lael brainard : community investment in denver speech by ms lael brainard, member of the board of governors of the federal reserve system, at the federal reserve bank of kansas city, denver branch, denver, colorado, 15 october 2018. * * * good afternoon. i am delighted to be here in denver for a few days to visit with community leaders working to support affordable housing, workforce development, and small businesses across the mile high city. so far, i have had a chance to hear firsthand about the housing affordability challenges facing many denver families, which are requiring some families to make difficult choices between paying rent and paying for other necessities, and the associated challenges of homelessness. i have also had the opportunity to see the incredible work underway in denver to ensure that individuals and families in need have access to safe, affordable shelter and the healthcare and case management services they need to get back on their feet. not only is denver's approach to service delivery a national model, but your use of social impact bonds to fund those programs is also at the forefront of innovation in the community development sector. i can see there is a lot of pride in what you are accomplishing locally, and i look forward to seeing more groundbreaking work during the remainder of my time here. every few months, i try to make a visit such as this one to better understand how different communities across the country are experiencing the economy. promoting community development is one of the key purposes and functions of the federal reserve, and it requires that we have a strong understanding of the impacts of financial policies and practices in communities in all of our districts. 1 i have heard about the important role the community reinvestment act ( cra ) has played in strengthening community investment, so i am happy to have this opportunity to learn about your perspectives, as bankers here in denver, on opportunities for further improvement. this roundtable is the first of several that the federal reserve system will host in the next several months to hear directly from bankers, community members, practitioners, researchers, and others about improving the cra's effectiveness in making credit available to lower - income areas. we are inviting representatives of other banking regulatory agencies to join us so that we can all benefit from learning from different local experiences with the cra. our hosts at the reserve banks will be taking notes, and a summary of the findings from this outreach initiative will be made public. before we get started, i want to say a few words about the

forecast presented to the mpc at the most recent mpc meeting prior to the publication of the mpr. furthermore, in our statements which are released after each mpc meeting, we give details of the forecast so that market participants have a good idea of the timing and level at which inflation is expected to change direction. we also indicate where we expect inflation to be at the end of the forecast period. more recently we have also published our core model following numerous requests from private sector analysts and forecasters. we have also provided an assessment of the performance of the model over time which shows that the bank ’ s model has performed well, particularly relative to other private sector forecasts. the obvious question to ask is, should these analysts not also be transparent with their models? would it not improve the quality of debate or assist in the development of better models if we could see how other forecasters generate their forecasts? i have noted a deafening silence when i raise this issue with market economists. 6. conclusion i will not attempt to forecast the winner of the competition. i congratulate all of the contestants. the winner is the forecaster who has most accurately forecast the month - ahead inflation over the past year. although forecasting near - term inflation is useful, as the financial times columnist, sir samuel brittan argued, this type of forecast tells us more about the present and the recent past than about the future. from a monetary policy perspective, we are primarily concerned with forecasting over a longer time horizon. there is nothing monetary policy can do about the latest inflation numbers. monetary policy should be judged on whether appropriate actions are being taken today to ensure that inflation will be within the target range in 18 - 24 months time. for this we need to have a good medium - term forecast to provide us with a coherent framework. despite all the problems associated with forecasting, they remain integral to policy decisions, and we will continue to use them. the models have become increasingly sophisticated, but the future is inherently uncertain. at the same time the economic and political environment has also become more challenging and difficult to predict. unfortunately, as is sometimes said, the future is not what it used to be. thank you.