the same time, however, it is not difficult to see that if the deficit continues to run at a level close to 7 percent of gdp — and most forecasts assume it will for some time — the net international investment position of the united states will deteriorate sharply, u. s. net obligations to the rest of the world will rise to a very substantial share of gdp, and a growing share of u. s. income will have to go to service those obligations. this fact alone suggests that something will have to give eventually, and this raises the interesting question of how these imbalances have persisted on a path that seems unsustainable with so little evidence of rising risk premia. part of the answer seems to lie in the fact that these capital inflows into the united states, however, are not solely the result of the decisions of private actors, but reflect official intervention by countries with exchange rate regimes tied to the dollar, including those in asia and the major oil exporters. research at the federal reserve and outside suggests the scale of foreign official accumulation of u. s. assets has put downward pressure on u. s. interest rates, with estimates of the effect ranging from small to quite significant. if this is right, the apparent reduction in real rates is less likely to signal concern over expectations of future growth and future returns on investment, and is more likely to signal the special consequences of these exchange rate arrangements and their effects on private behavior, as well as the increase in international capital mobility. what then can we say about the implications of the pattern of imbalances we see today? the trajectory of the u. s. current account deficit has led most observers to conclude the u. s. external imbalance is unsustainably large and will have to come down over time. beyond this general judgment about unsustainability, there is little consensus on how this adjustment process will unfold or on its implications for economic activity and financial markets. the plausible outcomes range from the gradual and benign to the more precipitous and damaging. the size of the imbalance and the inevitability of eventual adjustment, however, mean that the world will be living for a considerable period of time with some risk of large movements in relative prices, greater volatility in asset prices, and periods of slower growth in the united states and in the rest of the world. that said, a number of observers have suggested that living with these imbalances for an

of manufacturers reported at least a partial shutdown of their operations early on in the pandemic. layoffs were widespread. the initial job loss of more than 20 percent in new york city exceeded the national decline of 15 percent. 2 you'll hear more about how the employment situation has evolved over the past four years from my colleague jaison abel in a few minutes. 1 / 3 bis - central bankers'speeches i lived and worked here in lower manhattan, so i remember just what that drastic change felt like. the city went from being packed at all hours of the day to being almost unrecognizable. here at the new york fed and in offices just like ours across the city, only essential workers came to work in person. and neighborhood businesses and services - and the employees that supported them - suffered as a result. but after that chapter came a remarkable rebound. to be clear, things are not exactly the same as they were prior to the pandemic. the city had to adapt to changes in office attendance and commute patterns, and the fallout is still lingering. but we are back on our feet, and the current reality is far different from the onset of pandemic and the period that followed. one indication that's important for our conversation today is that we've recovered the jobs lost during the pandemic and then some. now, shows and venues are packed. it's hard to get restaurant reservations at certain places. apartment vacancies are low. and office workers are back, even if in some cases it's only a few days a week. when we first hosted this conference in 2022, the discussion focused on remote work and the city's infrastructure, with a particular focus on an equitable recovery. the overarching question that shaped our conversations in that moment was, " what is the future of new york city? " now, that question has shifted. there's no doubt that new york city has a great future. so today, we're asking, " what kind of future do we want to build for new york city? " the future will build and expand on what has worked so well for the city in the past. the foundational aspects that have made new york so successful for so long are still present. the excitement and enthusiasm that draw people to live and work here have not changed. at the same time, many of the challenges have not changed either. for example, the high cost