The Bank has been very intensively engaged in much of this work - with the Treasury in the G7, the G10, the new G20 and the IMF, with both the Treasury and the FSA in the new Financial Stability Forum; with the FSA also in the Basel Committee; and with our central bank counterparts in both the BIS and the ECB. All of this, too, points to the critical importance of coordination and cooperation, nationally between the Treasury, the Bank and the FSA, but also to an ever increasing degree with our various interested counterparts abroad. And in this context, given the international importance of the City, we, together with the FSA, have a particular role to play in engaging the private sector financial community in the consultation process: we have a common interest in the outcome. All of these developments, Chairman, pose major challenges both for market participants and for the authorities. But, for the markets at least, with major challenges come major opportunities. Our job is to help the markets take advantage of those opportunities by providing a stable and orderly financial environment within which markets can function more effectively. It is very much in the interests of the City that we should succeed. We - like you - have plenty to do. BIS Review 49/2000  4
He noted that President Harry Truman “wanted a one-armed economist, not the usual sort that analyzes every problem with ‘on the one hand, this, and on the other, that.’” Gross claimed that Fed Chair (Janet) Yellen, in her speech given recently at the Fed’s Jackson Hole, Wyo., conference, introduced so many qualifications about the status of the labor market that “instead of the proverbial two-handed economist, she more resembled a Hindu goddess with a half-dozen or more appendages.”2 Whether you analyze the labor markets with one arm or two, or six or 19, the issue is how quickly we are approaching capacity utilization, so as to gauge price pressures. After all, a central bank is first and foremost charged with maintaining the purchasing power of its country’s currency. Like most central banks around the world, we view a 2 percent inflation rate as a decent intermediate-term target. Of late, the various inflation indexes have been beating around this mark. Just this last Friday, the personal consumption expenditure (PCE) index for July was released, and it clocked in at a 1 percent annualized rate, a pace less than the run rate of April through June. Does this mean we are experiencing an inflation rate that is less than acceptable? I wonder. At the Dallas Fed, we calculate a trimmed mean inflation rate for personal consumption expenditures to get what we think is the best sense of the underlying inflation rate for the normal consumer.