slowed, and residential investment declined. business investment in equipment fell for the fourth consecutive quarter. a surge in exports supported growth ; however, much of the increase was in shipments of soybeans, while exports of other goods remained tepid. growth was also supported by a buildup in inventories, breaking a streak of five quarters in which inventories contributed negatively to growth, the longest such run in more than 50 years. overall, i expect gdp growth to continue at a moderate pace, supported by household spending, renewed business investment, and the waning effects of past dollar appreciation on export growth. i will now turn to inflation. headline pce ( personal consumption expenditures ) inflation has moved up this year, with the 12 - month change reaching 1. 2 percent in september. as the transitory effects of the earlier fall in oil prices and rise in the dollar fade, pce inflation can be expected to rise further toward our 2 percent target, supported by higher core pce inflation, which ran at a 1. 7 percent pace in september. as you know, earlier this week, we decided to keep the target range for the federal funds rate at 1 / 4 to 1 / 2 percent. as was noted in the federal open market committee ’ s statement, our assessment is that the most recent data have further strengthened the case for increasing the target range for the federal funds rate. 2 the markets put a probability of above 70 percent on the 1 / 2 bis central bankers'speeches rate being increased in december. so far i ’ ve been discussing our near - term economic prospects. but the more interesting and important questions relate to the next few years rather than the next few months. they relate in large part to the secular stagnation arguments that were laid out yesterday in larry summers ’ mundell - fleming lecture — in particular the behavior of the rate of productivity growth. the statement that the problem we face is largely one of demand — and we do face that problem — seems to imply either that productivity growth is called forth by aggregate demand, or a say ’ s law of productivity growth, namely that productivity growth produces its own demand. that is not an issue that can be answered purely by theorizing. rather, it will be answered by the behavior of output and inflation as we approach and perhaps to some extent exceed our employment and inflation targets. 1 views expressed are mine and are not necessarily those of the federal reserve board or the federal open market committee. 2 board of governors of the

), “ tracking the international footprints of global firms ”, bis quarterly review, march 2018. 2 / 3 bis central bankers'speeches 5 source : oecd factbook, ict value added ( % of total value added ). 6 source : oecd labour force statistics. 7 see adrjan, pawel and lydon, reamonn ( 2019 ), “ clicks and jobs : measuring labour market tightness using online data ”, central bank of ireland economic letter, vol. 2019, no 6. 8 see elding, catherine and morris, richard ( 2018 ), “ digitalisation and its impact on the economy : insights from a survey of large companies ”, economic bulletin, issue 7, ecb, november. 9 auer, raphael, levchenko, andrei and saure, philip ( 2017 ), “ international inflation spillovers through input linkages ”, nber working paper, no 23246. 10 see andrews, dan, gal, peter and witheridge, william ( 2018 ), “ a genie in a bottle? globalisation, competition and inflation ”, oecd economics department working paper, no. 1462, and ecb ( 2017 ), “ domestic and global drivers of inflation in the euro area ”, economic bulletin, issue 4, june. 11 see cavallo, alberto ( 2018 ), “ more amazon effects : online competition and pricing behaviors ”, nber working paper no 25138. 12 ibid. 13 for the euro area, see cicarelli, matteo and osbat, chiara ( 2017 ), “ low inflation in the euro area : causes and consequences ”, occasional paper series, no 181, box 3, ecb ; for canada, see charbonneau, karyne, evans, alexa, sarker, subrata and suchanek, lena ( 2017 ), “ digitalization and inflation : a review of the literature ”, bank of canada staff analytical note, 2017 – 20 ; for sweden, see sveriges riksbank ( 2015 ), “ digitisation and inflation ”, monetary policy report, february, pp. 55 – 59. 3 / 3 bis central bankers'speeches