My message to you is: Don’t let last month’s temporary spike in SOFR, or hope for the creation of some other replacement reference rate, become an excuse for delaying your transition away from LIBOR. I’ve said it before and I’ll say it again: like death and taxes, the end of LIBOR is unavoidable, and we must do all that it takes to prepare for a LIBOR-less future.9 And the existence of LIBOR is only guaranteed for another 807 days.10 Conclusion I’ve talked through a lot of important issues this afternoon, and I greatly appreciate your attention. The events I’ve described are an apt reminder of the importance of well-functioning financial markets and the vital role the Federal Reserve plays in providing liquidity. They are also a demonstration of our ability to act swiftly and effectively to execute our monetary policy implementation goals and keep the federal funds rate within in the target range. Thank you. 1 Board of Governors of the Federal Reserve System, Statement Regarding Monetary  Policy Implementation, October 11, 2019; Federal Reserve Bank of New York, Statement Regarding Treasury Bill Purchases and Repurchase Operations, October 11, 2019. 2 Board of Governors of the Federal Reserve System, Statement Regarding Monetary  Policy Implementation, October 11, 2019. 3 Board of Governors of the Federal Reserve System, Statement Regarding Monetary  Policy Implementation and Balance Sheet Normalization, January 30, 2019. Further details were announced in Board of Governors of the Federal Reserve System, Balance Sheet Normalization Principles and Plans, March 20, 2019.
As prepared for delivery  Good afternoon, everyone. When I give a closing keynote I try to bear in mind that you’ve been listening for hours to complex and technical material. I wish I could say that I’m here to offer some light relief, but, alas, no. The topic I’m going to address this afternoon is both complex and technical. It’s the recent turmoil in the repo markets and the Fed’s actions to address it. I’m going to start by laying out the Fed’s operating framework for carrying out monetary policy. This will take me into aspects of the “plumbing” of the financial system, which may seem like an esoteric topic to many, but it’s one of critical importance, so please bear with me. I will then go over the money market turmoil from a month ago that led the New York Fed to conduct open market operations to stabilize short-term interest rates. I’ll conclude by describing the path forward as laid out in the Fed announcements this past Friday.1 Before I go any further, I should give the standard Fed disclaimer that the views I express today are mine alone and do not necessarily reflect those of the Federal Open Market Committee or others in the Federal Reserve System. Monetary Policy, Interest Rates, and Ample Reserves As a prelude, it’s worthwhile to step back and remember how this all connects to the Fed’s overarching monetary policy goals. The Federal Reserve has two goals set by Congress: maximum employment and price stability.