’ s intentions, given its forecasts. the june sep shows that 15 of 19 participants see the first rate increase happening in 2015 or 2016. the path of rates will ultimately depend on the path of the economy, and the committee has said that the first rate increase will not happen until a considerable time has elapsed after asset purchases have been concluded. thus, to the extent the market is pricing in an increase in the federal funds rate in 2014, that implies a stronger economic performance than is forecast either by most fomc participants or by private forecasters. we have made significant strides in communication in recent years. the unemployment and inflation thresholds i discussed earlier, as well as the communication around asset purchases, are all designed to improve public understanding of the committee ’ s intentions. but communications are bound to be imperfect, and changes in the outlook can still lead to adjustments in asset prices. thus, some volatility is unavoidable, and indeed is a necessary part of the process by which markets and the economy adjust to incoming information. the path ahead for monetary policy last week, the chairman provided greater clarity about the path of asset purchases. specifically, the chairman noted that, if incoming data are broadly consistent with the committee ’ s sense of the economic outlook, the committee currently anticipates that it would be appropriate to moderate the monthly pace of purchases later this year. if the subsequent data remain broadly aligned with the committee ’ s current expectations for the economy, the committee could continue to reduce the pace of purchases in measured steps through the first half of next year, ending purchases around mid - year. at that time, the unemployment rate would likely be in the vicinity of 7 percent, with growth consistent with further improvements and inflation heading back toward our objective. if unemployment reaches the 7 percent range, that would constitute a substantial improvement from the 8. 1 percent unemployment rate that prevailed when the committee announced the current program of asset purchases. i want to emphasize the importance of data over date. if the committee ’ s economic outlook is broadly realized, there will likely be a moderation in the pace of purchases later this year. if the performance of the economy is weaker, the committee may delay before moderating purchases or even increase them. if the economy strengthens faster than the committee anticipates, the pace of purchases may be moderated somewhat more quickly. the path of purchases is in no way predetermined ; we will monitor economic data and adjust our purchases as

of trade openness or the process of automation and technological change. this could be accomplished through compensatory taxes or, as long as there is fiscal space, an increase in the spending on activities with high social returns, such as education and health. at the same time, some of the implemented policies should aim at minimizing the welfare loss associated with the required reallocation process, for instance, by providing workers with additional training. but one should be weary of policies that would sacrifice the substantial welfare gains from trade, and for that matter from automation. confronting the redistributive policy challenges is better than simply pushing back trade or technological advancement. hence, in my view, instead of trying to revert decades of economic integration, the way to move forward is to tap further into the as yet unexploited gains that can be attained through a deeper economic integration of the region. for example, the recent structural reform efforts in mexico have opened up certain sectors that were previously closed off to foreign investors, such as the oil and electricity sectors. strengthening the bilateral relationship between the us and mexico would mean more investment and employment in projects like the two refineries that are being built in texas to serve the mexican market or the wind farms that are being built in baja california to supply california with electricity. additional opportunities for gains from deeper integration could be attained if nafta rules can be simplified so that more exporters can take advantage of the benefits of belonging to a free - trade area. mexico is willing to work with the us and canada to build on and extend nafta to the benefit of all parties involved. in fact, mexico has been working hard to keep a sound macroeconomic framework and to improve its microeconomic structure in order to become an even more attractive destination for investment and to further promote the economic integration of the region. in this sense, mexico is committed to proving that it can be a trusted partner in the quest for growth and prosperity for the whole region. appendix graph 1. total gdp : mexico annual % change, s. a gatt china enters wto nafta financial crisis average = 3. 46 average = 2. 36 average = 2. 22 average = 2. 13 average = 2. 02 average ( excl. 09 - 10 ) = 2. 73 average ( excl. 95 - 96 ) = 4. 91 - 2 - 4 - 6 - 8 s. a. / seasonally adjusted figures. note : the red