jerome powell : welcoming remarks " expanding the impact : increasing capacity and influence " welcoming remarks by mr jerome h powell, member of the board of governors of the federal reserve system, at " expanding the impact : increasing capacity and influence ", the 2017 interagency minority depository institution and community development financial institution bank national conference, los angeles, california, 5 april 2017. * * * thank you, donna. good morning and welcome to the federal reserve. we are honored to have you here today as we host the biennial interagency minority depository institution ( mdi ) and community development financial institution bank conference. my colleagues from the federal reserve bank of san francisco and i are especially honored to be hosting you in los angeles. as you probably know, all of the previous interagency mdi conferences have been held on the east coast, mainly in washington, d. c. however, because the largest concentration of minority banks is located here in southern california, it seemed natural to bring this conference west. the federal reserve seeks to support mdis in a number of ways, including our partnership for progress, our program for outreach and technical assistance to mdis. both the office of the comptroller of the currency and federal deposit insurance corporation share our goal of preserving and promoting mdis because you are critical institutions to the communities you serve and the larger u. s. economy. and i note that congress has also recognized your importance, mandating our respective agencies to help support mdis. from the perspective of someone who sits on the federal open market committee, i see many ways that the federal reserve can not only support mdis but is itself also supported by them, and i would like to talk about four of these ways today. first, half of our monetary policy mandate is maximum sustainable employment. that means that we need to be aware of employment trends across all communities in america, not just the top - line averages, since unemployment rates vary significantly across races and geographies. for the first time, last year, we put into our monetary policy report to congress a section that detailed how post - recession economic gains have been distributed across races. 1 you, as mdis, are committed to understanding and serving these diverse communities. i know that, for example, your small business loans to minority business owners make a difference in the employment rates of minority communities. i thank you for that work, and we will continue to work closely with you to better understand the employment dynamics of underserved

references an annual inflation rate of 2 percent as most consistent with our price - stability goal over the longer run. the fed pursues its monetary policy goals using a variety of tools, but the main policy tool is the federal funds rate, a key interest rate for overnight borrowing by commercial banks that influences other interest rates throughout the economy. lower interest rates tend to stimulate demand — for housing, cars and other durable goods, and business investment, for example — which boosts economic activity and has the potential to push up inflation. higher interest rates tend to slow the economy and tend to push inflation down. in normal times, monetary policy decisions are made eight times each year through votes of members of the federal open market committee ( fomc ). 2 in preparation for each meeting, the fomc participants analyze the latest economic data and assess where the economy stands relative to our two mandated goals. and, because monetary policy decisions take some time to flow through to, or have their full effect on, the economy, fomc participants must form a view about how they think the economy will evolve in the coming months and years. in addition to understanding where the economy is at any given point in time, making a judgment about where it is headed is also crucial to monetary policy. 1 / 6 bis central bankers'speeches as i have learned in my nearly three years and almost 20 meetings as an fomc member, economic forecasting is challenging, to say the least. despite all of the data and economic models at our disposal, the economy is exceedingly complex, the product of countless decisions made every day by human beings, who have varied goals and motives. economic data, sometimes received with a considerable time lag, can give us only a rough, backward - looking picture of the economy, and judging where the economy is headed in the future is even more difficult. even the most accurate forecasts about the economy are often wrong, simply because of the uncertainty that is inherent in the task of interpreting and predicting future economic conditions. yet our responsibility is to do just that — make predictions about how economic activity will evolve, and act on those forecasts in real time, to ensure that monetary policy can help support a strong economy. as part of this process, fomc members also consider the different ways that our outlook may be wrong. we consider a number of alternative scenarios for the future and try to manage the relative risks of a policy decision if the future does not turn out as expected. i