Investor Presentaiton
Black Swans...
"Black Swans" are typically low probability, high impact events, but the term also refers to ideas that are
perceived impossibilities that may later be disproven. The events below are relative to the current
estimating conference forecasts.
The realization of co-occurring risks that could be handled individually, but not in combination. This would be a
stress not just on reserves, but also on human capital and technical resources.
A protracted and complete federal government shutdown in the midst of the remaining hurricane season. The
Congressional Budget Office (CBO) estimated that the 2018-2019 partial shutdown of five weeks reduced Gross
Domestic Product (GDP) by a total of $11 billion, including $3 billion that will never be recovered.
Mixed economic signals leading to a serious Federal Reserve miscue that causes unabated inflation and a deep
recession.
Inflation
Reduced
Savings
Household
Debt
Reduced
Spending on
Taxable Goods
"It is the Fed's job to bring inflation down to our 2 percent goal, and we
will do so. We have tightened policy significantly over the past year.
Although inflation has moved down from its peak—a welcome
development-it remains too high. We are prepared to raise rates
further if appropriate, and intend to hold policy at a restrictive level until
we are confident that inflation is moving sustainably down toward our
objective."
"Twelve-month core inflation is still elevated, and there is substantial
further ground to cover to get back to price stability."
"Getting inflation sustainably back down to 2 percent is expected to
require a period of below-trend economic growth as well as some
softening in labor market conditions."
"But we are attentive to signs that the economy may not be cooling as
expected... Additional evidence of persistently above-trend growth
could put further progress on inflation at risk and could warrant further
tightening of monetary policy."
Remarks by Jerome Powell, Jackson Hole, Wyoming, August 25, 2023
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