the ongoing supply challenges and demand shifts, have led to inflation rates we have not seen in four decades. the priority for monetary policy is clear. the federal reserve is strongly committed to bringing inflation back down to our 2 percent longer - run goal. price stability is absolutely essential for the economy to achieve its potential and sustain maximum employment over the medium term. i want to be clear : this is not an easy task. we must be resolute, and we cannot fall short. this morning i'm going to talk about the uncertainty that high inflation poses to the economic outlook. i'll also share more about the labor market, both here in puerto rico and in the country more broadly. then, i'll describe how the federal reserve's monetary policy actions are aimed at bringing down high inflation and restoring balance to the economy. before i continue, i should give the standard fed disclaimer that the views i express today are mine alone, and do not necessarily reflect those of the federal open market committee ( fomc ) or others in the federal reserve system. dual mandate i know many of you here are studying economics, so you may be familiar with the fed's dual mandate, or the two goals congress has set for us : to promote both maximum employment and price stability. to better understand what affects our mandate, we look at data — lots of it. we study everything from food and gas prices to retail sales and inventories, from labor costs and employment figures to semiconductor inventories and shipping expenses, and from the demand for goods and services to readings on public health. slowing growth so, i'll start with the data that we are seeing as it relates to one half of our dual mandate : maximum employment. although there are some signs that job growth has slowed in recent months, the labor market remains incredibly tight. during the first six months of this year, the economy added 2 - 3 / 4 million jobs, as businesses added staff to keep up with demand. the unemployment rate has been steady in the past few months near its historical low and was 3. 6 percent in june. there are now far more job openings than people looking for work, and employers are still struggling to fill roles. the economy experienced a rapid recovery from the pandemic last year, but i expect growth to slow considerably this year as the waning effects of fiscal stimulus, less favorable financial conditions, and slower growth abroad all weigh on our economy. by continuing to use our site,

on the challenge of gathering loss data in a historically low loan loss environment. we will also discuss the challenges you share around keeping abreast of consumer compliance requirements. during today ’ s luncheon, our head of consumer compliance will share remarks on recent enhancements to the examination process. i ’ d like to close with a few words about a specific topic that is core to the community bank 2 / 3 bis central bankers'speeches business model, namely attracting new customers and growing deposits. i believe success in the area will be increasingly linked to a willingness to invest in technology and new processes. customers today seem to prefer online banking, and millennials favor alternative banking options. this suggests both an opportunity and a strategic imperative. there may be no better time than now to reimagine transformation through investments in innovation, improved multichannel delivery, more fintech partnerships, and expansion of digital payments. technologies to enable transformation are more powerful, readily accessible, easily implementable, and economical than ever before. of course, these new activities bring risk management and legal issues and challenges to consider — vendor management, data privacy, consumer protection and cybersecurity to name just a few. to conclude, and again to echo the “ on the horizon ” theme of the conference, i believe we all need to be mindful of this new financial landscape as community banks strive to retain control of the customer experience. this is critical to the relationship - based business model of many community banks and reflects the unique local knowledge of the market and customer needs. as the industry evolves, this poses some challenges but also opportunities. this is new territory for us all and i expect it will be part of the ongoing supervisory dialogue in the years ahead. thank you for your attention and for joining us today at the new york. i will be available during today ’ s lunch session to discuss further, and i hope you enjoy today ’ s conference. 1 i thank jacqueline fenton for assistance drafting these remarks. 2 kevin j. stiroh, introductory remarks at the new york feds first fintech research conference, march 22, 2019. 3 / 3 bis central bankers'speeches