worried about 2% inflation target. in 2020, the central bank implement said new monetary framework, applicable average inflation target. the idea was to make up shortfalls by temporarily allowing inflation to exceed 2% while averaging 2% in the long run. no specific timeframe is given. this likability increases uncertainty about price stability. until recently the fed's mantra setting its policy rate was lower for longer. forward guidance is often misguided. the macro models were unreliable. with monetary policymaking. the third side as transitory, slow to increase following rates. the consensus has changed and the fed made it clear rates will rise until inflation falls to a more normal level even if the us faces inflation. the underlying problem with the current monetary regime is too much for policymakers, the limits of monetary policy is forgotten. there is no clear rule for guiding policy. carl bruder, in the conduct of monetary policy. given the complexity of real economy, according to bruner, and non-activists, rules-based regime, as the safest strategy. it does not assure us economic fluctuations would be avoided and monetary policy, on the marketplace. the large staff of economists, the 2008 financial crisis, in the current inflation. in the ecb in june, there -- they literally understand elation and i hope the conference will shed light on causes of inflation and monetary policy. the family foundation for supporting today's event, i think cato's excellent staff, especially nick anthony and graham and david cassidy and jonathan fields. thanks to our speakers and moderators for taking time to join us. let's begin with fed chairman jay powell, president and ceo of the cato institute. >> good morning, every one. it is my honor and privilege, the cato institute, before proceeding, i offer congratulations to you. cato has been an important voice in the monetary realm for four decades, no one contributed more than our colleague, as well as anyone. jim and i curated the monetary conference, and it is a manual institution. jim has presided, he point out our 40th. following the past 40 years of service, cato and our mission during which he created and edited our cato journal, jim will be retiring later this month, the title of senior american at the institute. i want to offer heartfelt thanks to your many contributions, one of the longest tenured employees and i offer best wishes, you will make your voice heard in policy debates in the policy world. i hope you reserve plenty of time for your wonderful family. now, with monetary conference. alan greenspan, with the federal reserve board of governors to address us. jerome powell first appointed as chair in 2018, no stranger to the fed, prior to his time as chair, served as member of the board of governors just starting 10 years ago. the one certainty that seems to come with position of fed chair, a time of great challenge. paul volcker confronted the last inflation, two months after his confirmation, been burning key -- led the federal reserve during the financial crisis, chairman powell served through the covid 19 pandemic in which we have seen inflation reach its highest level in 30 years. as we sit in front of zoom screens the last 2 and a half years i will speak for myself, when you watched as her hair turns gray her, and in chairman powell, with key policy issues, chairman powell, good to see you today. >> it is not failure of my imagination on my part nor would anybody be surprised. as jim mentioned, including at the fed, a head fake on inflation, in the pandemic and related to disruptions, this contributed, seems a stronger consensus in larger part policy debate. can you give us some insight into how you are thinking on this topic over the last year and 1/2 and how those conclusions are involved as well? >> congratulations to both of you and cato on 40 years of monetary policy conferences. a good entry point for that question is to start by recalling before the pandemic unemployment was at a 50 year low, inflation was low and stable. the economy was growing steadily with no obvious imbalance threatening continued expansion so in that sense, none of this high inflation around the world would have happened without the pandemic. the pandemic severely disrupted the economy, gave rise to risks of more dire economic consequences than transpired, thanks in part to policy response. there is no question that policy supported strong demand but in my view you would not have seen anything like the inflation we've seen without the pandemic effects and the pandemic affect include shifts in demand and a plan, playing a role in the supply-side constraints that emerged to. as for the pandemic it did lead directly to an x ordinary shift in in person services and that shift was a major contributor to inflation and goods prices which was the main inflation story it the beginning, when inflation broke out in march 2021. inflation actually declined in the early stages of the pandemic and suddenly rose up in march 2021. the pandemic contributed to the constraints supplied, in a number of important ways. including large and persistent reduction in the size of labor force which contributed to extremely tight labor market conditions and upward pressure and turmoil in global supply chains was probably caused to some extent by pandemic related shutdowns and goods demand. cars are good example. people had money and rates were low and demand for cars were strong but the pandemic shifted demand upward for cars because some people wanted to avoid public transportation that amped up new demand and shortage of semi conductors emerged from demand shift as well. the bottom line is there is a role for both here in the two were tangled up in a way that is not easy to disentangle. >> those of us who grew up in the 70s, the danger and cause of inflation, after he was confirmed, continue to bring it down, with reinforcement another