25 basis points, to 4 - 1 / 2 percent. the further reduction in the target rate was intended to lessen the extent of macroeconomic risk in the economy and to increase the likelihood of achieving moderate growth over time. in terms of the potential inflation costs associated with that action, the incoming data on consumer prices continued to be encouraging and inflation expectations appeared to remain reasonably well anchored. but, the recent run - up in energy prices and the fall in the foreign exchange value of the dollar suggested to me that, since the september fomc meeting, somewhat greater inflation risks had raised the costs of easing policy to manage the macroeconomic risks. nonetheless, on balance, i viewed the benefits of that action as being greater than the costs. looking forward, one feature of monetary policy to keep in mind is that, all else equal, each successive action in the same direction tends to lower the incremental benefits and to raise the incremental costs of additional actions. for example, unless underlying economic conditions or risks change substantially, reductions in the target federal funds rate tend to be associated with decreasing incremental benefits in terms of further mitigating tail risks and with increasing incremental costs in terms of the potential for inflation to increase. in the current context, i would be especially concerned if inflation expectations were to become unmoored and will watch both market - based and survey - based measures of inflation expectations closely. in sum, in september and again in october, i believed that achieving the fomc's statutory mandate to promote price stability and maximum employment would best be accomplished by lowering the target federal funds rate. with those actions, however, the downside risks to economic growth now appear to be roughly balanced by the upside risks to inflation. i would add that the limited data and information received since the october fomc meeting have not changed my thinking in this regard. economic outlook with the september and october policy actions as a backdrop, i would now like to provide a more detailed description of where i think the u. s. economy is most likely to be headed in the near - term and further ahead. in the near term, the economy will probably go through a rough patch during which a number of economic data releases may be downbeat. home sales seem likely to weaken further given the difficulties faced by some potential buyers in obtaining a mortgage and, perhaps, some concerns on their part about buying into a falling market. moreover, with the inventory of unsold homes already quite

lael brainard : " fed listens " in richmond - how does monetary policy affect your community? speech by ms lael brainard, member of the board of governors of the federal reserve system, at the federal reserve bank of richmond, richmond community listening session, richmond, virginia, 8 may 2019. * * * it is good to be here in richmond today. 1 i appreciate my colleague, tom barkin, leading this event, and it is a pleasure to also be with sherrie brach armstrong, ceo of the community foundation for a greater richmond ; tim davey, timmons group economic development manager ; shawn smith, director of workforce development at goodwill of central and coastal virginia ; and robert ukrop, chairman and ceo of ukrop ’ s homestyle foods. today ’ s community listening session is part of a series called “ fed listens. ” the federal reserve is undertaking a review to make sure we are carrying out the monetary policy goals assigned to us by the congress in the most effective way we can. 2 in conducting this review, we are reaching out to communities around the country in sessions like this to understand how you are experiencing the economy day to day. two goals so what are the monetary policy goals the congress assigned us? congress has assigned the federal reserve to use monetary policy to achieve maximum employment and price stability. these two goals are what we refer to as our dual mandate. by price stability we mean moderate and stable inflation. specifically, the federal open market committee ( fomc ) — the group at the fed responsible for determining monetary policy — has announced that our goal is to keep inflation around 2 percent over time. the maximum employment part of our dual mandate is straightforward : the congress has directed us to achieve the highest level of employment — and thus the lowest level of unemployment — that is consistent with price stability. while the congress has specified the goals for monetary policy and a set of tools or authorities to pursue them, it has allowed the fomc to determine how to best go about achieving those goals. reviewing how we conduct monetary policy last year, core inflation was very close to our goal. and the unemployment rate is at a 50 - year low. we are undertaking our review to ensure we are well positioned to meet our goals for many years to come. we also want to make sure that the way we are setting monetary policy is keeping up with the way the economy is changing, which i have been referring to as the “ new normal. " 3 there