for release on delivery noon edt may 30, 2019 sustaining maximum employment and price stability remarks by richard h. clarida vice chair board of governors of the federal reserve system at the economic club of new york new york, new york may 30, 2019 thank you for that generous introduction. i have attended economic club of new york events many times over the years and have always enjoyed the programs that feature engaging speakers sharing important insights on timely topics. it is a distinct honor to appear before you today from this side of the podium, and i do hope my remarks will contribute to this proud tradition. 1 in july, the current u. s. economic expansion will become the longest on record — or at least the record since the 1850s, which is as far back as the national bureau of economic research tracks u. s. business cycles. 2 in anticipation of that milestone, i would like to take stock of where the u. s. economy is today, to assess its future trajectory, to review some important structural changes in the economy that have occurred over the past decade, and to explore what all of this might mean for u. s. monetary policy. the federal reserve has a specific mandate assigned to it in statute by the congress, which is the dual mandate of maximum employment and price stability. as i speak today, the economy is as close to achieving both legs of this dual mandate as it has been in 20 years. my colleagues and i understand that our responsibility is to conduct a monetary policy that not only is supportive of and consistent with achieving maximum employment and price stability, but also, once achieved, is appropriate, nimble, and consistent with sustaining maximum employment and price stability for as long as the views expressed are my own and not necessarily those of other federal reserve board members or federal open market committee participants. i would like to thank brian doyle, david lopez - salido, and bernd schlusche for their assistance in preparing this speech. see the nber ’ s “ u. s. business cycle expansions and contractions ” at https : / / www. nber. org / cycles. html. - 2possible. and thus, the title of my talk today is “ sustaining maximum employment and price stability. ” midway through the second quarter of 2019, the u. s. economy is in a good place. over the past four quarters, gross domestic product ( gdp ) growth has averaged 3. 2 percent, which compares with an average growth rate of

or even a moratorium on any deals. to others, these numbers illustrate a narrow view of bank services in a diverse and complex marketplace. therefore, they also highlight the importance of including the full “ cluster of commercial banking products and services ” provided to customers in a banking market, since these numbers only provide information on banks. as any quick scan of the marketplace for financial products and services will tell you, in recent decades, the number of competitors to banks, if anything, has significantly increased, rather than decreased. with that in mind, i ’ d like to discuss what i see as some of the key changes in the competitive landscape for banking products and services. i will also offer some ideas on - 7how i think we can modernize our analysis of competition while still preserving a vibrant and competitive marketplace that promotes innovation and enhances consumer choice. credit unions let ’ s start with the changes that have been taking place in the credit union industry. historically, credit unions were not seen as competitors to banks because they offered fewer small business and commercial lending products and were limited in their customer base because of field of membership restrictions. for this reason, credit union deposits were not factored into the initial competitive screens at all under the 1995 bank merger guidelines. however, in the past few decades, we ’ ve seen credit unions expand their fields of membership. many credit unions now go well beyond the traditional “ common bond ” requirements for membership and increasingly allow membership based on geography. we ’ ve also seen an increase in the percentage of credit unions offering small business loans. the national credit union administration has reported that 94 percent of credit unions with $ 500 million or more in assets offer business loans. total business loans at federally insured credit unions grew at an annualized rate of 14 percent from 2004 through 2015. 6 underscoring just how much credit unions are competing directly with banks, particularly community banks, is the recent increase in acquisitions of community banks by credit unions. 7 credit unions today are much more likely to compete directly with traditional banks offering the full “ cluster ” of banking products and services than they did member business loans ; commercial lending, 81 fed. reg. 13, 529, 13, 530 ( march 14, 2016 ). nineteen credit unions acquired commercial banks in 2019, up from seven in 2018 and three in 2017. - 8in 1995, which supports the argument that our analysis needs to give more weight to competition from credit unions. online deposit gathering another development impacting the competitive landscape for