annual incomes were twice the supplemental poverty measure dipped below the poverty line for at least one month during the year. 21 the federal reserve board ’ s survey of household economics and decisionmaking ( shed ) similarly finds that 10 percent of all adults self - reported that they struggled to pay their bills at least once in the past year due to volatile income. 22 jonathan morduch and rachel schneider, the principal investigators the findings here refer to banks in the study “ that tracked all incidences for all accounts opened at any time during 2011. ” see jonathan morduch and rachel schneider, the financial diaries : how american families cope in a world of uncertainty ( princeton university pres, 2017 ). see also jeanne c. marra, “ the financial diaries authors discuss income volatility, ” bridges, ( federal reserve bank of st. louis, fall 2017 ), https : / / www. stlouisfed. org / publications / bridges / fall - 2017 / financial - diaries - authors - income - volatility. board of governors of the federal reserve system, report on the economic well - being of u. s. households in 2017 ( may 2018 ), 12, https : / / www. federalreserve. gov / publications / files / 2017 - reporteconomic - well - being - us - households - 201805. pdf. - 9of the financial diaries, argue that access to steady, predictable cash flows is an important source of financial inequality. 23 expenses can be just as unpredictable as income, and financial fragility results from the mismatch between the two. the pew charitable trusts showed that 60 percent of households self - reported that over the prior 12 months, they had experienced at least one financial shock, like a job change, divorce, major illness, or breakdown of a car or major household appliance. 24 the median household spent half - a - month ’ s income on the most expensive shock ( the median expense being $ 2, 000 ). further complicating things, expense shocks rarely occur on their own, but instead can cascade into additional expenses and stress for families on the margins. pew showed that a third of households they studied self - reported two or more different financial shocks over the course of a year. 25 morduch and schneider found that 65 percent of spending spikes involved increases in two categories of expenses, such as transportation and health care. in more than half of the spending spikes they studied, spending was well above

monetary policy right. regardless of changes in its disclosure procedures, this has always been and remains the committee ’ s foremost goal. current economic conditions and outlook let me close by linking this discussion of transparency to the current economic situation. since late last year, evidence has accumulated that the economy would be unlikely to meet the committee ’ s goal of maximum sustainable noninflationary growth. therefore, the fomc has moved aggressively, cutting the federal funds rate 200 basis points since the turn of the year. two of those actions were taken between meetings - january 3 and, of course, yesterday. over this period, economic conditions were changing rapidly. and, in the current situation, we were facing an unusually long intermeeting period. although some fog always surrounds the outlook, there is more than the usual amount of uncertainty at this juncture about the economic future. clearly, many businesses were surprised by the extent of the slowdown in sales late last year, and inventories became uncomfortably high in some sectors. there also is talk of an overhang of high - tech capital, although quantifying the magnitude of that overhang is very difficult. some producers of high - tech equipment may have misjudged the short - term demand for such equipment, perhaps, in part, because they assumed that the strength in investment experienced during 1999 and the early part of 2000 would continue. moreover, a number of high - tech companies have failed over the past year, reducing the demand for new investment - both directly through the absence of their own spending and indirectly by increasing the supply of nearly new equipment on the second - hand market. these imbalances will take some time to be corrected. but businesses are moving quickly to adjust levels of production. and final demand should be supported by the lower interest rates put in place by the financial markets and the federal reserve. despite the decline in stock prices, i believe that the underlying technical advances that have been so important to macroeconomic developments over the last five years will continue and will provide support over time for business and consumer spending. but what interest rates will be associated with a return to healthy growth in spending remains an open question. incoming data have remained mixed, but on balance suggest that the economy has been expanding very slowly. as our announcement yesterday noted, we are especially concerned about the outlook for capital investments. profit expectations have been revised down, and reports that businesses have been postponing capital improvements are widespread. moreover, the downward revisions to earnings expectations