restoring price stability, which is the foundation for a vibrant and healthy economy. over the past year, inflation has increased rapidly and dramatically to levels last seen in the early 1980s. a year ago, overall inflation, as measured by the percent change in the personal consumption expenditures ( pce ) price index, was 2. 5 percent. in march, it was 6. 6 percent. a portion of this sharp rise reflects global increases in food and energy prices. but, even excluding energy and food costs, the " core " inflation rate has increased from 2 percent a year ago to 5. 2 percent today. 1 / 4 bis - central bankers'speeches three major imbalances are contributing to an overheating economy and high inflation. first, the effects of the pandemic have significantly increased demand for certain categories of spending, especially for durable goods and housing. this increase in demand is occurring while supply in these sectors is being adversely affected by the pandemic. the case study for this dynamic is the automobile sector. the combination of high demand and supply shortages has led to historically low inventories. customers are lining up to buy cars but are finding the dealer lots empty. it's a seller's market, and prices have soared. new car prices are up nearly 15 percent since the start of the pandemic, and used car prices have skyrocketed, rising more than 50 percent. another prominent example is housing. with remote work policies in place, many people have relocated - buying larger homes in the south, in the suburbs, and in more affordable cities. this shift has caused demand for housing in some regions to far outstrip supply, while new housing construction has been held back by shortages in labor and materials. the imbalance between demand and supply has led to bidding wars. homes have sailed off the market at record prices, with many purchased sight unseen. this combination of high demand and crimped supply has also resulted in rapid increases in rents, especially for apartments coming onto the market. the second major imbalance is in the labor market, where overall demand far exceeds existing supply. the ratio of job vacancies to the unemployed is near its all - time high, workers are quitting jobs at a record rate, and employers are bidding up wages. this sizzling hot labor market is also related to the imbalance between demand and supply for goods and housing, as businesses seek to hire more workers to help meet the high demand. and labor supply shortages

njuguna ndung ’ u : building a platform for greater partnership remarks by prof njuguna ndung ’ u, governor of the central bank of kenya, at the business editors ’ workshop, naivasha, 2 may 2014. * * * dr. haron sirima, deputy governor, central bank of kenya mr. jaindi kisero, managing editor ( economic affairs ), daily nation business editors here present central bank of kenya colleagues other distinguished participants ladies and gentlemen i would like to register my profound appreciation to you, members of the fourth estate for making time to attend this workshop. no doubt, your role as editors is extremely demanding on your time. i believe this workshop in an important step in enhancing the partnership between the central bank and the media, in line with the theme, building a platform for greater partnership. as you may already be aware, it was once believed that central banks needed to be as uncommunicative and as secretive as possible due to the conventional idea that doing so would safeguard the autonomy of policy making, coupled with the perceived wisdom of saying as little as possible. however, the last 15 or so years has witnessed tectonic shifts regarding how central banks view their communications. central banks have recently begun to engage in public communications more proactively and purposely. the shift is validated by the linkage between enhanced communication and the achievement of economic outcomes. transparency in the policy making process creates partnerships and best outcomes. ladies and gentlemen : communication is essential to the functioning of a modern central bank as a policy tool rather than merely a means of conveying information, as traditionally understood. communication enhances the effectiveness of policy by improving the public understanding of policy objectives and enhancing the legitimacy of the message. an overriding priority for a central bank is to provide financial markets, and by extension the general public, the confidence that its policy actions are in the public interest. by clearly explaining its objectives, central banks gain public support and in the process, secure the opportunity to shape expectations and influence behavior in a desired direction. additionally, the prevailing emphasis on communication is informed by the need to balance increased demands for central bank independence with an equally necessary accountability to the public. that means ensuring that policy objectives are communicated in a manner that is understood and comprehended by the target audience. by investing in communication, central banks earn the trust of the public to pursue its strategic priorities independently. in addition, the decisions made by the central banks are themselves important inputs to