Feral highway administrator gis testimony on the implementation of the Infrastructure Investment and jobs act. Other legislation passed by congress. Federal reserve Jerome Powell announced for the first time in more than a year that there will be a pause in Interest Rate hikes. Prior to his announcement the feds had raised rates 10 times since the march of last year. The fastest in more than 40 years. Speaking at aly press conference with the federal open market committee. Good afternoon. My colleagues and i remained squarely focused on our dual mandate to promote maximum employment and stable prices for the american people. We understand th hardship high inflation is causing and we remain strongly committed to bringing inflation back down to our 2 goal. Price stability is the sponsibility of the federal reserve. Witht price stability, the economy does not work for anyone. In particular we will not achieve a sustained labor Market Conditions that benefit all without it. Since early last year they hav significantly tightened the stance of Monetary Policy. We have raised our policy Interest Rate by five percentage pots and we continue to reduce our Security Holdings at a bri pace. Have covered a lot of ground and the full effects of our tighteningave yet to be ft. No matter how far we have come in tightening policy the certain Monetary Policy affecting the econy and potential headwinds from credit tightening, today we decided to leave our policy Interest Rate unchanged and continue to reduce our Security Holdings. Looking ahead nearly all Community Participants view it as likely that some further rate increases will be appropriate this year to bring it down to 2 over time. I will have more to say about Monetary Policy after a brief reviewing of econoc developments. The u. S. Economy slowed significantly last year and recent indicators suggest that ecomic activity has continued to expand at a modest pace. Although growth in Consumer Spending has pked up this year, activity in the housing sector remains weak. Largely reflecting mortgage rates. Higher Interest Rates and lower output growth appear to be weighing on business fixed investment. Committee particants generally expect a subduedrowth to continue. The median m projection has real grow at 1. 0 this year and 1. 1 ext year. Well below the median estimate of the no moral growth rate. The labor market remains very tight. Overpa the past three months, payroll job gains averaged a robust 283,000 jobs per month. Employment rate moved up but remained low i may at 3. 7 . There are some that supply and demand in the labor market are coming into better balance. The Labor Force Participation rate has moved up in rent months, parcularly for individuals age 2554 years. Nominal wage groh has shown signs of easing a Job Vacancies have declined so far this year. While the jobs to workers gap has declined, labor dand is still substantially exceeding the supply of available workers. Apple once he participants expect supply and demand coconditions in the labor market to come into better balance over time, easing upward pressures on inflation. The median and Unemployment Rate projection rises to 4. 1 at the end of this year and 4. 5 at the end of next year. Inflation remains well above our nger run 2 goal. Over the 1 months ending in april, total pce prices rose 4. 4 ne excludinghe volatile food and engy cegories at 4. 7 . In mayhe 12 month change in the Consumer Price index came in at 4 and the change in the core cpi was 5. 3 . Inflation has moderated somewhat since the middle of last year. Nonetheless, he continueso run high in the process of getting inflation back down to 2 has a long way to go. The median projection in the sep for total inflaon is 3. 2 this year, 2. 5 next year and 2. 1 in 2025. Excluding volatile food and Energy Prices is expected to run higher than tal inflation in the median has been revised up to 3. 9 this year. Despit elevated inflation, longerterm inflation expectations. To remainell anchored and reflected in a broad range of surveys and households businesses and forecasters as well as measures from financial markets. Theeds Monetary Policy actionsre guided by our mandate to promote maximum employment and stable prices for the american people. My colleagues and i are acutely aware that high inflation opses hardship especially for those least ae to meet the hires level of cost like food housinand transportation. We areat highly attentive to the risk that it poses to both sides of our mandate and we are strongly committed to returning inflation to our 2 objective. As i noted earlier, since early last year, we raise our policy rate by five percentage points. We hav been seeing the effects of our policy tighteng on demand andhe most Interest Rateensitive sectors of the economyakspecially housing and investment. It will take time, however, for the full effects to be realized, especiallyn inflation. The economy is facing headwinds ehfrom tighterredit conditions from households a businesses which are likely to weigh on economicctivity, hiring and inflation. The extent of these remain uncertain. In lightf how far we have come in tightening policy, monary policy affects the economy and potential hewinds from credit tightening, the committee decided at todays meeting to maintain the target range at fivefive and a quarter percent and to continue the process of significantly reducing our Security Holdings. As i noted ely, nearly all Committee Participants expect that it will be approiate to raise Interest Rate somewhat furtr by the end of the year. Considering how far and howast we have moved we judgedt prudent to allow the committee to assess Additional Information andts implications for Monetary Policy. In determining the extent of additional policy that may be approprie to return inflation to 2 over time, the committee will take into account the tightening of Monetary Policy, the legs at which it affects Economic Activity and inflation and economic and financial developments. Our sep, participants wrote down their individual assessments of inappropriate path for the federal funds rate based on what each participant judges to b the most likely scenario going forrd. If the economy evolves as projected, the median participant at the appropriate level will be 5. 6 at the end of this year. 4. 6 at the end of 2024 and 3. 4 at the end of 2025. For the end of this year, the median projection is a half a percentage point higher than our march projections. To add as always that these projections are not a Committee Decision or plan if the enomy does not evolve as projected after picy will adjust as appropriate to foster our ximum employment and price stability goa. We will ctinue to make our decions by meeting based on the totality of incomg data and their implications for activi b and inflation as well as the balance of risk we remain committed to bringing inflation back down to our 2 goal and to keep longerterm inflationn eectations well anchored. Reducing inflation is likely to requir below trend growth and some sofning of labor Market Conditions. Restoring price stabilitys essential to setab the stage for achieving maximum emploent and stable prices over the long run. To conclude, we understand that our actions affect communities, families and businesses across the country. Everythinge do is in service of our public mission. We will do everything w can to achieveur maximum employment and price stability goals. Thank you and i look