term rates were accompanied by falling forward rates. but the reverse is also possible, with term premiums moving more steeply than appropriate for underlying economic conditions, which we saw in the so - called taper tantrum episode in 2013. certainly, my colleagues and i are mindful of recent episodes in which we have seen unusually sharp spikes in market volatility. accordingly, i expect that the fomc will continue proceeding to the greatest extent possible in a very deliberate manner, aiming to provide clear communications about committee members ’ assessments of the economic and policy outlook. based on today ’ s picture of moderate underlying momentum in the domestic economy and the likelihood of continued crosscurrents from abroad, the process of normalizing monetary policy is likely to be gradual. it is also important to remember that the stance of monetary policy will remain highly accommodative even after the federal funds rate moves off the effective lower bound, because the real federal funds rate will initially still be low and because of the elevated size of the federal reserve ’ s balance sheet and the associated downward pressure on long - term rates. moreover, the fomc has stated clearly that it will for a discussion of the effects of worker bargaining power on the natural rate, see andrew figura and david ratner ( forthcoming ), “ the labor share of income and equilibrium unemployment, ” feds notes ( washington : board of governors of the federal reserve system ). for a discussion of the effect of labor market churning on the unemployment rate, see steven j. davis, r. jason faberman, john haltiwanger, ron jarmin, and javier miranda ( 2010 ), “ business volatility, job destruction, and unemployment, ” american economic journal : macroeconomics, vol. 2 ( april ), pp. 259 – 87 ; and michael feroli ( 2014 ), “ u. s. : the consequences of economic calcification, ” j. p. morgan economic research note ( new york : jpmorgan chase, september ), as noted in james pethokoukis ( 2014 ), “ america suffering from ‘ economic calcification ’ – jp morgan, ” aeideas ( blog ), september 2. bis central bankers ’ speeches reduce the size of the balance sheet in a gradual and predictable manner starting at an appropriate time after liftoff, which will depend on how economic and financial conditions evolve. in summary, the string of soft data in the first quarter raises some questions about

the use of technologies that could improve check processing efficiency, which should lead to substantial reductions in transportation and other check processing costs. h. r. 5414 makes such changes. proposed check clearing for the 21st century act the proposed check clearing for the 21st century act solves a longstanding dilemma - - how to foster check truncation early in the check collection or return process without mandating that banks accept checks in electronic form. the term check truncation refers to any of a number of arrangements in which the original paper checks are removed from the collection or return process. currently, under typical check truncation arrangements, electronic information about a truncated check is presented to the bank on which it is drawn rather than the original paper check. the act facilitates check truncation by creating a new negotiable instrument called a substitute check, which would permit banks to truncate the original checks, to process the check information electronically, and to deliver substitute checks to banks that want to continue receiving paper checks. a substitute check, which would be the legal equivalent of the original check, would include all the information contained on the original check - - that is, an image of the front and back of the original check as well as the machine - readable numbers that appear on the bottom of the check. under this act, while a bank could no longer demand to receive the original check, it could still demand to receive a paper check. banks would likely receive a mix of original checks and substitute checks. because substitute checks could be processed just like original checks, a bank would not need to invest in any new technology or otherwise change its current check processing operations. banks could use the new authority provided in this legislation in a number of different ways. for example, a bank would no longer need to send couriers every afternoon to each of its branches and atms to pick up checks that customers have deposited. instead, digital images of checks could be transmitted electronically from those locations to the bank's operations center for processing. not only would this be quicker and more efficient, but it could permit banks to establish branches or atms in more remote locations and to provide later deposit cut - off hours to their customers. moreover, the act would give a bank the flexibility to transmit checks electronically over long distances, and create substitute checks at locations near their ultimate destination, for example to the bank on which the checks are drawn, substantially reducing the time and cost associated with physical transportation. by enabling the banking industry