make the tough choices that will shape detroit ’ s future. let ’ s turn to detroit. as the video illustrates, detroit is finding new solutions to the decades - long problem of stabilizing its neighborhoods and attracting new residents. the detroit works project aims to reimagine the city ’ s geographic footprint and service range, based on the current smaller population. detroit ’ s story reminds us that when ideas are controversial and hard choices must be made, community input and buy - in is critical for success. to this end, the project has hosted extensive community meetings and created a leadership taskforce to map out future growth and investment areas. conclusion at the federal reserve, we have been working to understand the issues, help craft national policies, and collect data that can be used by government agencies and nonprofits. but sometimes a research paper or a speech doesn ’ t give you a true picture of what the foreclosure crisis really looks like. when i began my role as a governor, i travelled to the 12 reserve bank districts to see firsthand what was happening across the country. it was an eye - opening experience – one that has informed my perspective as a governor. and these stories from around the country can help provide the same type of context for researchers and policymakers. here at the federal reserve we are learning more each day about the complex task of stabilizing communities in the wake of the crisis, and research and analysis of what is working is critical. from these video “ reports from the field, ” we ’ ve learned that bis central bankers ’ speeches collaborations and partnerships help achieve success ; strategic targeting of limited resources may be necessary ; data can help focus a strategy ; community input and buy - in are critical for long - term planning ; and different approaches will work for diverse challenges and places. the fed will continue to identify the needs and challenges facing communities by fostering a dialogue for a better understanding of community development practices. as the research conference unfolds over the next two days, we ’ ll learn more about what community development may look like going forward. while research and evaluation remain central to the fed ’ s contribution, the system is equally well positioned to share best practices and foster partnerships : connecting at the local level, building networks, raising awareness of successes, and using data and research to evaluate what ’ s working and to suggest improvements. we are looking forward to a lively conversation, and we thank you for joining us. bis central bankers ’ speeches

labor costs is quite elevated, further encouraging firms to reach for market share as well as providing scope for workers ’ real wages to rise without pushing up inflation. overall, the tenor of the inflation outlook has shifted over recent quarters. solid growth in economic activity, higher prices in some sectors, and hints of the stabilization of overall inflation, along with perceptions by businesses that “ pricing power ” may be returning, are marking a transition from asymmetric risks of additional disinflation to more nearly balanced risks of rising and falling inflation. this transition is another key piece of the backdrop for monetary policy. monetary policy strategy as i noted at the outset of my talk, the federal funds rate is quite low : it is low relative to interest rates associated in the past with sustained high employment and stable prices ; and it is low relative to recent rates of economic growth - a disparity that has attracted increasing attention from some observers. in fact, the low funds rate has been necessary to promote growth that, to date, has been just sufficient to begin reducing substantial margins of slack in resource utilization. still, as my analysis indicates, the unusual shocks that have impinged on demand and bolstered potential supply over the past several years are abating, or should soon do so. as the output gap closes, economic stability will require that interest rates eventually move up from unusually low levels if we are to preserve price stability. the fomc stated again last week that it believes it can be patient in removing its policy accommodation. one set of reasons for patience in my view can be found in the levels of inflation and resource utilization likely to prevail for a while. as i have already noted, a considerable gap exists today between actual and potential output, and consumer price inflation is very low. in addition, the transitions i have discussed in aggregate demand, potential aggregate supply, and inflation are gradual processes. the move to solid growth of demand and some easing in the growth of potential supply are unlikely to lead to a rapid closing of the gaps in resource utilization or a marked rise in inflation. the risks around the likely course of the economy, and the costs and benefits of erring to one side or the other of the anticipated outcomes, also support a strategy of patience. given our uncertainty about the rate of growth of potential supply, actually observing a closing output gap will be particularly important for policymakers. given our uncertainty about the level of potential supply and thus the level of the output gap, observing stable inflation