For example, after declining earlier in 2022, the New York Fed's Multivariate Core Trend has been hovering around 3-3/4 percent for the past few months. In addition, measures of underlying inflation also remain elevated and well above our 2 percent longer-run goal. Although we have seen some moderation in recent months, the inflation rate remains far too high at 5 percent. Over the past year, the FOMC has taken strong actions to bring inflation down. And price stability is essential for the achievement of maximum employment on a sustained basis.
The Federal Reserve has a dual mandate, set by Congress, to promote price stability and maximum employment. Persistently high inflation also undermines the ability of our economy to reach its full potential. High inflation hurts everyone, but it's hardest on those who can least afford essentials like food, housing, and transportation. That's a level we had not seen for four decades, and one that is well above the FOMC's longer-term goal of 2 percent. Then, along with Russia's war against Ukraine, the pandemic contributed to skyrocketing inflation, which reached 7 percent last June, as measured by the personal consumption expenditures (PCE) price index. history, as well as an immediate spike in unemployment, the highest since the Great Depression. At the onset, we experienced the deepest - but also the shortest-recession in U.S. The pandemic contributed to dramatic swings in our economy - and economies around the world-that we are still grappling with today. As Rihanna sang at the Super Bowl, I hope you all have someone to stand under your umbrella.Įconomic developments over the past three years have been extraordinary. Second, I need to 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.Īnd third: I'd like to wish everyone a happy Valentine's Day. And, I'll give you my economic outlook.īefore I go further, I'd like to do three things: First and foremost, I want to thank the New York Bankers Association for inviting me here. I'll also talk about how we are using our monetary policy tools to restore price stability. Today, it should come as no surprise that I'll be spending much of my time discussing inflation, which remains my No. And we have benefited immensely from his thoughtful insights and perspectives. As you well know, a lot has occurred since Tom joined our board two years ago.
Our directors ensure that a diversity of viewpoints on economic and banking conditions are represented, so we can better understand and anticipate developments in our economy, both locally and nationally. It's a pleasure to share the stage with you today.Īs a member of the New York Fed's Board of Directors, Tom Murphy represents the Federal Reserve's Second District.
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