options to improve the payments landscape. we continue to conduct research to fully understand technological innovations and their associated benefits, risks, and tradeoffs. we must also fully understand any related implications for federal reserve payment infrastructure and policy outcomes. researchers cover a wide range of policy areas, including payments policy, privacy considerations, financial inclusion, financial stability, and monetary policy implications. because new digital assets are currently focused on tokenization of certain traditional or even new types of money, tokenization is a research theme for the federal reserve and for central banks globally. while this topic is relevant to cbdc research work, it will also inform other issue areas — including discussions about stablecoin regulation, novel banking activities supervision, and efforts to improve the current payment system. technologists at the board and the reserve banks have been conducting focused research and experimentation to provide insight into technical capabilities and risks associated with digital assets, including cbdc, and the programmable platforms that could support payment infrastructure improvements. these experiments give the researchers hands - on experience with new technologies and allow the federal reserve to examine the application of emerging technologies in retail, wholesale, and cross - border use cases. - 13 the federal reserve board continues to collaborate closely with international counterparts on issues related to digital payments. this includes engagement with multilateral institutions, such as the bank for international settlements, g7, financial stability board, and bilateral engagements with other central banks. this work reflects the interconnectedness of the global financial system and allows us to follow actions taken by other jurisdictions and understand any related implications for the united states. conclusion as the money and payments landscape evolves, i continue to stress the importance of looking ahead and analyzing potential changes that may emerge well into the future. this can be done most effectively by understanding the broad range of options that could be leveraged to improve payments, including technology, improvements to existing payment infrastructure, and policy options and their implications. given the breadth of activity in this space, i believe that policymakers must specify the problems they are trying to solve, understand the range of alternatives that could address any problems, including policy and technology options, and thoroughly analyze the associated risks and tradeoffs. for all of the federal reserve ’ s involvement in this work, i support a responsible approach to innovation that recognizes the role of private sector innovations, benefits from the strengths of the u. s. banking system, and focuses policymakers on thinking about payment and financial system infrastructure and effective policy. to achieve this, i support a clear regulatory

economy ’ s salvation, but a principal foe. slowing the creep of protectionism is no small accomplishment, but it is not the equal of meaningful expansion of trade and investment opportunities to enhance global growth. the european sovereign debt crisis is not upsetting the stability in financial markets ; it is demonstrating how far we remain from a sustainable equilibrium. turning private - sector liabilities into public - sector obligations may effectively buy time, but it alone buys neither stability nor prosperity over the horizon. in the balance of my remarks, i will survey recent economic and financial market developments. next, with the benefit and burden of recent u. s. experience, i will offer some changes for the next edition of policymakers ’ crisis response guide. finally, even amid greater uncertainty about economic prospects, i will seek to further the discussion about a path for policy. economic and financial market developments recent economic data support a moderate recovery in economic activity. as the federal open market committee ( fomc ) noted last week, information received in the past couple of months suggests that the recovery is proceeding and that the labor market is improving, albeit gradually. household spending is increasing, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. business spending on equipment and software has risen significantly ; however, investment in nonresidential structures continues to be weak. owing to a less - than - assured economic outlook and broad uncertainty about public policy, employers appear quite reluctant to add to payrolls. after sizable increases in march and april, private nonfarm payroll employment rose by only 41, 000 in may. employers, however, continue to lengthen workweeks for existing employees. notably, the workweek for production and nonsupervisory workers in manufacturing reached its highest level since july 2000, and overtime hours per worker now stand at pre - recession levels. meanwhile, most broad measures of inflation remain subdued. and long - term inflation expectations appear stable. financial conditions, notably, have become less supportive of economic growth. in early may, concerns intensified regarding fiscal difficulties in some european countries. financial market volatility resurfaced with a vengeance in u. s. markets. the implied volatility of equity prices ( vix ) jumped to levels not seen in more than a year. in short - term funding markets, spreads between the libor ( london interbank offered rate ) and the ois ( overnight indexed swap ) rate widened and commercial paper rates for many issuers jumped