Jerome H Powell: Data-dependent monetary policy in an evolving economy

Speech by Mr Jerome H Powell, Chair of the Board of Governors of the Federal Reserve System, at "Trucks and Terabytes: Integrating the 'Old' and 'New' Economies", 61st Annual Meeting of the National Association for Business Economics, Denver, Colorado, 8 October 2019.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Thank you for this opportunity to speak at the 61st annual meeting of the National Association for Business Economics.

At the Fed, we like to say that monetary policy is data dependent. We say this to emphasize that policy is never on a preset course and will change as appropriate in response to incoming information. But that does not capture the breadth and depth of what data-dependent decisionmaking means to us. From its beginnings more than a century ago, the Federal Reserve has gone to great lengths to collect and rigorously analyze the best information to make sound decisions for the public we serve.

The topic of this meeting, "Trucks and Terabytes: Integrating the 'New' and 'Old' Economies," captures the essence of a major challenge for data-dependent policymaking. We must sort out in real time, as best we can, what the profound changes underway in the economy mean for issues such as the functioning of labor markets, the pace of productivity growth, and the forces driving inflation.