Reserve and other central bankers, academics, public and private Sector Economists and members of the news media for this annual gathering. As you well know, its been our custom for nearly four decades to welcome you to wyoming, served for the kansas city that. I look forward to return to the online format, senate expressing my gratitude for those who travel around the globe to attend for managing jet lag. Appreciation to those attempting to manage local. With the current time, ranging from 6 00 a. M. Thursday to 1 00 a. M. Friday. This year has been an extraordinary one for Monetary Policy and central banking. Issues with time including the level of Interest Rates the effects of heightened uncertainty and how to effectively communicate Monetary Policy have been amplified by the economic fallout of the pandemic. For more than a decade, it seems the central has been in the shadow of the Global Financial crisis. It may be that the pandemic stems even further. The truly extraordinary policy. Our program is designed to cap light on these issues as we navigate the decade ahead. Look forward to the discussion i think the authors who will provide insight on this years docket topic. I want to thank the staff whose work tirelessly to anticipate and address, technological risk and certainty posting of symposium. The participant discussion and debate this form, understanding technology, like Monetary Policy they operate in a variable way. Regardless, this years proceedings will be available on our website, kansas city. Org or copies of materials will be posted as they are present your sound that has for decades of the symposium session let me turn to our program moderator, susan to golf the opening session. Thank you. Everyone was watching, it is a pleasure to be here for the 44th annual symposium. Its also a pleasure that is, for the first time, is broadcast in a public symposium which is attributed to making it more open and inclusive. This years theme, as you know, navigating the decade ahead. So many focus on navigating the very challenging issues we are grappling at the moment from the pandemic, racial injustice, economic crisis, its important to remember broader context. Sleep conclusions again this price stability of the American People as the economy is always evolving the strategy for achieving its goals are policy framework must adapt to meet the challenges arise. Physical, the biggest problem or no space is inflation. Great inflation demanded clear focus on restoring the credibility of the commitment to price stability. The disinflation the stewardship of spam led to the stabilization of an expert in the 1990s and around monetary policies laid the foundation for a long period of economic stability known as the great moderation. This new era brought new challenges to the conduct of Monetary Policy. Before moderation extensions ended in over eating and rising elation. Since then, prior to the pandemic downtown, a series of long extensions have been more likely to end with instability is something essential efforts to substantially increase the strength and resilience of the Financial System. By early 2000, around the world about the Monetary Policy framework known as inflation targeting. Although the precise measures of inflation target different from country to country, the core framework always articulates inflation goals, primary objective of Monetary Policy. Inflation targeting is also associated with increased communication and transparency designed to clarify essential things policy intentions. His emphasis on transparency reflected a new appreciation, policies most effective, clearly understood targeting Central Banks generally do not focus solely on inflation, targets take into account Economic Stabilization in addition to inflation objective. The leadership, the Federal Reserve adopted the features associated with flexible inflation targeting. You made great advances in transparency medications the initiation of Quarterly Press conferences and suffering of economic russians which prizes individual economic forecasts of participants. During that time, chair led an effort on behalf of of them for the Monetary Policy. January 2012, the committee issued its first on longer goals and Monetary Policy strategy which we often referred to as the consensus statement. A sensible part the statement with the articulation of a longer run inflation full of 2 . The labor market is strongly influenced by non monetary can change your mind. The committee did not set maximum employment. However, the statement affirmed the committees commitment congressional and mandate goals. The 2012 statement is a significant milestone reflecting Lessons Learned fighting high inflation as well as experienced around the world with flexible inflation targeting. A statement largely articulating the framework theyve been following for some time. The completion of the original statement, earlier on in the recovery from the Global Financial crisis. Since then, our understanding of the has evolved in ways central to Monetary Policy. The conduct of monetary has involved evolved. Maximum employment and price stability goals in the years ahead. Our evolving understanding of Economic Development motivated our review. Growth rate of the economy have declined for example, construed january 2012, median estimate of potential growth of participants has fallen from 2. 5 to 1. 8 . Some going from relative decades was to be expected reflecting slowing population growth. The decline in productivity growth which is the primary driver of improving Living Standards over time. Second, the general level of Interest Rates both here in the u. S. And around the world estimate of the neutral federal funds rate which is the rate consistent with the economy operating at full strength and stable inflation has gone substantially, reflecting a fallen equilibrium real Interest Rates. This rate is not affected but driven by fundamental factors in the economy. Demographics and productivity growth, the same factors that drive potential Economic Growth. Median estimate has fallen by nearly half in early 2012 from 4. 25 to 2. 