developments abroad, the committee maintained an unchanged target range for the federal funds rate for most of the year in order to support improvement in the labor market and an increase in inflation toward 2 percent. at its december meeting, the committee raised the target range for the federal funds rate by 1 / 4 percentage point, to 1 / 2 to 3 / 4 percent. in doing so, the committee recognized the considerable progress the economy had made toward the fomc ’ s dual objectives. the committee judged that even after this increase in the federal funds rate target, monetary policy remains accommodative, thereby supporting some further strengthening in labor market conditions and a return to 2 percent inflation. at its meeting that concluded early this month, the committee left the target range for the federal funds rate unchanged but reiterated that it expects the evolution of the economy to warrant further gradual increases in the federal funds rate to achieve and maintain its employment and inflation objectives. as i noted on previous occasions, waiting too long to remove accommodation would be unwise, potentially requiring the fomc to eventually raise rates rapidly, which could risk disrupting financial markets and pushing the economy into recession. incoming data suggest that labor market conditions continue to strengthen and inflation is moving up to 2 percent, consistent with the committee ’ s expectations. at our upcoming meetings, the committee will evaluate whether employment and inflation are continuing to evolve in line with these expectations, in which case a further adjustment of the federal funds rate would likely be appropriate. the committee ’ s view that gradual increases in the federal funds rate will likely be appropriate reflects the expectation that the neutral federal funds rate — that is, the interest rate that is neither expansionary nor contractionary and that keeps the economy operating on an even keel — will rise somewhat over time. current estimates of the neutral rate are well below pre - crisis levels — a phenomenon that may reflect slow productivity growth, subdued economic growth abroad, strong demand for safe longer - term assets, and other factors. the committee anticipates that the depressing effect of these factors will diminish somewhat over time, raising the neutral funds rate, albeit to levels that are still low by historical standards. that said, the economic outlook is uncertain, and monetary policy is not on a preset course. fomc participants will adjust their assessments of the appropriate path for the federal funds rate in response to changes to the economic outlook and associated risks as informed by incoming data. also, changes in fiscal policy or other economic policies could

for release on delivery 2 : 00 p. m. est november 9, 2023 opening remarks by jerome h. powell chair board of governors of the federal reserve system at “ monetary policy challenges in a global economy, ” a policy panel at the 24th jacques polak annual research conference, hosted by the international monetary fund washington, d. c. november 9, 2023 thank you for the opportunity to participate in today ’ s panel discussion. my assigned topic is u. s. monetary policy in the current global inflation episode. i will briefly address the u. s. outlook and then turn to three broader questions raised by the historic events of the pandemic era. u. s. inflation has come down over the past year but remains well above our 2 percent target ( figure 1 ). 1 my colleagues and i are gratified by this progress but expect that the process of getting inflation sustainably down to 2 percent has a long way to go. the labor market remains tight, although improvements in labor supply and a gradual easing in demand continue to move it into better balance. 2 gross domestic product growth in the third quarter was quite strong, but, like most forecasters, we expect growth to moderate in coming quarters. of course, that remains to be seen, and we are attentive to the risk that stronger growth could undermine further progress in restoring balance to the labor market and in bringing inflation down, which could warrant a response from monetary policy. the federal open market committee ( fomc ) is committed to achieving a stance of monetary policy that is sufficiently restrictive to bring inflation down to 2 percent over time ; we are not confident that we have achieved such a stance. we know that ongoing progress toward our 2 percent goal is not assured : inflation has inflation under our preferred measure, the 12 - month change in the total personal consumption expenditures ( pce ) price index, has declined from 6. 6 percent in september 2022 to 3. 4 percent in september 2023. the 12 - month change in the core pce measure, which excludes the volatile food and energy prices and therefore may provide a better signal of where inflation is headed, has declined from 5. 5 percent in september 2022 to 3. 7 percent in september 2023. the labor force participation rate has moved up since late last year, particularly for individuals aged 25 to 54 years, where that rate has increased by nearly 1 percentage point, on net, since december. private payrolls increased by an average