necessarily reflect those of the federal open market committee ( fomc ) or others in the federal reserve system. economic outlook let me begin by saying that despite the challenges and uncertainties we ’ ve faced since the pandemic took hold, the economy is now positioned to grow quickly. in fact, with accommodative financial conditions, strong fiscal support, and widespread vaccinations, i expect that the rate of economic growth this year will be the fastest that we ’ ve experienced since the early 1980s. and that ’ s not only a forecast — we are already seeing signs of this pivot to strong growth in the economic statistics, as i ’ ll discuss in a minute. if this sounds like good news, that ’ s because it is. but robust economic growth this year by itself isn ’ t enough to achieve the truly strong and full economic recovery that we are aiming for. we are still far from our goals of maximum employment and price stability, known as the fed ’ s “ dual mandate. " 1 / 3 bis central bankers'speeches to inform our decision - making, we consider a broad range of factors that help us understand developments affecting economic growth, labor markets, and inflation. i ’ ll start with the most common measure of the overall economy : gross domestic product, or gdp. i mentioned that i expect gdp growth this year to be the fastest in decades. specifically, i see inflation - adjusted, or real, gdp increasing around seven percent this year. this is welcome progress after the toughest period for the economy in living memory and a winter when the pandemic was particularly severe, and the economy suffered as a result. despite the truly devastating effects of the pandemic on employment, recent job growth is the strongest it ’ s been since last summer. over 900, 000 jobs were added in march, and i am hopeful that we will see very strong job gains over coming months as the economy continues to reopen. it is very encouraging to see people getting back to work and to see these gains starting to be more widespread, including in the sectors and regions that were hit hardest by the pandemic. but, even with the gains that have occurred, let ’ s not forget that there are about eight and a half million fewer jobs today than before the pandemic. to put that number in context, this is a shortfall similar to what we saw at the worst point of the aftermath of the great recession. this means we will need big

star is just one factor affecting our decisions, alongside economic and labor market indicators, wage and price inflation, global developments, financial conditions, the risks to the outlook … the list goes on and on. i ’ ve talked a lot about normalizing our policy around interest rates. in addition, about a year ago we started the process of gradually reducing the fed ’ s balance sheet as we work to unwind the 2 / 4 bis central bankers'speeches asset purchase policies put in place during the crisis. in the now - standard fed practice of communicate, communicate, and communicate, we published detailed plans well in advance on how we would gradually and predictably reduce the balance sheet. 5 this process has proceeded smoothly without creating undue market disruption or volatility. 6 with balance sheet normalization well underway, the fed is studying the question of what exactly the new normal looks like. we have indicated that we plan to shrink the balance sheet to the smallest size consistent with the efficient and effective conduct of monetary policy — and that, in the long run, the asset side of the balance sheet will consist primarily of treasury securities. 7 that ’ s our strategy, but its execution will depend on the operating framework of monetary policy, among other factors. here, the fed basically has two choices. we could return to a system similar in spirit to that used before the financial crisis, in which the supply of reserves in the banking system was kept relatively scarce, and the interest rate was set by adjusting reserves on a frequent basis through open market operations. alternatively, we could continue with the system that we ’ ve been using since the crisis, in which bank reserves are abundant and the federal funds rate target is achieved through adjustments to administered rates. this approach is working very well at controlling interest rates and has proven to be easy to communicate and adaptable to changing market conditions. 8 the fed will be looking closely at these options in the coming months and will subsequently make a decision on the future operating framework. and, as is our standard practice, we will be sure to communicate our thinking and decisions on this issue as soon and as thoroughly as practicable. global dimensions of u. s. monetary policy so far, i have described the economic and monetary policy outlook from the perspective of the u. s. economy and policy. this should not be surprising given that the fed ’ s mandate — as defined by the u. s. congress — concerns domestic economic conditions. of course, that does not imply that one can