5 . This has profound implications for Monetary Policy. With Interest Rates generally running closer to the effect of lower bound, even good times, the fed has less scope to support the economy during conference by simply cutting the federal funds rate. The result was economic outcomes in terms of employment and price stability. With the cost of such outcomes like the only part of no space. Third expansion that ended earlier this year led to the best labor market seen in some time. Employment rate covers your close two years, well below estimates of sustainable level employment rate captures only declined significantly five years following the crisis, Labor Force Participation rate of and began revising even though the aging of the population suggested it keep falling. Individuals in their prime working years participation rates retraced structural to the labor market. Moreover, expansion continued, gains began to be shared society hispanic Unemployment Rates in the past had not found jobs readily available. The importance of achieving a strong Job Market Research brought together some of the leading academic experts, central through our review. Discussion we engaged in for an appointment and put nation. Finally, a range of issues during the course of five consecutive provided essential background for the committees discussions. To conclude the review earlier this year, we turned our attention to the review. Revised statement the federated structure of the Federal Reserve reflected in the f1c ensures we always have a diverse range of perspectives on Monetary Policy and that is the case today. Unless im pleased to say the statement was adopted today with unanimous support. Our new consensus Statement Like its predecessor explains how we interpret what they gave us and explains goals. We continue to believe specifying numerical goal for unemployment is unwise because the part is measurable and changes over time. It has not changed our view on inflation rate of 2 is most consistent to promote maximum employment and price stability. Finally, we continue to believe Monetary Policy must be forward looking, taking into account the expectation of households and businesses and monetary policies effect on the economy. Our policy actions continue to depend on the Economic Outlook as well as the risks. Including potential risk for the Financial System of our goals. The key innovations on our economy. The challenge posed by the proximity of Interest Rates for the expected lower bound. To support the economy by cutting Interest Rates, lower bound increases risk to employment and inflation. These risk we are prepared to use full range of tools to support the economy. In regard to the employment side of our mandate, our revised statement emphasizes maximum employment is a broadbased and inclusive goal, this reflects our appreciation for the strong labor market particularly for many in low income communities. Revised statement for our policy decision will be informed by our assessment of a shortfall of employment from x maximum level other than by deviation of maximum level by the previous statement. This reflects our view that a riposte job can be sustained without causing out broke of inflation. In earlier decades it was steeper, inflation tended to rise noticeably in a rise in the labor market. It was sometimes important as it rose toward its excavated maximum level unwelcome inflation. The change to shortfalls clarifies Going Forward, implement and run or above without causing concern unless a company has unwanted increases in inflation for the emergence of other risks that had the containment of our goals. Unemployment is below its maximum level as is clear in the case now, we actively seek to minimize the shortfall by using tools to support Economic Growth and job creation. We played important changes with the price side. The inflation rate goal is to present. Her actions to achieve both sides will be effective expectations remain above 2 . However, it is below 2 , but never was above 2 even when the economy is strong, over time, the average less than 2 . Inflation tends to move below Mission Goals and pulled inflation down. This in adverse dynamics that could ensue, the new statement the kids we seek to achieve inflation that averages 2 over time. Therefore, following relation funds below 2 . Monetary policy will likely aim to achieve above 2 for some time. Seeking to achieve inflation over time, were not tying ourselves the mathematics formula, thus our approach could be viewed as a flexible form of average inflation targeting. Our decision about Monetary Policy will continue to reflect a broad array and will not be dictated by formula. Excessive inflationary pressures to build were Inflation Expectations above levels consistent with our goal, we would not hesitate to ask. Revisions add up to robust framework to an extent, reflects the way we have been conducting policy in recent years. There important new features but overall, our new statement a longer run goals and Monetary Policy as conveyed, are continued strong goals given difficult challenges resented are presented. We remain highly focused on fostering a strong labor market as possible for the benefit of all americans. We will seek to achieve a 2 inflation rate over time. Our review provided a platform for discussion and engagement for the public we serve. It helps us connect with our core constituency, and they have their everyday lives affected, conducting a review at regular intervals is a Good Practice providing valuable feedback and enhancing accountability. The everchanging economy, future reviews will allow us to take a step back, reflect and adopt practices as we achieve dual mandate goals. Our statement indicates we plan to undertake a thorough public review of Monetary Policy strategy, tools and medication practices, roughly every five years. Thank you. Thank you for those remarks and also engaging in a followup conversation. I think i can hear you now. Okay. Thank you very much. Both for your remarks about the consensus statements and for all the conversations. I believe this is the first time for this followup. I think this