economic place. the greater extent inflation slips the leash, the higher the cost and greater economic damage. with inflation under control today, with economic costs, i took comfort from that to signal that. the intense political pressure brought to bear to avoid collateral economic damage, i wonder if you can help me sleep a little better in that course. >> it is worth going back and remembering, i pointed this out in my remarks at jackson hole, what paul volcker did to get inflation under control followed several failed attempts to get inflation under control and what happened is the public had come to think of higher inflation as the norm and to expect it to continue and that made it so hard to get inflation down in this case so it is very much my view, forthrightly, strongly, until the job is done to avoid that. .. we can avoid the high social costs that paul voelker and the fed had to bring into play in order to get inflation back down and set us up for a long period of price stability. you know, that speech-- the point really the point really there was to deliver a speech that was narrowly focused on inflation, more direct and a lot shorter than typical jackson hole speech. and i thought that what was appropriate was a very kind of concised and focused message. to your question, the message really was that the fed has and accepts responsibility forpr pre stability, by which we need 2% inflation over time, that again to your question, the longer inflation remains well above target. the greaterab the risk that the public sees higher inflation as the norm and that has the capacity of raising the cost of getting inflation down. so finally history cautions strongly against prematurely loosening policy. i can assure you that my colleagues and i are strongly committed to this project, and we will keep i at it until the b is done. i can also assure you that we never take into consideration external political considerations. we are accountable to the public through congress. that's a very fundamental, important aspect of our work, but we do not -- we focused solely on the goals that congress has given us and that's what we're going to do here. >> i think that is really important because it's clear that we could see political pressure coming to avoid economic costs when there could be claims from political players that inflation is back in the box long before it is. jim mentioned in his opening remarks that two years ago he moved to a new framework, flexible average inflation targeting. i'm bringing this up now because again reiterate the point about trying to sleep better at night. i mean the account this move has created more uncertainty in the market as jim mentioned. and coming at a time when inflation now increase markedly and in spite of your statement of price stability has become less strong. should you consider modifications to theou framewor, the way and better manage short-term expectation? >> soo the framework, we begin the work on the new framework and 2018 and we announced the result in august 2020, and it and it really followed 25 years basically of global this inflationary forces. and the problem was that monetary policy rates were close to the effect of lower bound much too much of the time, much too close and the mentoring good times. so that meant central banks were having a hard time all over the world finding ways to support the economy when it was needed and that's why central banks including forward guidance and asset purchases. that's why we did that. the changesha we made were sortf a very mainstream part of a literature about makeup strategies, but really the point of our framework, the point of all of them was, and we said this very clearly, was rough inflation expectations well anchored at 2%. the average inflation targeting idea was meant to support having inflation expectations. that is a goal at 2% and and the reason is that we believe that the publics expectations of future inflation will play an important role in the actual path of inflation. so thatd is kind of the fundamental basis of our framework. as i just discussed, it is very important that inflation expectations remain anchored. i think the evidence today is that if you look at longer-term expectations by households, businesses and forecasters and also marketsts you will see they are pretty well anchored around 2%. of course short-term expectations are higher because of high current inflation and also the clock is ticking. t as a mention the longer that inflation remains well above target, the greater the concern the public will start to just naturally incorporate higher inflation into its economic decision-making. and our job is to make sure that doesn't happen and we're committed to doing that job. >> it seems to me there's a real risk that the labor market, that the labor shortages persist. does that create a risk that takes some of the ability to manage this process out of your hands, to the extent there continued to be labor shortages and feeds into the expectations that the public has about inflation, as mentioned prominently? prominently? >> i think you're right, if it does turn out that we are in a world of a persistent labor shortage over time, that will be a challenging world for companies and it will certainly create upward pressure on wages and that sort of thing. today, the labor market is -- demand is very, very strong still in the labor market and we're printing new payroll job numbers at high level wages are running it -- at elevated levels, so, we think by our policy interventions, what we hope to achieve is a period of growth below trend, which will take-- which will cause the labor market to get back into better balance and that will bring wages back down to levels more consistent with 2% inflation over time. that's what we're trying to achieve. the shock to labor supply that we got from the pandemic was large and unexpected and unfortunately