From federalreserve.gov|19 hr agoThank you, Dr. Ripoll. It is wonderful to be here at the University of Pittsburgh. I am honored to deliver the 2025 McKay Lecture in memory of Dr. Marion McKay, who led the economics department here for more than 30 years. I am especially humbled to have this opportunity, given the many significant contributors to the field of economics who have spoken in this series, including David Autor, Claudia Goldin, Bob Lucas, and Joe Stiglitz. I have been looking forward to this lecture for many months, because researching, discussing, and teaching economics have long been my favorite activities. I have been a professor for much longer than I have been a member of the Federal Reserve’s Board of Governors, which I joined three years ago. Today, I would like to discuss my outlook for the economy and my views on the path of monetary policy. For this speech, I will also offer recent historical context about how the economy arrived in its current position, take some time to review some concepts in economics, and, finally, discuss my approach to monetary policy at a time of increasing uncertainty. Over the past few years, the U.S. economy has grown at a strong pace, supported by resilient consumer spending. Currently, I see the economy as being in a solid position, though American households, businesses, and investors are reporting heightened levels of uncertainty about both the direction of government policy and the economy. For instance, the Beige Book, a Fed report that compiles anecdotal information on economic conditions gathered from around the country, had 45 mentions of “uncertainty.” That is the largest number of mentions of the word in the history of the Beige Book, up from 12 mentions a year ago. Consistent with elevated uncertainty, there are increasing signs that consumer spending and business investment are slowing. Inflation has come down considerably from its peak in 2022 but remains somewhat above the Federal Reserve’s 2 percent target. The labor market appears to have stabilized, and there is a rough balance between available workers and the demand for labor. The unemployment rate remains low by historical standards. post: Fed’s Cook: it’s appropriate to maintain current policy for now while watching data. post: Fed’s Cook: Uncertainty related to tariffs could cause the economy to weaken.