monetary union are well known : there are the famous maastricht criteria relative to the moderation of inflation, the avoidance of excessive public finance deficits and the stability of the exchange rate. in many accession countries substantial progress has already been achieved in different fields and one can expect the participation of over ten new member states to the european union in the coming years and later on to the monetary union. however a lot remains to be done. * * * i shall now move on to the last topic of my speech : the international role of the euro. in the past, for economic and political reasons, some countries have adopted an active stance with regard to the internationalisation of their own currency, by either fostering or hindering its external use. for its part, the eurosystem has adopted a neutral stance. this means that it neither pursues the internationalisation of the euro as a policy goal, nor does it attempt to hamper its use by non residents. the international role of the euro is and will be determined by the choices of market participants in the context of increasing market liberalisation and integration. there is place for at least two international currencies : in that field too competition is beneficial. given the weight of the euro area in the world economy and the legacy of the former national currencies of the area in financial markets, the euro has already become the second most widely used international currency behind the us dollar. as an anchor currency, the euro has largely inherited the role played by some of its legacy currencies ( e. g. the german mark and the french franc ). the euro plays a role as a peg in 55 countries outside the euro area, mainly in countries in the rest of europe, africa and the middle east having close trade and historical links with the euro area countries. arrangements adopted range from very close links to the euro to looser forms of anchoring. with regard to other functions, the euro ’ s international role has remained more limited. the us dollar remains the main reserve currency and the dominant pricing and quotation currency. the predominance of the dollar is attributable mainly to the combined and reinforcing effects of network externalities and economies of scale in the use of the leading international currency. future developments in the international use of the euro are likely to be influenced by two main factors - size and risk. with regard to the size factor, a broad and liquid euro area capital market may lead to greater use

for release on delivery 1 : 15 p. m. est ( 12 : 15 p. m. cst ) january 19, 2023 staying the course to bring inflation down remarks by lael brainard vice chair board of governors of the federal reserve system at the university of chicago booth school of business chicago, illinois january 19, 2023 inflation has declined in recent months, which is important for american households, businesses, and consumers. inflation is high, and it will take time and resolve to get it back down to 2 percent. we are determined to stay the course. 1 financial conditions have tightened considerably over the last year as the federal reserve and foreign central banks have tightened policy. real yields have risen significantly across the curve over the past year : 2 - year yields on treasury inflationprotected securities ( tips ) have risen more than 4 - 1 / 2 percentage points to 2. 1 percent, and 10 - year tips yields have risen more than 2 - 1 / 4 percentage points to 1. 2 percent. short - term real interest rates have moved into decidedly positive territory. 2 mortgage rates have doubled. 3 inflation has been declining over the past several months against a backdrop of moderate growth. yesterday ’ s industrial production index points to a significant weakening in the manufacturing sector, and the retail sales report points to a further moderation in consumer spending. looking forward, weaker readings on real income, wealth, and sentiment, along with indicators of spending on services, such as the ism services index, point to subdued growth in 2023. 4 real disposable personal income declined, on net, at an annual rate of 4. 1 percent in the first three quarters of 2022, i am grateful to kurt lewis for his assistance on these remarks. these views are my own and do not necessarily reflect those of the federal reserve board or the federal open market committee. for instance, the expected 3 - month t - bill rate is currently 4. 7 percent, 1. 5 percentage points above the 3 - month 3. 2 percent median projection of the 2023 : q1 annualized total pce ( personal consumption expenditures ) inflation rate in the january blue chip survey. in addition, over the course of the past year, investment - and speculative - grade corporate bond spreads over treasury securities have widened by roughly 50 basis points and 100 basis points, respectively ; broad equity prices have declined by 17 percent ; and the trade - weighted dollar has appreciated by about 4 percent on net. the federal