persistent. i would say in the very last labor market report that we got last friday, we did see a welcomed increase in labor force participation. none of the less, a full percentage point where it was before the crisis and i think it's important, as a society, that we have measures in place to support a strong labor market and high labor force participation and that goes beyond what we can accomplish with monetary policy. >> you've made some contrast to how things are denver today. what's different today, you know, the high inflationary period, the late 70's and early 80's, i guess some other distinctions, i remember as a student in boston in the early 80's, in the days before the internet. i remember seeing people actually line up at the fidelity office on a weekly basis. the way that the money has changed dramatically since milton freedman says it's always a monetary phenomenon. and you answered in part in the first question, and the spike, and the fed printed all of this money and of course we have inflation. >> i graduated from college in 1975, which was close to peak monetaryism and there was a focus on monetary and i recall just as you do. so, to go to this current situation, so as part of your response to the pandemic, we did resort to large asset purchases to address what were pretty severe disruptions in markets and also to support the economy and our balance sheet expanded dramatically. remember, that our purchases for securities don't actually increase the quantity of government obligations held by the public. they really changed the mix because we issued bank reserves to pay for those securities so we're not changing the quantity of obligations. that's not to say that money growth wasn't high, it was extraordinarily high in 2020 and then slowed down in '21 and now it's sluggish, whatever cause -- there are different theories what caused the inflation to suddenly jump out of the ground in march of 2021, whatever at that cause was the he relationship between the money supply and inflation, economic output has been much more unstable than it was in freedman's day, for a very long time. and so literally changes in monetary ago gates have not had a consistent, reliable relationship, haven't been a good predictor of the economy or inflation. of course, the economy is ever changing and that, too, could change to where it is important again, but for now, and for really, many years now, monetary aggregates don't play a role in formulation of policy and not a good way for policy and it's more supply and demand and things like that. so, that's where we would be on that. >> that actually comes to mind at cato we have a strong aversion to a fully discretion fiat money system so we like to socialize and promote alternative frameworks that political policy and market direction that eliminates some of this discorrection. jim mentioned a consistent theme over the years this conference has been, you know, potential monetary rules and, you know, that kind of calls into inflation whether inflation and prices are the best to use for monetary policy. some folks advocated for rules-based system such as targeting nominal gdp as something we've heard about in recent years partly because as you say, money policy is not well suited to address supply shocks. can you share that type of approach and whether that's something that you would consider? >> so more broadly on rules, of course, on taylor rules have become part of the fabric of economic analysis and particularly money monetary analysis much greater than john taylor hoped when he wrote the article in 1993. no central bank and the fed has never explicitly tied our monetary policy decisions to any formula, including taylor rules, but taylor rules, nonetheless, are ubiquitous in all the work that we do. you have to have a way and a model of explaining how monetary policy will react and some kind of taylor rule is now very much part of the way, we think. in terms of nominal income targeting-- by the way i know at that cato is one of the home courts for targeting along with mercado and others. and i know this is a lot of well-known experts, many of them at your institution, you know, do support nominal income targeting and i'll just say that we've looked at that, and i've looked at that and come to the view that nominal income targeting is not the way to go. i'll try to explain. noi that these are well-known to the nonincome targeters and found to be nonpersuasive and nonetheless-- >> one thing i would interject, we have debates internally. and for us, the concept is really more wanting to socialize, a number of alternatives and try to move towards alternatives that do have more of a market basis and again, you know, remove discretion. >> i think that's a very healthy process and you know, the whole debate over many, many years of rules of discretion is a fascinating and important one, that's far from over, so, it's really a mix of the two, i think, that-- but getting to nominal income targeting, we've got a dual mandate and maximum price stability. is comes down to is non-income the best way to promote that, i don't think it is and part of that would be difficult to explain to the public explain na of nominal, non-gdp to those goals. it's a level of complexity that even some economists and policy makers struggle with, let alone the general public so it seems like it would be a reach to sort of put the-- you know, for us to have that be our fundamental framework. and a couple of examples that would be difficult, one in particular, would be what do you do with changes in trend growth? we have, you know, highly uncertain estimates of levels of trend growth that we amend down through the years and many years, you know, many years later we may have very different view, but it's broadly understood, i think, believed, thought, that trend growth has grown considerably since the global financial crisis and how do you put