restoring price stability, which is the foundation for a vibrant and healthy economy. over the past year, inflation has increased rapidly and dramatically to levels last seen in the early 1980s. a year ago, overall inflation, as measured by the percent change in the personal consumption expenditures ( pce ) price index, was 2. 5 percent. in march, it was 6. 6 percent. a portion of this sharp rise reflects global increases in food and energy prices. but, even excluding energy and food costs, the " core " inflation rate has increased from 2 percent a year ago to 5. 2 percent today. 1 / 4 bis - central bankers'speeches three major imbalances are contributing to an overheating economy and high inflation. first, the effects of the pandemic have significantly increased demand for certain categories of spending, especially for durable goods and housing. this increase in demand is occurring while supply in these sectors is being adversely affected by the pandemic. the case study for this dynamic is the automobile sector. the combination of high demand and supply shortages has led to historically low inventories. customers are lining up to buy cars but are finding the dealer lots empty. it's a seller's market, and prices have soared. new car prices are up nearly 15 percent since the start of the pandemic, and used car prices have skyrocketed, rising more than 50 percent. another prominent example is housing. with remote work policies in place, many people have relocated - buying larger homes in the south, in the suburbs, and in more affordable cities. this shift has caused demand for housing in some regions to far outstrip supply, while new housing construction has been held back by shortages in labor and materials. the imbalance between demand and supply has led to bidding wars. homes have sailed off the market at record prices, with many purchased sight unseen. this combination of high demand and crimped supply has also resulted in rapid increases in rents, especially for apartments coming onto the market. the second major imbalance is in the labor market, where overall demand far exceeds existing supply. the ratio of job vacancies to the unemployed is near its all - time high, workers are quitting jobs at a record rate, and employers are bidding up wages. this sizzling hot labor market is also related to the imbalance between demand and supply for goods and housing, as businesses seek to hire more workers to help meet the high demand. and labor supply shortages

john c williams : the right tools for our time remarks by mr john c williams, president and chief executive officer of the federal reserve bank of new york, at the international economic symposium co - hosted by the deutsche bundesbank and nabe, eltville, 10 may 2022. * * * as prepared for delivery good afternoon. i'm so pleased to be here with you today. we've waited a long time to gather in person. and i think we can all agree that meeting in this charming location was worth the wait. for most visitors, eltville is renowned for its wine and roses. but for economists, it's a place to convene for weighty discussions on monetary policy. given the events happening around the world today, there is much to discuss. we are meeting at a time of significant economic challenges and uncertainties. inflation has reached levels not seen in decades, both in the united states and in many other countries. and recent events - including the war in ukraine, lockdowns in china, and other supply disruptions related to the ongoing covid - 19 pandemic - are exacerbating near - term inflationary pressures and uncertainty about the global economic outlook. the challenge for monetary policy today is clear : to bring inflation down while maintaining a strong economy. this, of course, is at the heart of the federal reserve's dual mandate of price stability and maximum employment. although the task is difficult, it is not insurmountable. we have the tools to return balance to the economy and restore price stability, and we are committed to using them. before i go any further, i will give the standard fed disclaimer that the views i express here are my own and do not necessarily reflect those of the federal open market committee ( fomc ) or anyone else in the federal reserve system. overheating whenever i talk about monetary policy, i start with the federal reserve's dual mandate : price stability and maximum employment. with the unemployment rate back to very low pre - pandemic levels, and a variety of indicators showing the labor market is very strong, maximum employment has been achieved. but, with inflation rising to unacceptably high levels, we are far from our longer - run goal of 2 percent inflation. high inflation harms those who are most in need. too many families are now struggling to meet the increasing cost of necessities. i am resolutely focused on