one partner looms especially large for the commonwealth. for generations, the mainland united states and puerto rico have had a special economic relationship in many dimensions. one of the most obvious of these ties is the free flow of people between the mainland and the island. indeed, according to the u. s. census, about one half of the people who identify their origin as puerto rican lived on the mainland in 2008. the active migration, return migration and remittances to family members reflect and reinforce the close personal and economic ties between puerto rico and the mainland. another link is our common use of the dollar. this means that tourists from the mainland can visit without worrying about changing currencies. in addition, businesses can make long - term investments in puerto rico without worrying that currency fluctuations against the dollar will undermine their competitiveness. it also means that when the u. s. dollar falls in value, puerto rico ’ s exports become more competitive around the world, although not, of course, in the united states. somewhat less obvious are the consequences of the mainland ’ s role as puerto rico ’ s largest trading partner. the mainland accounts for half of the island ’ s imports and threequarters of its exports. with such heavy trade flows, when the mainland economy does poorly – as during the past year – puerto rico ’ s economy and job growth suffer. financial regulation also represents an important linkage. of course, my presence here representing the new york fed is one example of that particular connection – puerto rico is part of the second district of the federal reserve system, along with new york, the u. s. virgin islands and parts of new jersey and connecticut. i ’ ll return to the theme of financial regulation shortly. for now, let me just say that we share, along with the rest of the world, a commitment to taking the necessary steps to prevent the type of financial crisis that we just