achievement of monetary policy over the past few decades, and we should not take this stability for granted. models are by their nature only a stylized representation of reality, and a policy of achieving " temporarily " higher inflation over the medium term would run the risk of altering inflation expectations beyond the horizon that is desirable. were that to happen, the costs of bringing expectations back to their current anchored state might be quite high. a final strand of literature has contributed to our policy strategy over the past two years by emphasizing the role of credit and financial intermediation for macroeconomic fluctuations and monetary policy transmission, particularly the literature that developed during the 1980s on nonprice aspects of credit restriction and the importance of such factors in severe economic downturns. 9 from the onset of this financial crisis, we were especially alert to the possibility that limits on the availability of credit to financial intermediaries and in the flow of credit between intermediaries and the household and business sectors could exert unusual constraints on spending. it is fair to say, however, that the core macroeconomic modeling framework used at the federal reserve and other central banks around the world has included, at best, only a limited role for the balance sheets of households and firms, credit provision, and financial intermediation. the features suggested by the literature on the role of credit in the transmission of policy have not yet become prominent ingredients in models used at central banks or in much academic research. 10 for example, the standard framework used in research that discusses the role of communication at the zero lower bound includes taehun jung, yuki teranishi, and tsutomu watanabe ( 2005 ), " optimal monetary policy at the zero - interest - rate bound, " journal of money, credit and banking, vol. 37 ( 5 ), pp. 813 - 35 ; klaus adam and robero m. billi ( 2006 ), " optimal monetary policy under commitment with a zero bound on nominal interest rates, " journal of money, credit and banking, vol. 38 ( 7 ), pp. 1877 - 1905 ; and gauti b. eggertsson and michael woodford ( 2003 ), " the zero bound on interest rates and optimal monetary policy, " brookings papers on economic activity, vol. 2003 ( 1 ), pp. 139 - 211. see, for instance, the discussion and references in lars e. o. svensson ( 2006 ), " social value of public information : comment : morris and shin ( 2002

jerome h powell : brief remarks on the us economy speech by mr jerome h powell, chairman of the board of governors of the federal reserve system, at rhode island business leaders day, washington dc, 27 september 2018. * * * good afternoon. thank you, senator reed, for the kind words and the opportunity to be a part of the annual rhode island business leaders day. and thank you, all, for sticking with the program for the last speaker of the day. the federal open market committee, the body within the federal reserve that sets monetary policy, just concluded a meeting yesterday. i plan to talk briefly about how my colleagues and i see the economy evolving and our role in keeping it healthy. importantly, i want to hear from you. i very much appreciate your views, as business people, of economic conditions where you live and work. and, of course, i will be happy to respond to questions. our economy is strong. growth is running at a healthy clip. unemployment is low, the number of people working is rising steadily, and wages are up. inflation is low and stable. all of these developments are very good signs. of course, that is not to say that everything is perfect. the benefits of this strong economy have not reached all americans. many of our countrya€™s economic challenges are beyond the scope of the fed, but we are doing all we can to keep the economy strong and moving forward. that is the best way we can promote an environment in which every american has the opportunity to succeed. each time we meet, we face the same question : how can we set monetary policy to best support job growth and low, steady inflation? for many years, this question called for very low interest rates to help an economy that had been damaged by the deep financial crisis that gripped the world 10 years ago. as the economy has steadily gained strength, the fed has been gradually returning interest rates closer to the levels that are normal in a healthy economy. we took another step on that path yesterday, with a quarter - point increase in short - term interest rates. these rates remain low, and my colleagues and i believe that this gradual return to normal is helping to sustain this strong economy for the longer - run benefit of all americans. as i mentioned, 10 years have now passed since the depths of the financial crisis a painful part of our history that cost many americans their jobs, their homes, and, for some, their hopes and dreams. in addition to holding interest