? when you look at the four criteria that mario draghi has set as the metrics against which we assess the sustained adjustment it ’ s clear that some conditions are not yet met. for instance we need to be sufficiently confident that the rise is durable and will not reverse, which is the second criterion. when you look at measures of core inflation there has been an increase in april but the jury is still out as to how much of it is related to seasonal effects and particularly to easter and so it ’ s too early to conclude that there would be a sizeable upward 3 / 6 bis central bankers'speeches adjustment in core inflation. the third criterion was that we want to be reassured that the upward path in inflation can be maintained even in conditions in which monetary policy becomes less accommodative. and this also is not there. the future path of inflation remains dependent on a very substantial degree of monetary accommodation. so when you look at the four criteria, the conditions are not yet met. so are the other two ticked? the first crierion is that the path of inflation is expected to reach levels below but close to 2 percent within the medium term horizon. i would say broadly yes. by and large yes, based on current staff forecasts. but it also depends on what you call the medium term. the fourth criterion is about euro area inflation, and not the inflation of any individual country, which goes without saying. so the question is more about sustainability and not being reliant on our monetary support, and these are criteria 2 and 3. so we ’ re not there yet. we ’ re not yet at a stage where this strong demand for labour would translate into higher nominal wages. but at some point we ’ ll reach that point and then wages will start rising. there are good reasons to think we ’ ll get there. we ’ ve been in this initial stage of the recovery, where it has been a lot about part - time jobs and temporary contracts. of the net employment created since the crisis, around one third has been for workers under temporary contracts and around one quarter part - time. and undoubtedly the objective of these workers is to work more, not to get pay rises. but time will come when full - time and permanent jobs are created, and then wages will rise. taking it all together is this a cyclical upswing or a structural recovery? so far it ’ s entirely cyclical. in my view, the single most important issue for european

the downside : 2 percent is our goal. second, the framework statement discusses the challenges in providing a similar fixed goal for employment. it quite rightly emphasizes that monetary policy is not a prime determinant of maximum employment, even in the long run. the committee ’ s policy stance is based on an ever - evolving assessment of the maximum level of employment in both the medium and the long term. my own assessment of the long - run unemployment rate, consistent with 2 percent bis central bankers ’ speeches inflation, is currently 5 percent – and that assessment has fallen greatly over the past 18 months. finally, the framework statement describes how the committee weighs the two mandates – promoting maximum employment and promoting price stability – against one another. importantly, it stresses that, from the point of view of monetary policy, the two mandates are typically complementary. as i noted earlier, monetary policy pushes employment and inflation in the same direction. but, as it turns out, most shocks that push employment down also tend to push inflation down over the medium run. hence, monetary stimulus designed to raise employment will also help the fomc pursue its inflation objective. i think that this point is often underemphasized in popular discussions of monetary policy. the statement notes that there may be cases in which the mandates are not complementary – meaning that inflation is expected to be above target when the unemployment rate is expected to be unduly high. the framework statement explains that, in these circumstances, the fomc will use a balanced approach to the two mandates when formulating monetary policy. in earlier speeches, i ’ ve discussed this language in some detail. in my view, this language implies that the fomc is willing to allow inflation to run above 2 percent for some time to facilitate a faster decline in the unemployment rate. possible improvements in the fomc ’ s framework statement the framework statement was adopted by the fomc in january 2012. it has been reaffirmed, with only minor wording changes, in january 2013 and again in january 2014. however, the minutes for the january 2014 meeting note that fomc participants saw the coming year as an appropriate time to consider whether the statement could be improved in any way. i concur : the time is right to consider sharpening the fomc ’ s statement of its objectives in several ways. the minutes note two possible changes along these lines. i ’ d like to explain, and express support for, both of these. first