they can be sustained for a time, but not indefinitely. they could be diffused gradually and smoothly. but the transitions to a more sustainable equilibrium could also bring a risk of greater volatility in asset prices, less stability in macroeconomic outcomes, and more uncertainty. this could mean a less benign future environment for u. s. monetary policy. the potential uncertainties posed by these challenges may be more troubling because of confidence engendered by the stability and resilience of the u. s. economy over the past decade. we are in the midst of an unusual dynamic in financial markets, in which low realized volatility in macroeconomic outcomes, low realized credit losses, greater confidence in the near term path of monetary policy, low uncertainty about future inflation and interest rates, rapid changes in the nature of financial intermediation ( role of hedge funds and the change in how credit risk is bought and managed ), and a large increase in the share of global savings that is willing to move across borders, have worked together to bring risk premia down across many asset prices. there is no reliable analytical framework one can use to determine whether we are experiencing an unwelcome or unjustified decline in expected volatility, or whether investors are giving too much weight to the relative stability of the recent past and too little to the uncertainty posed by the challenges ahead. and analysts can point to good fundamental reasons and some plausible theories to support this collective judgment of market participants about low future risk and volatility. but there is much we do not understand about how these transitions ahead will unfold - in fiscal positions, the u. s. external imbalance, and in the exchange rate system and portfolio preferences. the recognition that things that are not sustainable will eventually come to an end does not give us much of a guide to whether the transition will be calm or exciting. these dimensions of the broader context in which we will be making monetary policy in the years ahead put a very important premium on keeping u. s. monetary policy as close to the frontier of credibility as possible. and this suggests we need to continue to examine the case for a measured further evolution in the u. s. monetary policy framework - evolution in the direction of finding ways to provide more clarity about our long term inflation objective, about the underlying forces shaping the federal open market committee's forecast, the dimensions of uncertainty that surround that forecast, and the likely implications for monetary policy, to the extent we are

kazuo ueda : what to know about central bank digital currency remarks by mr kazuo ueda, governor of the bank of japan, at the fintech summit fin / sum 2024, tokyo, 5 march 2024. * * * introduction i am delighted to be given this opportunity to speak to you at the fin / sum 2024. today i will be talking about central bank digital currency, often abbreviated as cbdc. cbdc is a pivotal topic for central banks. regardless, the results of the bank of japan's opinion survey on the general public's views and behavior for september 2023 show that when asked about their familiarity with the term cbdc, less than 20 percent of respondents answered " have read or heard of it, but do not know much about it " while merely 3. 1 percent responded " know about it. " while i am aware that many of those present today may already have a thorough grasp of this subject, i will walk you through the topic in everyday language. differences between cbdc and existing digital payment instruments in japan, a wide array of cashless payment instruments, including credit cards, emoney, and qr code payment, are in use. how do cbdcs differ from such existing digital payment instruments? retail cbdc, assuming a wide range of users, which include individuals and firms, has been explored in many countries, including japan, on the premise that this would align with cash - - in other words, banknotes and coins - - in terms of their roles and functions as a means of payment. the key features of cash would therefore serve as a gateway for considering the differences between cbdc and existing digital payment methods. broadly speaking, there are three such features. first, cash is a direct liability of the central bank. this is in sharp contrast to existing digital payment methods, for which payment is made with liabilities issued by private entities, including banks and payment service providers. second, a cash payment becomes final at the point in time where the payee receives the cash from the payer. put differently, immediately upon receipt of cash the payee can reuse it for other payments. for most digital payment instruments used for consumer - to - business payments, on the other hand, there is a time lag of days before merchants receive the money through a bank transfer or other means. these features bring us to the third point, that is, we use cash on a daily basis and with a sense of