john c williams : eclipse remarks by mr john c williams, president and chief executive officer of the federal reserve bank of new york, at the federal home loan bank of new york 2024 member symposium, new york city, 11 april 2024. * * * as prepared for delivery introduction good morning. the federal home loan bank of new york and the new york fed share a commitment to supporting economic strength in communities and households in our region. i look forward to speaking more about that in my discussion with president jose gonzalez in a few minutes. before we get to that conversation, i'll spend some time focusing on how the federal reserve is working to achieve our goals of maximum employment and price stability. i'll also discuss the significant progress we've seen in restoring balance to the economy and bringing inflation back down to the federal open market committee's ( fomc's ) 2 percent longer - run goal. finally, i'll share more on the trajectory of the fed's balance sheet as well as my view on where the economy is headed overall. now i need to provide the standard fed disclaimer that the views i express today are mine alone and do not necessarily reflect those of the fomc or others in the federal reserve system. the dual mandate i'll turn to the numbers in a minute. but first, by a show of hands, how many of you witnessed the solar eclipse earlier this week? i'll leave the complex explanations of cosmic phenomena to dr. massimino, who i expect will give a fascinating presentation later today. but simply stated, an eclipse happens when several things are perfectly aligned. or, in the immortal words of pink floyd, when " everything under the sun is in tune. " like monday's eclipse, the federal reserve's dual mandate has two goals that need to be in tune with one another : maximum employment and price stability. restoring price stability is essential to achieving a sustainably strong labor market that benefits all. the overarching objective of monetary policy now is to properly balance restoring price stability and maintaining maximum employment, and the fomc remains strongly committed to bringing inflation down to 2 percent over time. strong employment, lower inflation the good news is that over the past year we have made considerable progress toward this objective. demand - supply imbalances have diminished. global supply chains, which were severely disrupted during the pandemic and early in the recovery, have 1 / 5 bis - central bankers '

for those large gains was expected in the first quarter of this year. also, the expiration of extended unemployment compensation benefits and bonus depreciation at the end of the year was likely to take some of the starch out of consumer spending and business fixed investment. beyond these anticipated factors, we had unusually harsh winter weather, which likely depressed housing activity, manufacturing production and some aspects of household spending such as motor vehicle purchases. with the fundamentals of the economy improving and fiscal drag abating, i expect the economy to get back on to a roughly 3 percent growth trajectory over the remainder of this year, with some further strengthening likely in 2015. but, there remains considerable uncertainty about that forecast and, given the persistent over - optimism about the growth outlook by federal reserve officials and others in recent years, we shouldn ’ t count our chickens before they hatch. business fixed investment and housing are two key areas where activity has been disappointing. they need to kick in more forcefully for the economy to grow at an above trend rate for a sustained period. with respect to capital spending, the recent trajectory has been very soft relative to the apparent strong underlying fundamentals. corporate cash flows have been strong, profit margins are high, balance sheets are healthy and financing generally appears readily available at low interest rates. moreover, the absolute level of capital outlays is low so that the capital stock is expanding only slowly. despite these positive fundamentals, real business spending on equipment and software has risen only 3. 2 percent over the past four quarters and contracted in the first quarter. this is a bit of a puzzle to me. but, i expect it to be resolved by a pickup in capital spending. recent trends in durable goods orders and conversations i have had with businesses in my district suggest that such a pickup may finally be occurring. on the housing side, residential investment has stalled out over the past few quarters. although i expected some slowing due to the rise in mortgage rates in the middle of 2013, the extent of the slowdown has surprised me given that the recent pace of housing starts – roughly 1 million per year – is far below what is consistent with the economy ’ s underlying demographic trends. i think housing has been weaker than anticipated because several significant headwinds persist for this sector. first, mortgage credit is still not readily available to households with lower credit scores. second, some people are coping with higher student loan debt burdens that have delayed their entry into the housing market as first - time homebuyers