The FOMC stated that it expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with its assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time.7 In addition, the Federal Reserve will continue to increase its holdings of Treasury securities by at least $ billion per month and of agency mortgage backed securities by at least $ billion per month until substantial further progress has been made toward the Committee’s maximum employment and price stability goals. In other words: Despite uncertainties, we are fully committed to supporting the economy through this period and reaching our maximum employment and price stability goals. We will continue to watch and learn and remain committed to using our full range of tools to help assure that the recovery will be as robust as possible. Conclusion I’ll conclude with this: Despite the progress so far in recovering from the recession, some of the numbers that I’ve shared are staggering. Families, businesses, and communities are struggling. Almost a year into the pandemic, there is still so much uncertainty. But despite the near-term challenges, the longer-term outlook for the economy has improved, and our actions of the past year position monetary policy well to support a strong, full recovery and achievement of our goals of maximum employment and price stability. With this progress in mind, I am hopeful for a time soon that looks “more like normal." Thank you.
The world is undergoing dynamic shifts The world around us is shifting dramatically. To understand this shift, we should pay attention to five megatrends. The first is the shift in global economic order with the rise of Asia, including the rising prominence of ASEAN. The gravity of the global economy is moving to the East. Being the sixth largest economy and home to around 650 million people, there is an abundance of opportunity, hope and dynamism in this region. The financial sector will no doubt, be a key player in further catalysing the growth of ASEAN countries. The second is the risks brought about by climate change. Tackling climate change may be one of the biggest challenges for humanity in building a sustainable and prosperous future. It could lead to devastating, wide ranging and irreversible damage to our economy, society and the way we live. Economic losses in itself could be very significant, as high as USD20 trillion. Insured losses from effects of climate change have already increased five-fold in the past 30 years. The third is the rising income inequality that can threaten the fabric of our society. Consider this. The top 1% of the population has captured twice the global income growth of the bottom 50% since 1980. Worse still, inequality has persisted despite large transfers of public to private wealth in many countries. The fourth is the rising populism and protectionist policies. This can be seen in inward looking policies and anti-establishment views that have become more entrenched in parts of the world.