Remarks at the 13th Annual Hyman P. Minsky Conference on the State of the U.S. and World Economies

It is a pleasure to be with you this afternoon. I believe it was Mark Twain who said that the most difficult thing of all to forecast is the future. And certainly the extraordinary difficulty currently in trying to discern U.S. macroeconomic prospects for the next year or so is not inconsistent with Twain's observation. It is hard to recall a period when the immediate, very near-term outlook for the economy was more uncertain, and when financial market perceptions were more volatile. As everyone at this conference is well aware, the Fed's Open Market Committee at its meeting back on March 18 thought the level of uncertainty was high enough to justify omission of its usual, so-called "bias" sentence from its policy directive and post-meeting announcement. Against this background, I want to do two things this afternoon. First, I will make a few comments about the outlook for the remainder of the year. Despite the title of this session, I will talk less about "prospects" in the usual sense of most likely outcomes, and more about the range of plausible possibilities. And there is a wider than normal range of possibilities currently that are in fact plausible in the sense of having relatively high probabilities. Statistically, the probability distribution of possible outcomes has fat tails. That's what I mean when I say the outlook is unusually uncertain. Second, I will focus a few minutes on how the Fed can most constructively approach this situation with monetary policy. As always, I remind you that what follows are my own views and they do not necessarily implicate any of my fellow FOMC colleagues.