other issue i get asked about is the normalization of the balance sheet. when we first announced our plans in june 2017, i was poised to expound on them in great detail. 4 but when i raised the topic i was sorely disappointed to be met with glazed eyes and general indifference. sadly, nobody seemed to care! now that ’ s changed, and i ’ m getting more interest on this topic. it ’ s important to remember why the fed took unconventional monetary policy actions in the first place. large - scale asset purchases, forward guidance on the future path of interest rates, and seven years where the federal funds rate hovered close to zero, were all measures necessary for the full recovery from the great recession. 3 / 4 bis central bankers'speeches a decade later and the fomc has slowly but surely been moving monetary policy “ back to normal. ” we ’ ve moved interest rates closer to neutral, scaled back on forward guidance, and are over a year into the process of winding down the balance sheet. 5 our goals throughout the policy normalization process have been twofold. first and foremost, to support a strong, sustainable expansion of the economy. second, to do this in a predictable and transparent way that creates as little disruption as possible. 6 so far, this plan has worked very well, with the economic expansion nearing record duration. but it is important to stress that if circumstances change, i will reassess our choices regarding monetary policy, including the path of balance sheet normalization. data dependence applies to all that we do. and, as always, if the outlook deteriorates in a material way, we stand prepared to deploy all our policy tools as appropriate in support of the economy. conclusion i ’ d like to conclude where i began, with the dual mandate. there ’ s sometimes a view that fed policymakers are fixated on two data points : inflation and employment. and the reason is that ’ s how we ’ re judged by congress at doing our job. but underpinning these is a strong economy, and ultimately that ’ s what we ’ re always using monetary policy to support. so, as the year unfolds i ’ ve got my eyes wide open, looking at the data and listening to experience — whether it ’ s coming from household surveys, market indicators, or from leaders in my district. the economy is strong, the outlook is healthy, and my number one priority is using monetary policy to keep it that way. in short

1 those of you who are of my generation will remember the runaway inflation of the 1970s and early 1980s. obviously that ’ s something we must avoid repeating. but the challenge of more recent years actually hasn ’ t been too high inflation. instead, it ’ s been inflation that ’ s persistently too low. over the past decade, inflation has more often than not come in below our goal. but things are looking better. underlying measures of inflation have been running just below 2 percent over the past 12 months, and i expect them to be right at 2 percent this year. and i don ’ t see any worrying signs of inflationary pressures building. so, from the perspective of the fed ’ s dual mandate as a whole, things are looking very good. of course, for this healthy jobs market and low and stable inflation to persist, we need solid growth in the economy. while gdp growth in 2018 looks to have been a robust 3 percent, we ’ re hearing anxiety both in the markets and the commentary, about what ’ s to come in 2019. 1 / 4 bis central bankers'speeches i wish i could now tell you with certainty what will happen to the economy, but anyone who promises they can see into the future is a charlatan. however, what i can do is provide you with some insight into how i assess the health of the economy and what that means for my view on the monetary policy decisions before us. data dependent i often say i ’ m data dependent, and i ’ ve talked about the major economic indicators, gdp growth, inflation, and employment. but these headline numbers aren ’ t the only things that inform my view on monetary policy, or the economy more broadly. i ’ m looking at a whole raft of information about what ’ s going on and where risks may be lurking. employment and unemployment numbers provide a useful summary measure of what ’ s happening in the labor market. but “ data ” doesn ’ t stop there. there are many sources of information on labor market conditions that i regularly consult. they range from very granular data that zero in on individuals ’ experiences in the labor market, to indices of job openings, how many people are quitting their jobs, and labor market participation, to name a few. but it ’ s not just these hard numbers that matter. i also find surveys of households and businesses provide valuable and timely perspectives about economic conditions. for example, there ’ s a questionnaire that asks people whether jobs are “ hard to