john c williams : good day sunshine remarks ( via videoconference ) by mr john c williams, president and chief executive officer of the federal reserve bank of new york, at the midsize bank coalition of america, 21 june 2021. * * * hello, everyone. it ’ s a pleasure to speak with you today. the summer solstice was yesterday evening, making today one of the longest days of the year. but please rest assured that i won ’ t take advantage of that and go on for too long. that way, there will be plenty of time for me to answer your questions. the good thing about virtual meetings like this one is that i get to speak with people from across the country with the click of a button. but i also know that there is nothing more heartwarming than when families and friends are finally able to get back together in person after all this time. indeed, we are starting to see “ the smiles returning to the faces, ” and i mean that now quite literally. today i ’ m going to talk about three things : first, i ’ ll briefly discuss the transition away from the london interbank offered rate ( libor ), a topic of particular relevance to this audience ; second, i ’ ll talk about the outlook for the economy and where we are in the recovery ; and finally, what that means for monetary policy. before i continue, let me give the usual disclaimer that the views i express are mine alone and do not necessarily reflect those of the federal open market committee ( fomc ) or anyone else in the federal reserve system. the final countdown i ’ ve spoken about the libor transition many times before, 1 but the message bears repeating, especially now that we ’ re only about six months away from moving off of libor, once and for all. during this critical time, it ’ s important to focus on building a strong and robust foundation for the future so that we never have to go through a transition like this one again. that ’ s why when it comes to choosing a libor replacement, you need to be confident that the rate you use is appropriate and will hold up even under stress. at the financial stability oversight committee ( fsoc ) meeting earlier this month, fsoc members highlighted risks around reference rates that share many of libor ’ s shortcomings, such as being based on thinly - traded markets. 2 the alternative reference rates committee ( arrc ) studied this issue

i cannot stress enough that we still have a long way to go to get back to full strength. for example, there are still over seven million fewer jobs today than before the pandemic. underlying these numbers are sizable movements of people in the labor market. employers are hiring at a rapid clip, with nearly seven million people moving from the ranks of non - employed to employed per month. at the same time, people are leaving jobs in elevated numbers, either to look for new work or to exit the labor force altogether. these big movements in the labor market, both in hires and quits, reflect the extraordinary nature of the pandemic, as employers and workers adapt to rapidly changing circumstances. what should we take from all of this? clearly, the demand for labor is very strong — we hear that from employers who are finding it hard to fill all their openings — and a lot of people are getting hired. at the same time, the numerous people leaving their current jobs contribute to the recordhigh level of postings as employers look to fill newly vacant positions. we won ’ t see all the vacancies filled overnight — it takes time for employers to fill open positions. with the strong, sustained demand for workers and progress on hiring, i am confident that we will see continued strong job gains going forward. the last aspect of the outlook that i ’ ll speak about is inflation. recent inflation data have moved up sharply, which has garnered a great deal of attention. my view is that the spike in inflation mostly reflects the temporary effects of the surprisingly rapid opening of the economy. given the importance of this issue, i will explain my thinking in more detail. with the economy reopening, people are once again enjoying activities, such as travel, that they postponed during the worst days of the pandemic. with the return of these activities, prices for things like airfares and hotel rooms have rebounded. but we must keep in mind that many of these increases are simply reversals of the large declines we saw last year when the pandemic first took hold. once these prices have fully adjusted to the reopened economy, they shouldn ’ t continue to increase at recent elevated rates, and their effect on overall inflation should subside. in addition, we have seen surges in demand for certain goods that have outstripped available supply. the clearest example is used cars, which are in very high demand, reflecting factors such as the needs of a remote workforce, stimulus