mr. meyer gives his views on the us economic outlook and the challenges facing monetary policy remarks by mr. laurence h. meyer, a member of the board of governors of the us federal reserve system, before the economic strategy institute, washington, d. c. on 8 / 1 / 98. three forces are likely to shape the outlook to which monetary policy will have to respond in 1998. the first is the momentum in the cyclical expansion. the second is the set of factors that have recently restrained inflation, despite persistent strong growth and a decline in the unemployment rate to the lowest level in a quarter century. and the third is the spillover from the asian turmoil. the dominant story in 1997 was the near stand - off between the first two forces. the strength of the cyclical upswing kept monetary policy alert, but - - given the quiescence of inflation - mostly on hold, during the last year. the continued robustness of the expansion into the fourth quarter, including further tightening of the labor market in october and november, might, in my judgment, have tilted the balance toward the case for additional monetary restraint, notwithstanding the continued excellent inflation readings. but, at that very time, the growing dimension of the asian turmoil began to cast a shadow over the forecast for 1998. it has reinforced prospects for some spontaneous slowing of the economy, introduced a downside risk that had not previously been an important consideration in policy deliberations, and added an additional restraining force on inflation immediately ahead. the task of the federal reserve in the coming year will be importantly shaped by the magnitude of the downdraft from the asian crisis, how it interacts with the remaining cyclical strength in domestic demand, and the degree to which its effects on import and commodity prices help keep inflation in check. but before i return to the prospects for 1998 and the challenges for monetary policy, i will offer a retrospective on 1997. let me emphasize that the views i present this afternoon, both about the outlook and about monetary policy, are my own views and should not be interpreted as the views of the fomc. retrospective on 1997 in my days as a forecaster, i found it a useful discipline to begin the year by critically reviewing the experience of the previous year, identifying the key themes that shaped the outlook, trying to learn from the forecast errors, and drawing implications for the outlook. i will follow this practice this morning. the most dramatic feature of the 1997 macro experience was clearly the combination of faster - than

jerome h powell : introductory comments – roundtable on the interim report of the alternative reference rates committee introductory comments by mr jerome h powell, member of the board of governors of the federal reserve system, at the roundtable on the interim report of the alternative reference rates committee, sponsored by the federal reserve board and the federal reserve bank of new york, new york city, 21 june 2016. * * * i want to thank you all for coming today, and i also want to thank the alternative reference rates committee ( arrc ) for all its work in developing its interim report. this report marks a new stage in reference rate reform. 1 reference benchmarks are a key part of the financial infrastructure. about $ 300 trillion dollars in contracts reference libor alone. but benchmarks were not given much consideration prior to the recent scandals involving attempts to manipulate them. since then, the official sector has thought seriously about financial benchmarks, conducting a number of investigations into charges of manipulation, publishing the international organization of securities commission ’ s ( iosco ) principles for financial benchmarks and, through the financial stability board ( fsb ), sponsoring major reform efforts of both interest rate and foreign exchange benchmarks. 2 the institutions represented on the arrc have also had to think seriously about these issues as they have developed this interim report. now, we need end users to begin to think more seriously about how they use benchmarks and the risks they are taking on by relying so heavily on a reference rate – in this case u. s. dollar libor – that is less resilient than it needs to be. in saying this, i want to make it clear that libor has been significantly improved. ice benchmark administration is in the process of making important changes to its methodology, and submissions to libor are now regulated by the united kingdom ’ s financial conduct authority. however, the term money market borrowing by banks that underlies u. s. dollar libor has experienced a secular decline. as a result, the majority of u. s. dollar libor submissions must still rely on expert judgement, and even those submissions that are transaction - based may be based on relatively few actual trades. this calls into question whether libor can ultimately satisfy iosco principle 7 regarding data sufficiency, which requires that a benchmark be based on an active market. that principle is a particularly important one, as it is difficult to ask banks to submit rates at which they believe they could borrow on a daily basis if