short - sighted view. on the contrary, i would submit that excessive volatility not only frightens investors, but also potentially undermines growth and, in so doing, benefits none of us. as a result, i cannot help but conclude that stable - - and not volatile - - markets are in the best interests of both central banks and the financial community. stability in foreign exchange and other financial markets, along with price stability, is vital to the promotion of sustainable economic growth and rising living standards for everyone. reducing the diversion of resources to deal with uncertainty and volatility allows resources to be directed toward more productive uses and, in so doing, promotes long - term growth by increasing the resource base available to the economy. we have seen in high - inflation economies how the transfer of resources away from productive activities and into financial transactions geared toward dealing with inflation uncertainty can negatively affect growth. we have also seen how a proliferation of tax code dodges can decrease the available resource base. if individuals must spend more time engaging in financial maneuvers because of uncertainty, then more of the economy ’ s productive capacity is transferred to the activity of handling transactions. an expansion of the financial sector that stems from an increasing number of people employed to handle distortions arising from inflation and its attendant uncertainty is growth that diverts resources better employed elsewhere. by contrast, an expansion of the financial sector that stems from growth of productivity is growth that offers benefits to all. the same basic principle applies to the foreign exchange market. foreign exchange rates are fundamentally determined by market forces and should be free to fluctuate as a vital adjustment mechanism for the global economy. however, excessive volatility, like price instability, can diminish resources otherwise available for productive growth. the economy in which we live and work is a global one, and becomes more so every year. regions and industries in need of private capital and investors requiring adequate returns benefit when money can move across national boundaries without excessive risk or hedging costs. foreign exchange markets that are more stable and more transparent ultimately will better allow investors to allocate their capital efficiently, thereby improving global economic growth. change is difficult in any industry and can put enormous stress on individuals. i ’ m not ignoring this dynamic. however, i am persuaded that, in the long run, what is good for economic growth is in the best interests of the financial community, and, in turn, benefits the individuals that make up that community. just as u. s. industries went through

of paramount importance. as the recent surge in cases in some states demonstrates, much is still unknown about how the pandemic will play out in the months ahead. that said, there have been signs that we may be past the worst of the extreme economic distress, and early indications of a recovery have started to emerge. as states began to open up and people returned to eating in restaurants and shopping in stores we've seen sizable increases in consumer spending. we've also seen increases in building permits, signaling a turnaround in the construction industry. 3 people have been getting back to work and the unemployment rate has started to edge down. although this improvement is welcome, the economy is still far from healthy and a full recovery will likely take years to achieve. 1 / 4 bis central bankers'speeches one of the things that's been unique about this recession is the lightning speed of events. traditional macroeconomic data sources — like the labor market report and gdp — are published with lags of weeks or months and don't typically allow one to see the changes within the month or quarter. in response, economists at the federal reserve and elsewhere have increasingly turned to analyzing a wide variety of high - frequency data, which — as the name suggests — are published daily or weekly, with only short reporting lags. 4 high - frequency data give us more timely and granular information about what's going on in the economy in between the standard macro data releases. they also help us paint a more detailed picture of people's behavior and how it's changing in the midst of unprecedented circumstances. these data tell us whether small businesses are hiring and whether people are eating in restaurants, staying in hotels, and boarding airplanes. when states started to reopen, signs from both the standard macro data and the high - frequency granular data have been encouraging. together, they indicate that we've likely seen the low point of the downturn and that the overall economy has begun to recover. even in new york, the hardest hit state, we have seen initial signs of a turnaround. surveys of manufacturing and services firms rebounded significantly in june, following record lows in april and may, and revenues of small businesses in new york have gradually picked up as well. 5 in contrast to these positive signs, we are seeing some indications of a slowing in the pace of recovery in states that are currently experiencing large - scale outbreaks. this is a valuable reminder that the economy's fate is in