john c williams : remarks at the 42nd annual central banking seminar remarks by mr john c williams, president and chief executive officer of the federal reserve bank of new york, at the 42nd annual central banking seminar, federal reserve bank of new york, new york city, 1 october 2018. * * * it is my pleasure to welcome you to the federal reserve bank of new york to participate in the 42nd annual central banking seminar. this is truly an impressive group — our largest ever — with so many countries, institutions, and central bank departments represented. the program and speakers are similarly wide - ranging : you can expect to hear not only about the global economy, monetary policy, financial stability and supervision, technology, operations, and payments, but also about issues outside the usual central banking orbit. we see this breadth of coverage and participation as a key distinction and strength of the seminar. the long history of the central banking seminar reflects the new york fed ’ s deep commitment to strengthening central bank cooperation over the long term. such cooperation is vital to better understanding the world around us and the execution of our responsibilities. those relationships are also essential during times of financial stress, and were critical to managing events during the global financial crisis. a broad perspective is absolutely necessary for central bankers today given the tremendous array of issues we face, the high level of economic and financial integration across the globe, and a range of uncertainties within and outside our traditional remit. a short list of current issues includes policy normalization in the advanced economies ; potential spillovers to emerging market economies ( emes ) ; fragility in some emes ; ongoing economic and financial adjustment in china ; trade policy tensions ; and brexit. so, there should be no shortage of things to talk about. diverse perspectives often lead to better thinking and outcomes, and given the variety of experiences represented today, i expect a very fruitful set of discussions. in my remarks today, i will focus on monetary policy, highlighting the evolution of federal reserve policy actions and communications as we ’ ve exited from the extraordinary stimulus that followed the crisis and recession. the good news is that 10 years after the crisis, the u. s. economy is doing very well overall. from the perspective of the fed ’ s dual mandate of maximum employment and price stability, quite honestly, this is about as good as it gets. as a result, the fed has naturally been moving toward more “ normal ” monetary policy. and that brings me to a key theme of my remarks

today : what does “ normal ” monetary policy look like? before i go any further, i should note that what i have to say represents my own views and not necessarily those of the federal open market committee ( fomc ) or anyone else in the federal reserve system. strong, strong, strong my take on the economy is well summarized by the most recent fomc statement, in which we used variations on the word “ strong ” five times in only four short paragraphs. the statement references “ strong ” labor market conditions, “ strong ” job gains, and a “ strong ” rate of growth in economic activity, household spending and business fixed investment. 1 although this may suggest that we really need to consult a thesaurus, at least we can ’ t be accused of ambiguity. the fed has attained its dual mandate objectives of maximum employment and price stability 1 / 5 bis central bankers'speeches about as well as it ever has, with most indicators pointing to a very strong labor market indeed — including an unemployment rate below 4 percent — and an inflation rate very near our longer - run goal of 2 percent. with fiscal stimulus and favorable financial conditions providing tailwinds to the economy, the outlook is for more of the same. let me put some hard numbers to that : i expect real gdp to increase by 3 percent this year and by 2. 5 percent in 2019. this above - trend pace of growth should lead to continued solid job gains and further declines in unemployment. i expect the unemployment rate to fall slightly below 3. 5 percent next year, the lowest level in nearly 50 years. in keeping with the strong economy, i expect price inflation to edge up a bit above 2 percent, but don ’ t see any signs of greater inflationary pressures on the horizon. and, i continue to expect that further gradual increases in interest rates will best foster a sustained economic expansion and achievement of our dual mandate goals. i should hasten to add that not everyone has shared equally in this otherwise strong economy. the unevenness of the recovery is evident in my travels around the second district, where, for example, the economic recovery in upstate new york continues to lag the nation as a whole. so, while the national economy is in good shape, longer - run economic challenges have meant that not all americans have benefited from the improvement in the economy. beyond supporting a strong overall economy, monetary policy has limited reach into these issues, which are best addressed through other means, such as investments in education