for release on delivery 2 : 00 p. m. est november 9, 2023 opening remarks by jerome h. powell chair board of governors of the federal reserve system at “ monetary policy challenges in a global economy, ” a policy panel at the 24th jacques polak annual research conference, hosted by the international monetary fund washington, d. c. november 9, 2023 thank you for the opportunity to participate in today ’ s panel discussion. my assigned topic is u. s. monetary policy in the current global inflation episode. i will briefly address the u. s. outlook and then turn to three broader questions raised by the historic events of the pandemic era. u. s. inflation has come down over the past year but remains well above our 2 percent target ( figure 1 ). 1 my colleagues and i are gratified by this progress but expect that the process of getting inflation sustainably down to 2 percent has a long way to go. the labor market remains tight, although improvements in labor supply and a gradual easing in demand continue to move it into better balance. 2 gross domestic product growth in the third quarter was quite strong, but, like most forecasters, we expect growth to moderate in coming quarters. of course, that remains to be seen, and we are attentive to the risk that stronger growth could undermine further progress in restoring balance to the labor market and in bringing inflation down, which could warrant a response from monetary policy. the federal open market committee ( fomc ) is committed to achieving a stance of monetary policy that is sufficiently restrictive to bring inflation down to 2 percent over time ; we are not confident that we have achieved such a stance. we know that ongoing progress toward our 2 percent goal is not assured : inflation has inflation under our preferred measure, the 12 - month change in the total personal consumption expenditures ( pce ) price index, has declined from 6. 6 percent in september 2022 to 3. 4 percent in september 2023. the 12 - month change in the core pce measure, which excludes the volatile food and energy prices and therefore may provide a better signal of where inflation is headed, has declined from 5. 5 percent in september 2022 to 3. 7 percent in september 2023. the labor force participation rate has moved up since late last year, particularly for individuals aged 25 to 54 years, where that rate has increased by nearly 1 percentage point, on net, since december. private payrolls increased by an average

of 191, 000 per month over the 12 months ending in october 2023, down from a rate of 435, 000 per month over the 12 months ending in october 2022. meanwhile, both the quits rate and the wage premium for job switchers have returned to their pre - pandemic ranges. and while they remain above a level that would be consistent with 2 percent inflation in the longer run, broad indicators of 12 - month wage growth continue to trend lower. - 2given us a few head fakes. if it becomes appropriate to tighten policy further, we will not hesitate to do so. we will continue to move carefully, however, allowing us to address both the risk of being misled by a few good months of data, and the risk of overtightening. we are making decisions meeting by meeting, based on the totality of the incoming data and their implications for the outlook for economic activity and inflation, as well as the balance of risks, determining the extent of additional policy firming that may be appropriate to return inflation to 2 percent over time. we will keep at it until the job is done. with that, i will turn to three questions that have arisen from the receding but still elevated inflation we are experiencing today. the first question is, with the benefit of 2 - 1 / 2 years to look back, what we can say about the initial causes and ongoing policy implications of the current inflation. after running below our 2 percent target over the first year of the pandemic, core pce ( personal consumption expenditures ) inflation rose sharply in march 2021. economic forecasters generally did not see this coming, as shown by the february 2021 survey of professional forecasters, which showed core pce inflation running at or below target over the subsequent three years. 3 the real - time questions for policymakers were what caused the high inflation and how policy should react. at the outset, many forecasters and analysts, including fomc participants, viewed the sudden upturn in inflation as mostly a function of pandemic - related shifts in the composition of demand, a disruption of supply chains, and a sharp decline in labor supply. the resulting supply and demand imbalances led to large increases in the prices of a range of items most directly the median projections of q4 - to - q4 core pce inflation from the february 2021 survey of professional forecasters were 1. 8 percent, 1. 9 percent, and 2. 0 percent for 2021