that into a target. raise contribution of inflation or annually reestimate trend growth and if you do that, incorporating communications issues and also, you know, just big chances of policy error because we don't know any of the variables, so to speak, with that level of certainty. so i'll just say that it's sort of really interesting and it works very well in models, but it seems difficult to implement from a practical standpoint and it's not something that we have chosen to do or that we are currently looking at. >> you mentioned there's no mandate. you know, i don't want to ignore this during the conversation. you know, when i said earlier that, you know, we obviously have an aversion to a, you know, fully discretionary monetary system, many of us also regret the adoption of the dual mandate in lieu of a strict focus on monetary stability. the fed's own website that maximum employment is driven by non-monetary factors, is that part of the mandate? >> peter, as you know, we're created by congress in statute and congress assigns our goals and assigned maximum price stability. it's my view that the dual mandate has served the public well and is generally workable. in particular, at the moment, i don't see the two goals as in conflict at all, because without price stability, we will not be able to achieve the kind of strong labor market that we want for a sustained period that benefits all. so i don't see a case to moving to a single mandate, but that's really a question for congress and you know, we will of course, implement whatever mandate congress gives us. to your point about maximum employment, it's true that-- and we do say that, that and have for some time that nonmonetary factors are really what drives the level of maximum employment which clearly changes through the business cycle and over time. but, we can and do assess that, and we do it transparency and congress has said that that should be a goal, co-equal goal of price stability and again, i don't think there's a strange case for changing that and i don't think it hampers us in our pursuit and i think we can achieve both goals in the medium term. you stole my follow-up. you started out saying that congress sets the mandate and so, my follow-up was going to be well, should they car changing the mandate and i think you've answered that and i guess the natural follow-up might be, is the dual mandate weren't enough, that's been talk about adding more, you know, more elements to, you know, the fed's objective, with racial equity, far from the fed's ability to address. in addition, you know, the fed's remit from the banking system to the broader financial system and its regulatory responsibilities were why they expanded in the wake of the financial crisis. how does continually expanding not undermine the focus of monetary stability beyond things such that, you know, the employment element of the mandate? >> so, i think our current mandate is appropriate and i do not-- i would not want to see it narrowed or broadened for that matter. we've got narrow and we've got well defined goals that we're supposed to pursue. what we get with that and what we've gotten is a precious grant to pursue those without direct political control. that's maximum employment price stability and i think that that dual mandate has served the public well, i really don't think that-- it would not be a good idea to broaden it to goals that might be mandates and achieve with our tools. more broadly than that, it's really important to stick to our assigned task and not those of congress. if we do that and do stray from core mandates, that will undermine the case for our independence. i think that fed independence is an institutional arrangement that's served the public well and i think that's pretty well-documented and accepted. >> i mentioned a couple of times, you know, our concerns about a fully discretionary system and one of the biggest of those concerns is that in the face of, you know, large economic dislocations, you know, we've been running what really amount to unprecedented experiments. you know, i would cite the, you know, quadrupling of the fed balance sheet in the wake of 2008 financial crisis and then, you know, doubling it again during the pandemic. you know, to your credit, it was right before the pandemic that you were beginning to move towards reducing the balance sheet. can you shed some light for us on where you hope to take the balance sheet over time, and you know, what's the way that you-- you know, really try to get there? do you see the fed ever moving back to a scarce reserve framework like it had before the 2008 crisis in. >> sure, so, in the last cycle, an of we ended our asset purchases, we froze the size of the balance sheet in 2014 and then allowed it to shrink passively, relative to the size of the economy, as it grew, the balance sheet didn't grow. in 2017, we began to allow maturing assets to run off and that went on until 2019. by the end of that period, we had a balance sheet that was significantly smaller relative to the size of the economy and smaller than it was overall. so, then we resumed asset purchases, as you know in 2020 and now we embark on shrinking the balance sheet and the test will be back to the level that satisfies the public's demand for currency and reserves and things like that, and also with the reserves maintained at levels consistent with our reserve regime. the balance sheet is substantially larger now obviously and consequently the runoff process is designed to be substantially faster than in the last cycle to the tune of on the order of a trillion dollars per round per year and once it's up to full speed. the process began in june and the pace of the balance sheet rises this month. the plans are spelled out in detail on our website around the january and may meetings. and of course, one thing we always say we're prepared to adjust the details of the plan based on