we took the view that unbalanced growth was better than no growth. the question now, of course, is where do we go from here. there have recently been encouraging, but still tentative, signs that the worst of the global slowdown may now be behind us, and that the us and eurozone economies are now beginning to bottom out and will pick up, perhaps to around trend, as we go through this year. some asian countries actively involved in the ict sector are showing a strong recovery, and even in japan financial markets have recently strengthened. as for the exchange rate, the euro, which has, as i say, been puzzlingly weak since soon after its introduction 3 years ago, still seems likely to strengthen eventually. as it becomes clearer that the international environment really is improving, and that external demand really is picking up, then we can look forward to better balanced and generally stronger growth in our own economy. that will in due course mean that domestic demand growth - and consumer demand growth in particular - will need to moderate if we are to avoid a build up of inflationary pressure. but let me be quite clear - that's not a warning, still less is it a threat. it is essentially just a matter of arithmetic! it's quite possible, even quite likely, that the necessary moderation of consumer demand - and i emphasise the word moderation - will come about of its own accord, given the gradual increase in unemployment we are currently seeing, and the build up of household debt. and provided it does not happen too abruptly, that would be the best possible outcome. but if consumer spending were not to moderate of its own accord, we would, in the context of strengthening external demand, clearly need at some point to consider raising interest rates to bring that moderation about. i don't suggest that the timing of any such move is imminent - that will obviously depend upon the timing and the strength of the recovery abroad and on the strength of domestic demand as we move forward. and that, subhash, is of course my answer to your second question - " what precisely will happen to interest rates? " in case any of you are confused, i think that what i said was that interest rates will rise - unless they fall or stay the same! mr president, there is no doubt that the past year or so has been a difficult time for the world economy which made life increasingly difficult for the internationally - exposed sectors of our own economy. we

user costs. digital currencies, including central bank digital currencies ( cbdcs ), present opportunities but also risks associated with privacy, illicit activity, and financial stability. the introduction of bitcoin and the subsequent emergence of stablecoins with potentially global reach, such as facebook ’ s libra, have raised fundamental questions about legal and regulatory safeguards, financial stability, and the role of currency in society. this prospect has intensified calls for cbdcs to maintain the sovereign currency as the anchor of the nation ’ s payment systems. moreover, china has moved ahead rapidly on its version of a cbdc. with these important issues in mind, the federal reserve is active in conducting research and experimentation related to distributed ledger technologies and the potential use cases for digital currencies. given the dollar ’ s important role, it is essential that the federal reserve remain on the frontier of research and policy development regarding cbdcs. as part of this research, central banks are exploring the potential of innovative technologies to offer a digital equivalent of cash. like other central banks, we are continuing to assess the opportunities and challenges of, as well as the use cases for, a cbdc, as a complement to cash and other payments options. there continues to be strong demand for u. s. currency, and we remain committed to ensuring the public has access to a range of payments options. we have been conducting in - house experiments for the last few years, through means that 1 / 3 bis central bankers'speeches include the board ’ s technology lab, which has been building and testing a range of distributed ledger platforms to understand their potential opportunity and risk. this multidisciplinary team, with application developers from the federal reserve banks of cleveland, dallas, and new york, supports a policy team at the board that is studying the implications of digital currencies on the payments ecosystem, monetary policy, financial stability, banking and finance, and consumer protection. to enhance the federal reserve ’ s understanding of digital currencies, the federal reserve bank of boston is collaborating with researchers at the massachusetts institute of technology in a multiyear effort to build and test a hypothetical digital currency oriented to central bank uses. the research project will explore the use of existing and new technologies as needed. lessons from this collaboration will be published, and any codebase that is developed through this effort will be offered as open - source software for anyone to use for experimentation. the objectives of our research and experimentation across the federal