In terms of sector resilience, we believe that exercises are a key component of building marketwide preparedness for a cyber incident. In March, we told you about our forthcoming market-wide exercise, which we held in June. The exercise, UNITAS, took the form of a facilitated discussion among market participants – many of whom are here today – on a cyber scenario.
Forecasts made under such an assumption should better reveal the participants' views of the underlying structural parameters of the economy – the best possible tradeoffs between inflation and output stability in the short run and longer-term price and output trends – than would be made assuming an externally derived path for rates, such as the path implicit in market interest rates.