is the nature for us so i want to do that as well. Why dont we did right in . I think what we start with, focused on the changes is inflation strategy you will follow in this book. Going forward, a flexible average strategy and theres a lot of this strategy. I wonder if you could say more about how you communicate that to the public. To what extent is this . The communication is very important. As i mentioned in my remarks, we have many other engagements that people generally about inflation moving up. Were talking about inflation moving moderately. I think that concept should be well understood and i think its the pro brit one. When i began the review we understood the situation we are and called for an exploration of makeup strategies of very various kind. This seems to be the right thing we comes to strategy. Its made up in a way that allows us to continue to consider all the other things that come into Monetary Policy often unexpectedly rather than trying to find up particular formula. C thank you. Your colleague has described it as more of an evolution perhaps. I think thats fair. Go ahead. If i could just push back on it further and the comments he made with so much focus on the economic crisis we are in at the moment are there changes that people should expect to see as a result of what you have walked us through . I guess i would just set the stage a little bit and we began the review or we announced it publicly we were beginning the review in early 2019 and we had planned to announce her conclusion and indeed we are ready to announce her conclusions in april or june this year so most of it that was done and a lot of the work took place during 2019 so the review is meant to established a framework for Monetary Policy that will help our decisions for the foreseeable future. Its meant to take in account the learning we did in watching a full Business Cycle take place after the Global Financial crisis. Now we have indeed seen a cycle so we thought it was time to date. It wasnt designed to dictate any particular future decision about Interest Rates or other Monetary Policy however all of the things we do Going Forward will reflect the changes that we made to the framework rate i would think of it that way. It doesnt dictate particular outcomes at particular meetings or the time. Other than the goals we are seeking to achieve. You mentioned or about this so right now you mentioned that it was 18 months ago so i wonder if youve know what your motivation is or also the process and if you would have done anything differently . The review is really part of a Broader Program of enhanced transparency and accountability really something the fed has been working on for three plus years now. Today surveys show public faith in large institutions around the world is under pressure so i think institutions want to aggressively seek transparency and accountability to preserve our democratic legitimacy in their bunch of things we are doing. The review was at the center of that. Other Central Banks have done various forms of reviews i thought this was something we can do to get great benefits and be able to update our framework. The economic question we had the answer was how to adapt their framework to what we really have learned since the Global Financial crisis during that long extension. As i mentioned we knew he that we would be closer in all likelihood had to address that as i described in my remarks. We didnt know how it come out but im happy with where it came out. If you will forgive me or allow me to just say for a second that we were in the design process when vice chair rich clara arrived in the fall of 2018 and the three governors at the time. He had the time and really took this on and lead it and we would not be sitting here today talking about this about his great leadership efforts in bringing this forward. I also mentioned other members of the subcommittee on committee qishan and governor brandt and pretty much every member who is a perfect as a bank and look at the document into their own view and input. So i think in terms of some of the things i think they were great gains in the process of engaging with lawmakers and engaging with the general public on these issues and seeking input and accountability. I think that is the most welcome thing when you do that so i think even the framework that was something i was quite struck by. The fed was just really striking. You are in chicago. That conference, there were two panels of people and low moderate in income low moderate income and it was just riveting. It was the highlight of the conference which of course was chalk with monetary experts but to hear them talking about what type labor market means american unity is an something that none of us will forget and we do that intellectually but i think hearing it and hearing it a lot over the course and then seeing the sharing of the benefits of the labor market that is tight in the eighth and ninth years of expansion who began to move up from the lower end. We saw Labor Participation and we saw employers doing lots and lots of things to recruit people who might not have been recruited earlier so its a very virtuous thing and one thing i mentioned in my remarks we will take support from congress over time to its not just Monetary Policy is about education and health care so all the things that enable people to get into the labor force and stay there and progress in their careers. I think those are some the things i take away from the process. Some sense of the process i [inaudible] i wonder if you could say a bit more about how is the regular process the influence of voices from the public actually does play a role in terms of Monetary Policy decisions because thats a topic that is not at all well understood by the public. They make through the reserve bank system we have a unique really present in communities around the United States and we are present and not just those communities but educational, medical and Community Affairs groups present in neighborhoods and we harvest that information and it goes into a lot of what participants saying goes into the research that