global economy than i currently anticipate. i am closely monitoring global economic and financial market developments to assess their implications for my outlook and the balance of risks. u. s. monetary policy in a global environment thus far, my remarks have focused on the u. s. outlook and the risks relative to this outlook. this focus is appropriate. like other central banks, our monetary policy mandate concerns domestic objectives : maximum sustainable employment and price stability. our monetary policy actions, however, often have global consequences that, in turn, influence the u. s. economy and financial markets. at the same time, external factors can impact the monetary policy transmission mechanism in the u. s. and influence the effectiveness of our monetary policy in achieving our objectives. we cannot appropriately calibrate policy without keeping these spillover and feedback effects in mind. in some cases, these effects can be significant. an example is the market volatility we saw in the spring and summer of 2013 during the so - called “ taper tantrum. ” in the u. s., we saw a spike in treasury yields, with the 10 - year rate rising by more than 100 basis points from early may of that year before peaking in september. financial markets in emerging market economies ( eme ) were hit hard as well, with declines in equity prices, a widening in sovereign debt spreads and a sharp increase in foreign exchange volatility. volatility in eme financial markets re - emerged last summer and has continued into this year. for emes as a group, declines in equity prices and currency values have been larger than what we experienced during the taper tantrum. the recent episode, however, appears to largely reflect concerns about risks emanating from emes themselves, rather than concerns about the direction of fed policy. three related concerns appear to be at the forefront. first, there has been a broad - based slowdown in eme growth. this slowdown is not new. each year since 2012, eme growth has come in well short of expectations that existed at the start of the year. it is difficult, however, for market participants to recognize and adjust to large structural shifts in real time. there is still considerable uncertainty about the trajectory of long - term eme growth, and therefore the appropriate pricing of eme financial assets. in that context, heightened market volatility is not surprising. second, this slowdown in eme growth is happening after a long upswing in credit expansion

was in line with widely held market expectations. while the future path bis central bankers ’ speeches of policy is not on a pre - set course and must remain data dependent, we will strive to be similarly effective in our communications going forward. as you know, we ’ ve taken a number of steps in recent years to increase transparency and improve our communications. this includes regular press conferences by the fed chair following fomc meetings ; the publishing of growth, inflation, unemployment and federal funds rate projections by fomc participants ; a concerted attempt to lay out the guideposts that the fomc will look at to assess progress toward our mandate ; and an equally concerted attempt to lay out how our various policy tools ― such as interest on reserves, overnight reverse repurchase ( on rrp ) operations and reinvestment of principal payments from our asset holdings – will be used to pursue our objectives. we are also working to be better stewards in safeguarding financial stability. simply put, we failed to act early enough and decisively enough to stem the credit excesses that spawned the financial crisis and great recession. the u. s. was not alone in this shortcoming, but, given our position in the global financial system, we should have done better. we ’ ve taken important steps through new legislative mandates and a broader effort to rethink our regulatory and supervisory framework. in particular, systemically important banking organizations must now hold capital and liquidity buffers that are better aligned with their risk profiles. many other changes have also been implemented, such as the central clearing of standardized over - thecounter ( otc ) derivatives contracts, which should help make the global financial system more resilient and robust. while these efforts remain a work in progress, i think they will reduce the risk of repeating the mistakes of the past decade, and enable us to take a more proactive stance toward addressing potential future vulnerabilities. of course, we at the fed are not alone here. since the financial crisis, central banks worldwide have been engaged in a broad rethinking of how better to fulfill their mandates. let me close with a final thought. adam smith in the wealth of nations introduced the concept of the “ invisible hand. ” smith argued that individuals acting in their self - interest can collectively promote the public interest. this concept, i believe, also often applies to international monetary policy. 2 the biggest problems that countries create for others often stem from getting policy