Introduction  Thank you for the invitation to address you on this important occasion. Since this is a function to recognise the efforts of economic analysts to predict the future, it is fitting to share a few thoughts on the challenges and serious issues that confront both model-builders and forecasters in these most difficult and turbulent times.
My focus, therefore, is on bringing inflation back down to our 2 percent target. I am heartened to see measures of medium- to long-term inflation expectations falling in the surveys from the New York Fed and the University of Michigan. Although those declines may partly reflect falling gasoline prices, they provide some evidence that inflation expectations are well anchored.