. and, even though the omicron wave is posing new obstacles, some supply issues are starting to work themselves out as the economy adjusts to the changing circumstances. just as the pandemic has followed its own script, i anticipate that the dynamics of inflation will also be different than previous cycles. with growth slowing and supply constraints gradually being resolved, i expect inflation to drop to around 2 - 1 / 2 percent this year, much closer to the fomc ’ s 2 percent longer - run goal. and looking further ahead, i expect inflation to get close to 2 percent in 2023. policy actions these developments in the labor market and for inflation inform the federal reserve ’ s policy response and recent actions. in its december 2021 statement, the fomc said that it would keep the target range for the federal funds rate at 0 to ¼ percent. 2 with inflation having exceeded 2 percent for some time, the fomc said it expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the fomc ’ s assessments of maximum employment. because of inflation developments and the notable improvement in the labor market, the fomc also decided to reduce the monthly pace of its net asset purchases. with our actions, we have started the process of adjusting the stance of monetary policy away from one of providing maximum support for the economy. this movement in policy reflects the gains the economy has made since the beginning of the pandemic and the evolution of the risks to the achievement of our goals. the next step in reducing monetary accommodation to the economy will be to gradually bring the target range for the federal funds rate from its current very - low level back to more normal levels. given the clear signs of a very strong labor market, we are approaching a decision to get that process underway. the timing of such decisions will be based on a careful consideration of a wide range of data and information, with a clear eye on our maximum employment and price stability goals. conclusion as we turn a page on the new year, it ’ s clear that we have not yet reached the end of this pandemic story. but despite the challenges, i am hopeful of a continued strong recovery this year. 1 gianluca benigno, julian di giovanni, jan j. j. groen, and adam i. noble, a new barometer of global supply chain pressures, federal reserve bank of new york liberty street economics, january 4, 2022

had kept on falling. when they first set up the noodle shop, they were very serious about every minor detail – they scouted the new territories to source the best quality flour to ensure that noodles were chewy. the husband went to the fish market at dawn to buy the fresh shrimps for the wonton and the wife woke up at four in the morning to make sure the soup base ( [UNK] [UNK] ) was properly prepared. but they both had ceased doing that when the noodle shop business was doing well and such daily routines were no longer practised. so the noodles were no longer as chewy as before and the wontons were no longer tasty. as for the cafe and hot pot meals, they had very little idea on how to do them well and eventually their customers, one by one, turned away from the shop. 9. the takeaway of this story is that very often that market conditions or customer needs have changed and so we have to adapt. if a company does not or cannot adapt, then bad outcomes would ensue. however, it is more often the case that the formula and values leading to success in the past have been inadvertently eroded, if not forgotten totally. the couple in wanchai should not have forgotten what drew customers to their noodles in the first place. they had failed not because their customers had decided to eat sandwiches rather than noodles but because they forgot that it was quality that made the noodle shop bis central bankers ’ speeches successful in the first place. very often we become complacent and take things for granted after we have been successful, just like the wanchai couple did. shifting to a new product line in which we have no real expertise or niche was a recipe for disaster. the same holds true if we look at what made hong kong tick twenty or thirty years ago. many good qualities such as can - do spirit, never - say - die, openness and versatility that were cherished by hong kong people in the past seem to have faded away. keeping these good qualities, hong kong can hope to maintain its competitive edge even when the goings get rough. 10. ladies and gentlemen, the message i have for you is : while an entrepreneur should always strive to expand and grow his business, it is equally important that he should resist complacency and continue to excel in what he is doing or what he is good at. to venture into an unfamiliar universe in which one has no expertise or advantage is risky