jerome h powell : brief remarks on the us economy speech by mr jerome h powell, chairman of the board of governors of the federal reserve system, at rhode island business leaders day, washington dc, 27 september 2018. * * * good afternoon. thank you, senator reed, for the kind words and the opportunity to be a part of the annual rhode island business leaders day. and thank you, all, for sticking with the program for the last speaker of the day. the federal open market committee, the body within the federal reserve that sets monetary policy, just concluded a meeting yesterday. i plan to talk briefly about how my colleagues and i see the economy evolving and our role in keeping it healthy. importantly, i want to hear from you. i very much appreciate your views, as business people, of economic conditions where you live and work. and, of course, i will be happy to respond to questions. our economy is strong. growth is running at a healthy clip. unemployment is low, the number of people working is rising steadily, and wages are up. inflation is low and stable. all of these developments are very good signs. of course, that is not to say that everything is perfect. the benefits of this strong economy have not reached all americans. many of our countrya€™s economic challenges are beyond the scope of the fed, but we are doing all we can to keep the economy strong and moving forward. that is the best way we can promote an environment in which every american has the opportunity to succeed. each time we meet, we face the same question : how can we set monetary policy to best support job growth and low, steady inflation? for many years, this question called for very low interest rates to help an economy that had been damaged by the deep financial crisis that gripped the world 10 years ago. as the economy has steadily gained strength, the fed has been gradually returning interest rates closer to the levels that are normal in a healthy economy. we took another step on that path yesterday, with a quarter - point increase in short - term interest rates. these rates remain low, and my colleagues and i believe that this gradual return to normal is helping to sustain this strong economy for the longer - run benefit of all americans. as i mentioned, 10 years have now passed since the depths of the financial crisis a painful part of our history that cost many americans their jobs, their homes, and, for some, their hopes and dreams. in addition to holding interest

moreover, inflation expectations, those measured by both surveys and market prices, have moved lower and reside at the low end of a range i consider consistent with our price - stability mandate. the shift in the stance of monetary policy that we undertook in 2019 was, i believe, well timed and has been providing support to the economy and helping to keep the u. s. outlook on track. i believe that monetary policy is in a good place and should continue to support sustained growth, a strong labor market, and inflation running close to our symmetric 2 percent objective. as long as incoming information about the economy remains broadly consistent with this outlook, the current stance of monetary policy likely will remain appropriate. looking ahead, monetary policy is not on a preset course. the committee will proceed on a meeting - by - meeting basis and will be monitoring the effects of our recent policy actions along with other information bearing on the outlook as we assess the appropriate path of the target range for the federal funds rate. of course, if developments emerge that, in the future, trigger a material reassessment of our outlook, we will respond accordingly. in january 2019, my fomc colleagues and i affirmed that we aim to operate with an ample level of bank reserves in the u. s. financial system. 3 and in october, we announced and began to 1 / 2 bis central bankers'speeches implement a program to address pressures in repurchase agreement ( repo ) markets that became evident in september. 4 to that end, we have been purchasing treasury bills and conducting both overnight and term repurchase operations, and these efforts were successful in relieving pressures in the repo markets over the year - end. as we enter 2020, let me emphasize that we stand ready to adjust the details of this program as appropriate and in line with our goal, which is to keep the federal funds rate in the target range desired by the fomc. as the minutes of the december fomc meeting suggest, it may be appropriate to gradually transition away from active repo operations this year as treasury bill purchases supply a larger base of reserves, though some repo might be needed at least through april, when tax payments will sharply reduce reserve levels. finally, allow me to offer a few words about the fomc review of the strategy, tools, and communication practices that we commenced in february 2019. this review — with public engagement unprecedented in scope for us — is the first of its kind for the federal reserve