economic and market developments at anytime. as far as returning to a scarce reserve regime, i guess i would say that i think that our current operating framework is a better one and i don't see a case for returning to scarce reserves. now, why is that? so the world has really changed as a result of the global financial crisis in the pandemic. the scarce reserve framework where there's sometimes volatile demand for assets, and central banks may need to rely on asset purchases from time to time in response to severe shocks and remember the large financial institutions hold very, very large quantities of safe assets now as a liquidity buffers and includes a lot of the reserves. the bottom line is that the quality of reserves is just so much higher, it would seem to be impractical to manage the scarcity and the demand will be volatile, too. so, it doesn't seem practical and again, we think that the current system works well and provides a lot of liquidity in the system which is kind of a net game. >> all right. and i thought it might be time to shift gears a little bit away from inflation and monetary policy. i remember on the first year i joined cato, i read an op-ed from the wall street journal advocating currency and kind of horrified at the prospect and said so in a letter to the editor, and since then, the fed has formally stepped into the digital currency ring and digital currency has obviously been a recurring theme in these conferences, but the fed has stepped into this arena with a discussion paper on a central bank digital currency and several speeches from fed governors. you know, our team has reviewed the more than 2000 comments that the fed's central bank and digital currency discussion paper received and find that about two-thirds of them are concerned or outright opposed to the idea. commenters raised concerns of financial privacy, financial oppression, and meetings in the bank system and some of the same concerns that led me to write that letter to the editor seven years ago. how can the serious concerns about freedom be reconciled with the digital currency? >> will et-- let me start we haven't made any decisions whether to issue a cbtc and look at the pros and cons and the questions, and expected that valuation process is going to take time appropriately so. secondly, we do not intend to proceed with issues of the cbtc without support of the congress ideally in the form of authorizing law. so we did get. it was gratifying, 2000-some comments and i won't tell you that i read those-- read all of them, but i read some of them and read the summaries and it's very, very-- a lot of very thoughtful concerns including the ones that you raised and there are things that we're considering very seriously. so we in our own paper we suggested that the cbdc in our jurisdiction should be privacy protected, intermediated, widely transferrable and identity verified. on privacy protection, very, very important and we all see what's happening with the digital rnb and you know, the a you shalls with privacy. we would know the want a world in which the government sees real-time every money transfer anybody makes, that would not be something that would be at all attractive in the american context. so privacy protection is going to be extremely important and we're attentive to striking a balance, of course, between law enforcement and privacy protection, but that can be managed in the same way that it's currently managed in the banking system or some similar way. in terms of another issue, really, is intermediatation, you know, and that really is a question if, say, you had an interest bearing cbdc, it could be attractive and draw deposits out of the banking system and limit credit availability. and that's another issue to be managed. i think one. things that actually cato mentioned and your was also the run-risk issue, are you creating very attractive in a panic or severe stress situation and that, you know, fostering runs. look, it's going to be, as i mentioned, it's going to be-- we think our role is this. we want to carefully and thoroughly analyze the public policy and technological challenges, public policy tradeoffs and technological challenges and that's what we're doing. the idea is that this will lead all of us to a better understanding of those tradeoffs and prepare the way for hopefully a well-informed decision on whether and when to issue a dollar, central bank currency. that's what we think our role is and we think that the fed is the right institution to do that, we can proceed without, you know, we're a non-partisan institution, non-political institution that can do these things and i hope support analysis and intelligent decision when it's time to make that. >> it's something we'll have a lot to say on in the future and as well, at least from the perspective of, you know, of privacy concerns and being a watch dog. you know, it's a very important role for cato. i do want to ask about cryptocurrency. you know, but first i should probably in fairness reveal that the gentleman who photo bombed janet yellen five years ago by holding up a buy bitcoin sign behind her during her humphrey hawkins testimony, earlier this year became my son-in-law, so that's a little disclaimer, i'm going to put out there. [laughter] >> but without debating the merits of cryptocurrency or products, i'll say that in the monetary arena, cato stands for nothing than desire to see interest in monetary policy and more people concerned about the discretionary fiat system and also, you know, we want to see private market innovation and experimentation in developing alternatives and crypto is such a great example of this. there's a long history of government and regulation thwarting such experimentation and innovation and which we find very disappointing. so, i'm wondering if you can respond to these concerns, namely that regulators might ultimately, you know, crypto to the extent