future adjustments to interest rates will be based on the evolution of the data, the economic outlook, and the risks to achieving our goals. we will continue to be data - dependent and attuned to the evolution of economic conditions in making our decisions. with monetary policy moving to a more neutral setting over time, i expect real gdp to grow between 2 - 1 / 4 and 2 - 1 / 2 percent this year and to average about 2 - 1 / 4 percent over the next two years. i anticipate the unemployment rate to edge up from its current level of about 4 percent to around 4 - 1 / 4 percent at the end of this year and stay around that level next year. with the economy in balance and inflation expectations well anchored, i expect overall pce inflation to be around 2 - 1 / 4 percent this year, and to be close to 2 percent next year. conclusion the economy has been on a remarkable journey. in two years, the red - hot labor market has normalized, and inflation has come within striking distance of our 2 percent longerrun goal - all while employment and the economy continue to grow. we instituted and maintained a very restrictive monetary policy stance until the data gave us confidence that inflation is sustainably on course to 2 percent. with this progress toward achieving price stability, moving toward a more neutral monetary policy stance will help maintain the strength of the economy and labor market. although the outlook remains uncertain, we are well positioned to achieve our dual mandate goals. 3 / 4 bis - central bankers'speeches 1 see https : / / smokymountains. com / fall - foliage - map for the forecast of foliage in this area as well as across the nation. 2 john c. williams, a bedrock commitment to price stability, remarks at the 2022 u. s. hispanic chamber of commerce national conference, phoenix, arizona, october 3, 2022 ; john c. williams, peeling the inflation onion, remarks at the economic club of new york ( delivered via videoconference ), november 28, 2022 ; john c. williams, " peeling the inflation onion, revisited, " federal reserve bank of new york, the teller window, september 29, 2023. 3 federal reserve bank of new york, global supply chain pressure index ( september 2024 ). 4 in particular, the federal reserve bank of new york multivariate core trend inflation measure was 2. 6 % in august ( august 2024 report ), while the 6 - month change in

risks. this is a much more " top - down " approach to supervision, as we are evaluating the integrity of the managerial process in a bank rather than only testing the strength and quality of individual transactions. this helps us to determine whether a bank that is healthy today will continue to be so in the future. i ’ m pleased to note that banks have welcomed this change in approach, as we have enhanced our ability to compare the quality of one bank ’ s control structure to those of other banks that face similar risks. we thus are better able to share our views of the " best practices " we see in industry risk management. supervisory review of capital supervisory review and market discipline are two other elements that can create incentives for responsible behavior, and are of such importance to contemporary supervisory thinking that they have also been adopted as two of the three " pillars " of the basel committee ’ s proposal to revise the international standards on bank capital requirements. there ’ s been a good deal of public discussion about the first pillar, in which the committee recommended changes to the guidelines that set minimum capital requirements for banks. tonight i will concentrate on the importance of the other two in promoting financial stability. adequate capital is, of course, the foundation of a safe banking system, as it provides banks with a " cushion " against unexpected losses. supervisors aim to ensure that banks set aside sufficient capital relative to the underlying risks that each institution faces, including whether the banks are addressing the relationship between different kinds of risk. this will be no easy task, as banks under the new capital accord will increasingly rely on their own internal models to determine the kinds of risk they face and to what degree. the basel committee proposed that supervisors review the methodologies through which banks set their capital levels to ensure that banks have an incentive to develop effective processes for aligning their capital levels with their risks. when supervisors engage in a more active dialogue about those processes, we expect that banks will apply greater resources to identify and analyze more comprehensively the risks that they face, seek more accurate measures of the potential costs of those risks to their businesses, and develop more sophisticated mechanisms to mitigate those risks, including maintaining sufficient capital funds. i must emphasize that the supervisory review of capital is intended neither to replace the judgement and expertise of bank management nor to shift responsibility for capital adequacy to supervisors. on the contrary, the committee recognizes that bank managers are in the best position to understand and react to the particular risks that their institutions face. supervisory review