we do and goes into the data that we collect. We collect a lot of unique data on first outcomes among different groups and that kind of thing and all of that goes into our fomc deliberations in particular informs our understanding of what maximum employment really means that we focus on at every foc meeting in every briefing its pretty much my colleagues public remarks and the monetary reports and we will call for example on labor force results not just because its the right thing to do but im thinking about maximum employment so this is something we are focused on. These disparities are a longstanding feature of the American Economy and they really do hold us back as was pointed out so well recently. They weigh on the whole economy and so all of that goes into our thinking not in a mechanical way but our understanding of what maximum employment is in thats why you saw during 2019 when the Unemployment Rate fell to 3. 5 well below most estimates of the sustainable rate of unemployment. He didnt see is raising rates are expressing concerns her to celebrate and use saws cutting rates during 2019 not because of that but nonetheless we mark hesitant to cover its because of the very low level of unemployment. Just to follow up on that a bit you have made some very strong and very clear statements about Racial Justice and challenges of economic disparities particularly related to racial inequality and of course we know many of those disparities are in such clear release in the current context. Id like to have you say a bit more having explained that the employment mandate will be interpreted anymore inclusive way what else can the fed to do address some of those important disparities collects as i mentioned the longrunning teaches features of our economy which figure in terror understanding of economy and into our decisions and i would say also while they are longstanding the pandemic has really shown that the effect of the pandemic has fallen to a large extent a not exclusively but to a large extent on people working in the Service Economy and the Public Safety and jobs and these relatively lowwage workers and thats been heavily skewed towards minorities, women low to moderate income communities so what can the fed do . As i mentioned we do already if you look at the record we are doing lots of research around these issues and we are talking about a hoblick we and we are incorporating it into our thinking. I think the key thing though is the single most important thing we can do here is to support a strong labor market as i mentioned earlier. Thats something that we can do but that is more of an overall Government Society project that we can take on forcefully. You cant just be the way the fed manages Interest Rates through the Business Cycle although in other words its waiting until the eighth and ninth year of the cycle to get those kinds of results. We can do better than that with other policies. So i think we are doing those things that we can do a lot of them we are doing in week art looking for new ways. Its important to point out though i registered policies and affect all americans that are to the benefit of all americans. They are in that sense of tool and there are better tools dealing directly with distributional and those are tools help in our system of government by elected officials and the people who are pointed in the executive branch who work for an elected officials so it needs to be in all of government and all of society kind of ring. We will keep doing what we can do but we really needed to be part of it and i think we are doing the things would we can do now and we will keep doing them. It certainly does have to be a broader effort. In that context i wanted to ask you about the special programs and the facilities to try to get funds out into the community in particular in places that are really struggling. That has come under some criticism that other facilities are not reaching some of the groups that are the hardest hit for example minority businesses are often described her they would wonder if you would say a bit more about whether there are additional things that the fed could be doing perhaps in partnership with others. We go on the main street facility we did a great deal of outrage to Community Development financial situations and minority institutions and other organizations that represent those constituencies. We are doing everything we can to reach those. This is a very broad Program Designed to make loans to these are loans that they can make really cant make grants effectively the way the ppp program does. Thats really fiscal policy but while we are doing is making lumpen lob requires that they have a reasonable expectations that the loans will be repaid. A bank has to keep the 5 piece of that long so we are working to reach small to mediumsized businesses through that but i do think this is a unique exercise for us. We have never done anything like that lending to businesses not that we have never done this but we have never tried to reach out particular the small institutions. We are really not the ideal. We put more effort and in work into the main street facility than anything else we have done. We are making progress and have signed up more and more loans and Small Community banks are in fact active but its going to take more than that. Its going to take more erect aid i think to smaller businesses. Thats an area where fiscal policy can really do things that are hard for us to do in fact the ppp program has been doing. I would look to policy for help there. Clearly it has to be a partnership that has to have a broad impact that we would hope to see. I do want to talk a bit about the Current Crisis compared to other crises that the fed has grappled with and in particular one of the questions that i get asked is to what extent from the perspective of Monetary Policy is grappling with the major recession caused by a pandemic any different from grappling with one that is a in a financial crisis as we saw in 2008 in 2009 . The id be interested in your thoughts about that. Its a a very different situation. The two episodes and so far the two