that it does develop into a viable alternative system? >> so, talk about in two pieces. one is unbacked cryptocurrencies as such and those do not appear to offer, have not offered and do not appear to offer much in the way of public interest in using them as payments, let's say. it's really, it's really a-- it's not a great store value. what it is, it's speculative asset, not backed by anything. >> it could be an argument that's during the development phase and something that we could see emerge, but-- >> yes. >> be that as it may. >> and i also have close family members who offer that perspective vigorously as you suggest. [laughter] >> but stable coin is a different thing and the question is, are there forms of private money live stable coin which can play a role in our financial system which would-- and the answer is, of course, that we don't want to stand in the way of appropriate innovation, particularly including you know, digital innovation, but we think that something like that, which is, you know, purporting to be money would need to be appropriately regulated and you know, i hear that wide agreement on that, by the way, from a lot of the stable coin companies now are seeing that as part of getting to a place where they are a legitimate part of the financial system. so, i think you need regulation and people are going to think something is money, then it needs to actually have the qualities of money. and you know, if it doesn't, then you don't want-- i don't think you want to take money and make it into just another consumer product where sometimes it fails and sometimes it's good. you want it to be guaranteed to be good. if the public is going to look at it like it was a dollar, you would want to have clarity, transparency, full reserves of liquid, high quality assets and things like that, that's all. and i think that-- we need legislation on this just, you know, it's typical of technological innovations, there isn't a regulatory framework that really gets after payments, stable coins. you know, and so, i think that's what's needed, but don't-- i wouldn't think of us as being opposed to that kind of innovation, where more of the people saying, among others, that we need appropriate regulation. >> yeah, and the devil is ultimately in the details. while we have the debates, we would concede we're living in a world of innovation and promote add life touch, a market focus approach because there is, there is a real risk of, again, you know, having an impact on the development of innovations and thwarting what could be promising, promising and useful innovation. >> you know, and i agree with that. we don't want to be in that place, we want to be in favor of innovation, but also appropriate regulation. >> and ultimately, some of the people who end up driving, you know, the regulation might be-- you know, as you mention legislation. you know, the end product may not meet the objectives that you and i both say that we want. and another topic, you know, as long as i can remember successive chairmans have warned of unsustainable fiscal path. regrettably no one in congress and the white house seems to be listening. and i particularly during a period of high inflation i've been continually chagrinned at you know, the number of big spending bills that continue to come down the pike of legislation that's passed. you know, long after i think the crisis of the pandemic has ended. and the lessons of the financial crisis and covid might be keeping our fiscal house in order is essential as preparation to meet the challenges and inevitable economic dislocations, but the opposite lessons seems to have been learned that we can keep spending without a day of reckoning and i just, i'm very concerned about the day of reckoning and what risks we're playing for the economic well-being for future generations and i just wonder, you know, your thoughts on those concerns and you know, the potential timing of that day's arrival and its consequences. and whether you have any ideas how we can build a reconstituency for fiscal responsibility in america. >> so, i do share those concerns and in fact i was working on those issues before i joined the fed. at the fed, my position needs to be that fiscal policy is really the responsibility of congress and the administration. it wouldn't be appropriate for me to comment too much on specific policy proposals or laws. more to the point, with inflation running so far above 2%, this is probably an especially good time to focus on achieving our own mandate rather than doling out advice to others. but like my predecessors, i'll point out our fiscal policy is not on a sustainable path and it hasn't been for some time and we'll need to get back to a sustainable path sooner or later. to your point, sooner is better than later and i guess i'll just leave it at that. >> all right. thanks, we're getting close to the end of our time, so i'm thinking about a closing question. i wonder, with everything that we discussed thus far, what are some of the key lessons that you've learned since you became fed chair and what advice might you give to a lot of the young monetary scholars out there that cato and other places are working it develop? >> i guess i would say both experience and studying history are great teachers of what can be hard lessons. and i actually mentioned three lessons at jackson hole 10 days ago and those were first, that the fed does have and accept responsibility for price stability, even now, some are questioning that, but that, to us, is settled. secondly, that inflation expectations are really important and need to be carefully monitored because if they do move up, they can make the job of getting back to price stability so much harder and third is that, you know, the record is of-- there's a record of failed attempts to get inflation under control, which only raises the ultimate cost to society of getting under control, hence