in order to anchor expectations at the 2 percent level consistent with price stability, it “ seeks to achieve inflation that averages 2 percent over time, ” and — in the same sentence — that therefore “ following periods when inflation has been running persistently below 2 percent, appropriate monetary policy will the statement is available on the board ’ s website at https : / / www. federalreserve. gov / monetarypolicy / review - of - monetary - policy - strategy - tools - andcommunications - statement - on - longer - run - goals - monetary - policy - strategy. htm. - 5likely aim to achieve inflation moderately above 2 percent for some time. ” as chair powell indicated in his jackson hole remarks, we think of our new framework as an evolution from “ flexible inflation targeting ” to “ flexible average inflation targeting. ” 5 while this new framework represents a robust evolution in our monetary policy strategy, this strategy is in service to the dual - mandate goals of monetary policy assigned to the federal reserve by the congress — maximum employment and price stability — which remain unchanged. 6 concluding remarks while our interest rate and balance sheet tools are providing powerful support to the economy and will continue to do so as the recovery progresses, it will take some time for economic activity and employment to return to levels that prevailed at the business cycle peak reached last february. we are committed to using our full range of tools to support the economy and to help ensure that the recovery from this difficult period will be as robust as possible. see jerome h. powell ( 2020 ), “ new economic challenges and the fed ’ s monetary policy review, ” speech delivered at “ navigating the decade ahead : implications for monetary policy, ” a symposium sponsored by the federal reserve bank of kansas city, held in jackson hole, wyo. ( via webcast ), august 27, https : / / www. federalreserve. gov / newsevents / speech / powell20200827a. htm. see richard h. clarida ( 2020 ), “ the federal reserve ’ s new monetary policy framework : a robust evolution, ” speech delivered at the peterson institute for international economics, washington ( via webcast ), august 31, https : / / www. federalreserve. gov / newsevents / speech / clarida20200831a. htm ; and richard h. clarida ( 2020 ), “ the federal reserve ’ s new

for release on delivery 11 : 00 a. m. est january 8, 2021 u. s. economic outlook and monetary policy remarks by richard h. clarida vice chair board of governors of the federal reserve system at the c. peter mccolough series on international economics council on foreign relations new york, new york ( via webcast ) january 8, 2021 it is my pleasure to meet virtually with you today at the council on foreign relations. 1 i regret that we are not doing this session in person, as we did last year, and i hope the next time i am back, we will be gathering together in new york city again. i look forward to my conversation with steve liesman and to your questions, but first, please allow me to offer a few remarks on the economic outlook, federal reserve monetary policy, and our new monetary policy framework. current economic situation and outlook in the second quarter of last year, the covid - 19 ( coronavirus disease 2019 ) pandemic and the mitigation efforts put in place to contain it delivered the most severe blow to the u. s. economy since the great depression. economic activity rebounded robustly in the third quarter and has continued to recover in the fourth quarter from its depressed second - quarter level, though the pace of improvement has moderated. household spending on goods, especially durable goods, has been strong and has moved above its pre - pandemic level, supported in part by federal stimulus payments and expanded unemployment benefits. in contrast, spending on services remains well below pre - pandemic levels, particularly in sectors that typically require people to gather closely, including travel and hospitality. in the labor market, more than half of the 22 million jobs that were lost in march and april have been regained, as many people were able to return to work. inflation, following large declines in the spring of 2020, picked up over the summer but has leveled out more recently ; for those sectors that have been most adversely affected by the pandemic, price increases remain subdued. the views expressed are my own and not necessarily those of other federal reserve board members or federal open market committee participants. i would like to thank chiara scotti for her assistance in preparing these remarks. - 2while gross domestic product growth in the fourth quarter downshifted from the once - in - a - century 33 percent annualized rate of growth reported in the third quarter, it is clear that since the spring of 2020, the economy has