john c williams : no man is an island remarks by mr john c williams, president and chief executive officer of the federal reserve bank of new york, at the 2019 asia economic policy conference, federal reserve bank of san francisco, san francisco, california, 14 november 2019. * * * as prepared for delivery “ no man is an island entire of itself, ” wrote the poet john donne in 1624. almost four centuries later, his words still ring true. and they are particularly salient when it comes to the financial fortunes of the global economy. today i ’ m going to explore the commonalities and interconnectedness of the global economy, and what that means for the outlook in the united states. but before i delve into these ideas, i want to say what a pleasure it is to be back at the san francisco fed, among so many friendly faces. the asia economic policy conference is always a fascinating day, and i ’ d like to thank mary daly for the invitation to speak, and zheng liu and mark spiegel for putting together an outstanding program. i knew i was back in san francisco when this morning i spent 20 minutes in line, waiting to spend five dollars on a cup of coffee. this is one thing for which inflation appears to be alive and well. before i explore issues like inflation in any greater depth, i should give the standard fed disclaimer that the views i express today are mine alone and do not necessarily reflect those of the federal open market committee or others in the federal reserve system. the u. s. economy if monetary policy represents a set of scales, on one side we have a strong u. s. economy with unemployment near a 50 - year low, and on the other, a more challenging and uncertain landscape. gdp looks to grow around 2 percent this year, and unemployment has stayed at or near historically low levels, boosted by solid job growth. at the same time, the federal open market committee ( fomc ) has moved to cut rates three times. what ’ s going on? there are three trends i ’ ll explore today, which all demonstrate the commonalities and the interconnectedness of the global economy. the first is the low neutral rate of interest, or r - star, the second is slowing global growth, and the third is rising geopolitical tensions. all are critically important to the long - term prospects of the u. s. economy, and each tells an important story about the conditions we ’

whether this credit flows from banks, nonbank financial institutions, or institutional investors. why is this so? the answer is simple. it is because the credit intermediation process is ultimately what determines how well our economies function and therefore how well our economies are able to grow and allow their citizens to prosper. when the credit intermediation process does not work well, when there are disruptions to the supply of credit to the economy, as history has amply shown, the costs for our businesses and our people can be enormous in terms of lower output and fewer jobs. a well - functioning credit intermediation process is, in short, critical to the sustainability of any economy ’ s success. it is for these reasons that central bankers are interested in the flows of credit from the global securities markets, just as we have needed to know about the flows of credit from the banks whose operations we are charged with overseeing. at the end of the day, the flow of credit from securities markets has the same impact on our respective societies as that from banks. therefore, central bankers have an obligation to understand the nature of these flows and the risks that they raise. crucial to our obligations to our citizens is the need to be certain that these credit markets work smoothly and that credit flows efficiently from those most willing and able to bear the risks to those most able to put the funds to good use. this is as true for the united states as it is for any other country, developed or developing. does this mean that central banks believe that capital markets should be supervised in the same ways banks are overseen? clearly the answer to this question is no. this is not our role. in my view, central banks broadly have two main responsibilities with respect to the global debt markets. the first is to enhance the price discovery process by promoting transparency in their own actions. the second is to ensure that the banks, as providers of liquidity, perform their proper role in supporting the trading process by making sound credit decisions. in the united states, the federal open market committee or fomc has a pronounced effect on the fixed - income market, both through its policy decisions and in the way the federal reserve conducts monetary policy. indeed, an important part of the price discovery process is the anticipation of the federal reserve ’ s future actions. because the federal reserve is such a critical player in the market, it is important that it not create unnecessary uncertainty. that is, the federal reserve has a responsibility to be as transparent as