may reiterate, fiscal support is very critical for monetary policy to be effective. it is therefore clear that the 2007 budget is a forward looking stage setting document which not only has extended the fiscal policy measures to assist sustainable growth in a number of ways but also provides a way forward through a well focused policy coordination. although a temporary deviation from the path ahead may not be crucial, it is essential to closely monitor the program, ( preferably on a monthly or quarterly basis ) to ensure that all actors get back on the track during a shorter period and ensure that all are moving towards the right direction.

of four other reserve banks who serve one - year terms as members on a rotating basis. one important role of the independent regional reserve banks is to ensure that diverse views are represented. the reserve banks each have economic research departments to guarantee that a wide variety of perspectives are brought to the table. in this way, the institution avoids groupthink. by being open and transparent about these various perspectives, the decentralized model for the federal reserve helps strengthen public confidence and preserve its independence. whether we vote or not, all reserve bank presidents attend the fomc meetings, participate in the discussions, and contribute to the committee ’ s assessment of the economy and policy options. the fomc has eight regularly scheduled meetings a year to set monetary policy. it discusses economic conditions and, in normal times, adjusts short - term interest rates to achieve the goals of monetary policy that congress has set for us in the federal reserve act. congress established the current set of monetary policy goals in 1978. the amended federal reserve act specifies that the fomc “ shall maintain long run growth of the monetary and credit aggregates commensurate with the economy ’ s long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long - term interest rates. ” since moderate long - term interest rates generally result when prices are stable and the economy is operating at full employment, many have interpreted these instructions as being a dual mandate to manage fluctuations in employment in the short run while preserving price stability in the long run. economic conditions in order to determine the appropriate monetary policy to promote these goals, the fomc must monitor economic developments. so, let me turn to an assessment of our economy. as we enter 2014, i think the bottom line is that the economy is on firmer footing than it has been for the past several years. bis central bankers ’ speeches real output grew at a 4. 1 percent annual pace in the third quarter of last year, the strongest gain in nearly two years and a marked acceleration from the first half of 2013. some of this growth came in the form of inventory investment, which is volatile and is less likely to have contributed as much to growth in the fourth quarter. still, personal consumption and fixed investment provided positive contributions, and economic prospects at the end of last year and the beginning of this year are positive. personal consumption, which accounts more than two - thirds of gdp, advanced at an annual rate of 2 percent in