. and, even though the omicron wave is posing new obstacles, some supply issues are starting to work themselves out as the economy adjusts to the changing circumstances. just as the pandemic has followed its own script, i anticipate that the dynamics of inflation will also be different than previous cycles. with growth slowing and supply constraints gradually being resolved, i expect inflation to drop to around 2 - 1 / 2 percent this year, much closer to the fomc ’ s 2 percent longer - run goal. and looking further ahead, i expect inflation to get close to 2 percent in 2023. policy actions these developments in the labor market and for inflation inform the federal reserve ’ s policy response and recent actions. in its december 2021 statement, the fomc said that it would keep the target range for the federal funds rate at 0 to ¼ percent. 2 with inflation having exceeded 2 percent for some time, the fomc said it expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the fomc ’ s assessments of maximum employment. because of inflation developments and the notable improvement in the labor market, the fomc also decided to reduce the monthly pace of its net asset purchases. with our actions, we have started the process of adjusting the stance of monetary policy away from one of providing maximum support for the economy. this movement in policy reflects the gains the economy has made since the beginning of the pandemic and the evolution of the risks to the achievement of our goals. the next step in reducing monetary accommodation to the economy will be to gradually bring the target range for the federal funds rate from its current very - low level back to more normal levels. given the clear signs of a very strong labor market, we are approaching a decision to get that process underway. the timing of such decisions will be based on a careful consideration of a wide range of data and information, with a clear eye on our maximum employment and price stability goals. conclusion as we turn a page on the new year, it ’ s clear that we have not yet reached the end of this pandemic story. but despite the challenges, i am hopeful of a continued strong recovery this year. 1 gianluca benigno, julian di giovanni, jan j. j. groen, and adam i. noble, a new barometer of global supply chain pressures, federal reserve bank of new york liberty street economics, january 4, 2022

john c williams : reading the recovery remarks ( via videoconference ) by mr john c williams, president and chief executive officer of the federal reserve bank of new york, at the council on foreign relations, 14 january 2022. * * * as prepared for delivery good morning, everyone, and happy new year. thank you, charles, for that introduction. and thanks to richard haass for the opportunity to speak with the members of the council on foreign relations once again. for the past two years, i ’ ve begun my remarks by saying how much i wish we could meet together in person. this time, i really was hoping for a chance to rewrite the script. after seeing so much progress on vaccinations over the past year and a moderation in covid - 19 infections during the fall, just a short time ago many of us had expected that we ’ d soon be turning the page. the story of the pandemic is a complicated one. it is writing itself as we live it, and the storyline has been far from predictable. this is, first and foremost, a health crisis. the unusual and extraordinary nature of the situation means that circumstances are constantly evolving. for the economy, this has meant that what we ’ ve experienced is unlike any recession or recovery we ’ ve seen — or read about — in the past. while there have been significant improvements in the overall economy, setbacks persist in some areas, and new challenges have appeared. i ’ ll always take an opportunity to quote something from the lord of the rings canon, so i ’ ll continue with the story analogy and say that for many people, these past few weeks have felt like we ’ ve been “ there and back again. ” we again find ourselves in a period of extraordinary difficulty. the emergence and rapid spread of the omicron variant in the united states and around the world are resulting in new peaks of covid infections and hospitalizations, as well as severe strains on the healthcare and essential services workforce. this is a reminder that the path of economic recovery continues to be driven by the course of the virus. in my remarks this morning, i ’ ll share more about what we ’ re seeing in the incoming data and how it relates to the economic picture in the united states and the world more broadly. i ’ ll also highlight the significant progress we ’ ve seen in the labor market and my outlook for inflation. finally, i ’ ll discuss the federal reserve ’ s recent policy actions