While monetary actions and communications tend to affect financial markets’ interest rates and asset prices almost immediately, their transmission to the financing conditions of households and businesses and, subsequently, to consumer prices, tends to be much more gradual as economic agents revise their decisions to consume and to invest slowly and, in some cases, infrequently.
As always, my remarks reflect my own views and do not necessarily represent the views of the Federal Reserve Board or my colleagues on the Federal Open Market Committee. Economic outlook Let me begin with an update on the U.S. economy. We are nearly two years into a moderate, sustained recovery from financial crisis and the worst economic downturn since the Great Depression.