the need to do this job now and keep at it. so, those are three lessons. i would say more broadly, i know the really fundamental lesson to me the economy is ever changing and highly complex and you know, we see that today, around the world. many nations are experiencing the first high inflation in 40 years, all around the world. different countries have different competition and back stories, but it's really quite global and the question really is, is this going to be temporary thing that's really related to the pandemic in some way or is there actually something more structural and persistent happening? for example, if we're moving to a world where we're going to see more frequent, larger and more persistent supply shocks for whatever reason, that will have critical and difficult implications for the conduct of economic policy in particular. so this is not possible to know right now, but it's certainly a question that looms. i mean, to me, to sum it up, i would just say economics is not physics. there isn't any specific temperature in which the economy boils over. it does boil over from time to time and when that happens it often takes many years of analysis, discussion and debate to reach general agreement why that's happened. and the point is that we're always making monetary policy under high uncertainty about the structure of the economy and the path ahead. that makes our work challenging, and it also makes it getting it right very important for the people that we serve and we do think about that every day. so, our understanding of the economy has to evolve, as the economy evolves, as time passes we do learn more and i think it's okay to follow the evidence and change one's minds and the advice shouldn't be to say that to change their view and explain why. i find that refreshing when i see my view has evolved in the face of the evidence. and i guess one more word to close for this young researchers you mentioned, and this is a commercial for public service and for the fed. so the fed is a very special place where people can combine policy research with policy making, this is a place that has-- all of us have a very strong sense of mission in our work that's satisfying and that mission is to serve the public and our work really matters to the public. i would say there's no higher calling or more satisfying mission. so i hope that young researchers and economists and others will consider public service as part of their career for me it's been only a part, and particular consider working at the fed where you would be most welcome. >> thanks for that. i mean, i share the sentiments. you mentioned your work at the bipartisan research center and i met cato because i care about the future of our country and the future of course of liberty and freedom in america, and for the kind of world future generations are going to grow up with andth they're going to have the same opportunities that we have all had to live in a free country and to pursue their american dream and being part of that is a real privilege. i know, you know, at cato we work very hard toai raise consciousness of monetary policy and potential for monetary reform. we think this is a very important topic and that more americans should pay attention to it, even though it's complicated. we wish there were more policy organizations that would prioritize this policy area and raise their level of resources dedicated to this area. and as you know, mr. chairman, cato is not shy about being critical, and we enjoyed intellectually jousting with you and your team, but we also recognize that we share common goals and objectives for our country, and it's in the country best interest by which that jousting and those debates and areas of disagreement, it's within that context that they occur. and so i do thank you for your work. you're in a challenging position and i thank you very much for being part of this conference today. it's been a real pleasure. >> thanks, peter. the pleasure is mine, too. >> thanks so much, and i'm just going to let all the viewers know that we are goingng to be taking a break now until the top of the hour so we're going to reconvene with the next panel at 10 a.m. so we'll see you then. chairman powell, thanks very much again. great to have you. >> my pleasure. you, too. >> c-span2 jean filtered view of government. we are funded by the television companies and more including media,. >> the world changed in an instant but mediacom was ready. in that traffic soared and we never slow down. schools and businesses when virtual, and without a new reality because that beatty, we are built to keep you ahead. >> dod, support c-span as a public service along with these other television providers using the front row seat to democracy. >> coming at the day on c-span, the former of security for twitter testifies on allegations of privacy and security failures by the social media company before the senate judiciary committee. live at 10 a.m. eastern. at two p.m., house lawmakers return from their summer recess to work on a bill that eliminates the statutes of limitations for miners exposed to human trafficking or federal sex offenses. members will consider legislation regarding veteran compensation and va records. on c-span2, the senate is back at 10 a.m. to debate and vote on circuit court judicial nominations. and don c-span3 the senate armed services committee considers lieutenant general to lead you a space force operations. that confirmation underway at 9:30 a.m. eastern. everything also streams n the c-span now video app which is free to download on your mobile device. >> next, a retired military official discussed the role of veterans in promoting democracy. they explore the extent to which veterans should engage in partisan politics, whether as candidates for office or as regular citizens. and talk about the benefits of veterans getting involved and ie democratic process. the brogs