of 1997 - and seemed like a remote event of no great significance to most americans - has set off a chain reaction reaching around the world. much of asia is in deep recession, the russian economy has collapsed with negative repercussions for many of its neighbors, growth is slowing in latin america. risk aversion of investors has made it difficult for any country, company or venture perceived as at all risky to get capital or to borrow, even at high rates. countries like brazil, mexico and argentina, considered quite strong a few months ago, are under mounting pressure. brazil has had to raise interest rates, use much of its foreign exchange reserves to keep its currency from depreciating ; the high interest rates, in turn, have greatly exacerbated brazil ’ s budget deficit, and the deteriorating outlook has led to fears that investors will pull their capital out and bankers refuse to roll over debts. economic collapse in brazil, which is latin america ’ s largest economy, could precipitate serious trouble in other latin american countries and then reverberate back around the globe to deepen the trouble of asia, including hong kong, china and japan. another round of deepening deterioration would surely put intense downward pressure on the us economy by cutting our exports, depressing equity markets and weakening investor and consumer confidence. as chairman alan greenspan has said, we cannot expect to be an “ oasis of prosperity ” in a deteriorating world economy. even if we could stay prosperous alone, we should not want to take the risk that deteriorating economies in the rest of the world would augment unrest, terrorism and international conflict that could engulf the united states. what ’ s to be done? in the near term there are clearly two priorities : ⇒ stop the contagion so that emerging market countries can begin to get back on their feet. ⇒ keep the world ’ s largest economy from slowing down too much - for our own sake and the world ’ s. there is no easy, simple answer to stopping contagion, if indeed there is any answer. what would be the elements of a plan? first, countries most in danger of being the next to fall have to be willing to face up to their vulnerability quickly. ( there is no point in moaning, “ it ’ s not our fault, we didn ’ t do anything wrong ; we just got caught in the world backwash. ” that ’ s partly true, but not helpful. ) they have to be willing to

lael brainard : assessing progress as the economy moves from reopening to recovery speech by ms lael brainard, member of the board of governors of the federal reserve system, at " rebuilding the post - pandemic economy " 2021 annual meeting of the aspen economic strategy group, aspen, colorado, 30 july 2021 * * * the economy is reopening, consumer spending is strong, and hundreds of thousands of workers are finding jobs in the hard - hit leisure and hospitality sector each month. pent - up demand has outstripped capacity in some sectors, as businesses that had pared back to survive the pandemic are encountering bottlenecks as they rehire and restock. 1 these mismatches have made it more difficult to interpret the first few months of reopening data. the second quarter of 2021 saw a large wave of demand buoyed by fiscal transfers, resulting in annualized real personal consumption expenditures ( pce ) growth of 11. 8 percent. real gross domestic product grew at an annual rate of 6. 5 percent in the second quarter of 2021, slightly less than many forecasters had projected, as that strong consumer demand outstripped production, resulting in a significant decline in inventories. the tailwinds to growth from the fiscal stimulus during the first half are shifting to headwinds that will continue through the remainder of 2021 and 2022. even so, pent - up consumption and full reopening are expected to more than offset fiscal headwinds in the second half such that pce is expected to grow at a robust rate, and growth is expected to remain strong through the remainder of the year. by the end of the year, the u. s. economy is expected to achieve average annualized growth of 2. 2 percent since the onset of covid - 19 — slightly above most estimates of longer - term potential output growth. in short, growth this year is expected to compensate fully for last year ’ s sharp contraction — as a result of the strong policy response, effective vaccines, and the resilience and adaptability of american households, workers, and businesses. while we are seeing progress on employment, joblessness remains high and continues to fall disproportionately on african americans and hispanics and lower - wage workers in the services sector. last december, the committee indicated that asset purchases would continue until substantial further progress toward our employment and inflation goals had been achieved. the june data showed that there