improvement and customization. we are closely monitoring recent events where risks in the system have crystallized and many crypto investors have suffered losses. despite significant investor losses, the crypto financial system does not yet appear to be so large or so interconnected with the traditional financial system as to pose a systemic risk. so this is the right time to ensure that like risks are subject to like regulatory outcomes and like disclosure so as to help investors distinguish between genuine, responsible innovation and the false allure of seemingly easy returns that obscures significant risk. this is the right time to establish which crypto activities are permissible for regulated entities and under what constraints so that spillovers to the core financial system remain well contained. insights from recent turbulence several important insights have emerged from the recent turbulence in the cryptofinance ecosystem. first, volatility in financial markets has provided important information about crypto ’ s performance as an asset class. it was already clear that crypto - assets are volatile, and we continue to see wild swings in crypto - asset values. the price of bitcoin has dropped by as much as 75 percent from its all - time high over the past seven months, and it has declined almost 60 percent in the three months from april through june. most other prominent crypto - assets have experienced even steeper declines over the same period. contrary to claims that crypto - assets are a hedge to inflation or an uncorrelated asset class, crypto - assets have plummeted in value and have - 3proven to be highly correlated with riskier equities and with risk appetite more generally. 2 second, the terra crash reminds us how quickly an asset that purports to maintain a stable value relative to fiat currency can become subject to a run. the collapse of terra and the previous failures of several other unbacked algorithmic stablecoins are reminiscent of classic runs throughout history. new technology and financial engineering cannot by themselves convert risky assets into safe ones. third, crypto platforms are highly vulnerable to deleveraging, fire sales, and contagion — risks that are well known from traditional finance — as illustrated by the freeze on withdrawals at some crypto lending platforms and exchanges and the bankruptcy of a prominent crypto hedge fund. some retail investors have found their accounts frozen and suffered large losses. large crypto players that used leverage to boost returns are scrambling to monetize their holdings, missing margin calls, and facing possible insol

delivered at " building a financial structure for a more stable and equitable economy, " the 22nd annual hyman p. minsky conference on the state of the u. s. and world economies, sponsored by the levy economics institute of bard college, held in new york, april 17 – 19. see national employment law project ( 2012 ), “ the low - wage recovery and growing inequality ( pdf ), ” data brief, report ( new york : nelp, august ). bis central bankers ’ speeches government were reported to have dropped at an annual rate of more than 8 percent in the first quarter of this year, following an even larger drop in the fourth quarter of last year. these cuts in federal spending are likely to be an important influence on the near - term prospects for economic growth, and i will say more about this issue in a moment. in contrast to the federal government, the budget outlook for state and local government continues to improve, and the drag on economic activity from this sector's cutbacks in spending has diminished considerably. reflecting some of these mixed influences, as i already noted, real gdp has been rising at a very modest rate, and the labor market has shown similarly modest gains over the past year, with the unemployment rate coming down about 1 / 2 percentage point. to more fully understand the experience of the 11. 7 million americans who can't find work, we look to broader measures of labor underutilization, which take into account job seekers who have stopped looking for work because they have become discouraged, and people working part time but who would prefer to work full time. recently, these numbers seem to be coming down. the gains in payroll employment over this period have been about in line with the decline in the unemployment rate, although, as is typical, the pace of job gains has been somewhat erratic in recent months. since the beginning of the year, the increases in payroll employment have averaged 196, 000 per month, a little above the 183, 000 average monthly gains observed during 2012. other indicators from the labor market have also shown some improvement recently. initial claims for unemployment insurance have declined since last summer, and the number of job openings appears to be increasing. i hope these indicators mean we are turning the corner on some of the painful costs associated with being unemployed or underemployed in america. turning to inflation, recent data show that price pressures have remained subdued. both total and core inflation were only about 1 percent over the 12 months ending