john c williams : the joys of spring remarks by mr john c williams, president and chief executive officer of the federal reserve bank of new york, at the 21st annual bronx bankers breakfast, bronx, new york, 10 may 2019. * * * as prepared for delivery it ’ s an honor to be kicking off bronx week, and i ’ d like to thank borough president ruben diaz, jr., for the kind invitation. i first visited the bronx — and first met ruben — back in november, when i also spent time with students discussing their plans for the future. i was particularly impressed by their talent, energy, and enthusiasm, which is a true reflection of this vibrant and proud community. today i ’ m going to share some brief remarks on the national and global economy. i ’ ll then discuss what that means for monetary policy today and going forward. for me, the most interesting part of this event is hearing and responding to your questions, so please, don ’ t be shy when i open the floor for discussion. i ’ ve warned you that monetary policy is on the agenda, so before i go any further, i have to give the usual fed disclaimer that everything i say reflects my own views and not necessarily those of the federal open market committee or anyone else in the federal reserve system. the u. s. economy with that out of the way, let me start by saying the u. s. economy is in a very good place. late last year, as the long, dark winter closed in, there were considerable jitters in financial markets, with some observers fretting that the economy may be on the verge of a hard landing. indeed, there was a lot of talk about the possibility of a recession looming. i am happy to report that the economy has emerged from the new york freeze. the sun is out, the tulips and the cherry blossom are now in full bloom and the picture of the economy is similarly rosy. in the first four months of the year, the u. s. economy added over 800, 000 jobs, and the unemployment rate is now 3. 6 percent — the lowest level in nearly 50 years. the latest gdp numbers indicate that the economy remained in high gear through the first quarter, with growth clocking in at an impressive 3. 2 percent annual rate. despite this very strong economy, we are not seeing any signs of inflationary pressures. in fact, the latest inflation data have come in lower than expected,

example concerns the frequency of examinations. some firms proposed lengthening the period of time between examinations, including increasing the asset size limit for community banks to qualify for the 18 - month cycle. in response, the agencies supported a change to statutes that govern examination frequency. subsequent legislation enacted in 2015 permitted qualifying firms under $ 1 billion in total asset size to be subject to an 18 - month examination cycle for safety and soundness examinations. the final rule for this legislation was issued at the end of last year and is now in force. i should emphasize that a longer exam cycle does not mean we are neglecting our supervisory responsibilities and we will remain focused on the core drivers of safety and soundness. that is our responsibility as supervisors. while it was some time ago, it is useful to recall the fdic study of the financial crisis in the 1980s that highlighted how quickly financial health can deteriorate and concluded that delayed recognition via less - frequent examinations contributed to the scale of losses and failures in the 1980s. 3 in addition to our review of regulations, supervisors periodically review existing supervisory guidance to evaluate relevance and effectiveness. the board completed a policy review of the supervision programs for community and regional banking organizations to make sure that these programs and related supervisory guidance appropriately align with current banking practices and risks. as a result of this review, the board eliminated 78 guidance letters that are no longer relevant. as i mentioned, one of the core objectives of supervision and regulation is to support resilience in supervised firms so that they can contribute to the sustained provision of credit and other financial services. we strive to do that in the most effective and efficient manner possible. i mentioned just a few examples of our work in this area, and i look forward to continued dialogue on this key topic. conclusions we at the federal reserve bank of new york and the federal reserve system have a strong interest in understanding the issues facing community banks and ensuring that they continue to play their critical role in the u. s. financial system. we hope that today ’ s conference sparks an informative discussion around many of those issues. 5 / 6 bis central bankers'speeches i ’ ll conclude by noting that this conference is just one of several initiatives to encourage communication and outreach with the industry. the federal reserve board also has initiated numerous industry outreach opportunities to provide resources on key supervisory policies, including the development of two programs — " outlook live ” and “ ask the fed " — as well as the publication of three newsletters — community banking connections, consumer compliance