beginnings of recovery are quite different. This crisis did not remain from an asset bubble arnem balance or anything like that in all of those are features of the housing bubble in the housing crisis in the financial crisis. That was the heart of the Global Financial crisis and it was global in that sense. This really was a Natural Disaster that hit anna commented it was doing well but the Banking System that was wellcapitalized and highly liquid and understood its risks pretty well. Its been strank so thats very different although we have seen lives emerge in the Capital Markets for example under great stress. No doubt we welcome back and look at those when its time to do that. What happened here was essentially the people around the world sometimes required by their government withdrew from certain kinds of Economic Activity to protect themselves from a pandemic all around the world. Theres no precedent for that and there is no playbook for that. A response is quite different than the financial crisis so we can immediately cut rates to zero. We raised our asset purchases without limit to support market function. We are trying to stimulate the economy in the sense that the economy was essentially cut down. The idea was to provide a little bit of comfort to assure credit was flowing to households and businesses and then when the expansion came to support their recovery and expansion with Monetary Policy. So very very different and also this business of lending to nonfinancial corporate and also to state and local government. Unique and the mediation process stop. The Financial System, there was a second when the pandemic hit the credit in mediation between the creditor in the borrower stopped. This bull market for the corporate our kids and have been doing so for smaller businesses. And we did so on the funding markets. Its very different but i would say this though. We have the deepest quarter loss that we have ever had but remember the economy was strong back in february. There is a lot of strength in the economy. The recovery in may in and june came sooner and was stronger than expected. Its still a healthy economy except for this area thats been directly affected by covid create if we can keep the disease under control the rest of the economy can recover fairly quickly. The problem this time is the particular part of the economy which involves getting people together and feeding them and flying them around the country and entertaining them that part of the economy will find it difficult to recover. Thats a lot of workers are thats millions of people whose jobs who they are really going to struggle to find work and we need to stay with those people and support them and help them get back into working lives and stay in their homes. Congress has done a lot with that. Well keep doing what we can but i do think thats going to be we will get through this. Back maybe with some starts and stops but ultimately we are looking at a couple of years at least of people of relatively high employment as people who worked in those industries will struggle to find work and we are here to support them. A very different trajectory then he described and in that context do you see a role in terms of those Financial Institutions that really do Community Development . You know we are highly engaged with the cdfi and they are taking part in our programs. Now they took heart in the ppp liquidity facility so we strongly support them and engage with them and sent through m. D. Eyes. I think that is where the liquidity shortages. The big problems in the economy are actually in the service sector. Its in the real economy. Its really around the Financial System and big credit launches. Here we have capitalized institutions in a real economy and we have a different situation at this time. Thank you. We are all out of time unfortunately and i thought i would do for the last minute or two to cycle back to the review of the Monetary Policy framework and ask if you have any additional thoughts or perhaps ideas moving forward with the changes that you have described for us. Well first of all im very pleased with how this worked out pretty good and i think it was productive from the standpoint of just public engaged meant and thats always a good things for an institution like the fed, particularly the fed which has a burden on us to seek accountability not just go through the motions but really actively explain ourselves to the public in the publics elected representatives. In that sense its been a success and i think really the chain store framework time is going to tell and what but we do Going Forward is really going to decide the effectiveness of the changes we have made. I think its a very promising set of changes to deal with what is the reality of a quite difficult macroeconomic context of low Interest Rates, low inflation, relatively low productivity, slow growth in those kinds of things. We really have to work to find every scrap of leverage in helping stabilize the economy which is our role. Time will ultimately tell but im very pleased and so grateful to be part of such a Great Organization that used every part of your renovation to advance this project and im really glad to be part of this. Thank you very much. Thank you chair powell. Its a pleasure to speak with you this morning here and i would otherwise like to congratulate you and the Federal Reserve team for being publicly engaged with the monetary strategy so thank you very much. Thank you. We have passed in the house of representatives that george floyd policing and justice act. Now we need to pass it in the senate. We need Mitch Mcconnell and the u. S. Senate to meet on the george floyd policing and justice act or we are going to meet you senator at the polls on november 3 whether we have to mailin, walkin, ride in, crawl in. We want our bill passed. [cheers and applause] reverend al sharpton organized a relic called get your name off our necks that took place in washington d. C. Today. 57th anniversary of the march on washington. Water coverage tonight beginning at 8 00 eastern on cspan. Now the House Homeland Security committee looks a