In parallel, the pandemic has heightened uncertainty, causing a sharp downturn in agents’ confidence and a heavy decline in the price of many financial assets. As a result, this year will foreseeably witness the heaviest declines in GDP since the Second World War in the advanced economies as a whole and since the Civil War in Spain’s case. Seeing the forceful impact on our economy through the statistical evidence of the past weeks and the difficulties that we are beginning to discern ahead of any future recovery mean, in fact, that the scenarios projected a month ago of more moderate declines in GDP are now rather unrealistic, as I shall set out. Second, at issue here is a crisis caused by a factor which, at least in principle, is temporary in nature - though probably more lasting than initially expected - and unrelated to the inherent workings of the economy. The duration of the shock is uncertain. However, it should be limited and make way for a recovery once we have controlled the disease. Yet as I shall go on to stress, it cannot be ruled out that, despite its temporariness, the wake of the crisis will also see structural damages and/or changes. It is important we should identify these promptly. The third and final characteristic I wish to highlight is the global nature of this crisis, which is going to land a most severe blow on the world economy.
Nonetheless, these developments will likely lead to some tightening in credit conditions for households and businesses, which in turn will weigh on spending. It is still too early to gauge the magnitude and duration of these effects, and I will be closely monitoring the evolution of credit conditions and their potential effects on the economy. The Federal Reserve has a dual mandate to promote maximum employment and price stability. These goals are intrinsically linked-price stability is essential to sustaining maximum employment over the long term and for the economy to reach its full potential. Right now, while there are some indications of gradual cooling in the demand for labor, the labor market remains very tight. Job growth continues to be robust. Job openings far outnumber applicants. And at 3.5 percent, the unemployment rate is near 50-year lows. That brings us to inflation. Inflation soared to a 40-year high of 7 percent last June, as measured by the personal consumption expenditures (PCE) price index. It has since  1/4  BIS - Central bankers' speeches  moderated to 5 percent, and the most recent data indicate that this trend of slowing inflation is continuing. Still, inflation is well above the FOMC's longer-run goal of 2 percent. This inflation target is an important bedrock principle for the FOMC. It provides a "North Star" for policy decisions and helps to improve the public's understanding of our goals and actions.1 We are committed to attaining-and maintaining-a sufficiently restrictive policy stance to achieve our 2 percent longer-run goal.