forward to your questions. Thank you. Financial times. I am curious what gives you and the committee the confidence that weighting will not be counterproductive at a time where core inflation is still so elevated adjust rate sensitive sectors in housing while they felt the drag ofhe past fed action starting to recover in some regions and fincial conditions, you know, most recently easing. O, i guess i would go back to the beginning of this tighteng cycle. As we started our rate hikes early last year, we said three issues tt would need to be addressed kind of in sequence. The speed of tightening, the lel to which rates would need to go and i a period of time in which we need to keep picy restrictive. At the outset, the key issue was how fast to move rates up and mo very quickly by historical standards. Last decemr after four consecutive 75 basis pnt hikes we monitored 250point basic hundred basis point hike. It seemed to me to moderate the rateikes as we get closer to the rate destination. Consideringo notike at every meeting and ultately hold rates steady at this meeting i would say it is a continuation of that process. Th main issue that we are focused on now is determining e extent of additional policy that may be appropriate to return to 2 over time. The pace of the increase in the ultimate level or separate variables given how far w have come, it may make sense for rates to moveigher, but at a more moderate pace. I want to stress one more thing. The Committee Decision mad today was only about this meeting. We did not make any decision about Going Forward iluding what would happen at the next meeting. We did not decide or really discuss anything about going to an every other meeting kind of approach or reallyny other approach. We really were focused on what to do with this meeting. There was no possibility of july, and a sense of the initial support at this space for that move . It came up in the meeting from time to time, but really the focus was onhat to do today. Two things. The decision i do expect it will be a live meeting. Thank you. I was just wondering if you could help us understand the narrative here. It feels like there is been a level shift. Stronger gdp. Less of an emphasis on employment. Forwardth progress on inflation. I am wondering where is this inflation coming from . Will the labor market be stroer . You have doubled your estimate of gdp. Wh is happening here . You are right. The data came and consistent on the high side of expectations. If you go back, the last in march you will see that gwth moved up. These are not huge moves, but growth estimat moved up a bit. Unemployment estimates moved down a bit. Inflation estimat moved up a bit. All three of those kind of point in the same direction. Perhaps more restraint will be necessary than we thought at the last meeting. The level, frankly is pretty consistent, if you think about it. Where was trading early march. We have kind of gone back to that. Your question is wheres the disinflation going t come from . I do not think that the story has really changed. Theommittee has consistently said and believe that the process of getting inflation down will be a gradual one. It will take some time. I thinke you go back to the the part framework which is we think as good of an indicator as you can haveis Going Forward. You can start with good spirit we need to see continued healing an supply conditions. Definitely improved a substantial amount. They will say that it is not back to what it was. That is one thing and that should enable to continue to come down over time. In terms of Housing Service inflation, that is another big piece. You are seeing there new leases are coming in at low levels and it is really a matter of time is echoed through the pipeline. In fact, i think any forecast that people are makingight now about inflation coming down this year will contain a big dose of this year next year will contain a good amount of disinflation from that source. Again, probably going to come slower than we would expect. That leaves the big sector which is a little more than half of the core inflation. We see only the earliest signs there. It is a sector, a very broad and diverse sector. It would be wage costs. It is heavily laborintensive. I think many analysts would say getting inflation down there is to have continuing loosening and labor Market Conditions which we have seen. I can go through a number of indicators suggesting there has been some losing. We need to see that continue. The conditions that we need to see in place to get inflation down are coming into place. That would be meaning way below trend, aim market that would be good pipelines getting healthier andd healthier in that kind thing. Things are in place that we need to see. The process of them actually working on inflation will take some time. Wall street journal. Whatg is the value in pausig and signaling future hikes versus just hiking now. Notyi to be flippant. I dont lose weight just by buying a gymembership. I have to go to the gym. Higher end rate today. The majority going up by 50 basis points this year. Wh not just rip off the bandaid and raise rates today . First, i would say that the question of speed is a separate question from that at that lel i think that is our estimate, it is really a cumulation of how far to go. I mentioned how we got to those numbers. In termsee of speed, it is whati said at the beginning. As we get closer and closer to the destination and according to the ftp, we are not so far away from theou destination. It is reasonable, it is common see to go a little slower just as it was reasonable to go from 75 basis points from 50 to 25 at every meeting. The committee thought overall that it was a appropriate to moderate the pace, if only slightly. And theremo are benefits to tha. That gives us more information to make decisions. I think it allows the economy a little bit more time to adapt as we make our decisions Going Forward. We do not know the full extent of the consequences of the banking turmoil that we have seen. It would bee early to see those. We will have more time to see that unfolding. Just the idea that we are trying to get this right. If you think of the two things with separate variables, the decision makes sense. I know you said july is live. With only the june employment in the cpi report for june due to be released before the july meetg, you havehe survey after, somef bk earnings at early nt month, what information will they be using to inform their judgment on whether this is in fact a longer pause . I think you are adding that to the data we have seen since the last meeting. We chose to maintain rates at this meeting. Really ahreemonth period of data we can look at. Coi think it is a full quarter. You can draw more conclusions from that. We will look at those things. We will look at what is happening in the Financial Sector. We wil look at the data in the evolving outlooknd make a decision. Ga smiley withob the new york tis. Sort of the path for growth, the path for umployment and the path for inflation pretty notably. Since march, what has changed to make you think that inflation will be a lot more stubbor . Given that, do you feel confident that this is as high s you will revise the feral funds rate . Higher than 5. Terminal by the enof this cycle . On the first part, i just think we are following t dat. Also the outlook. I, think the labor market has surprised man if not all of the analysts overhe last couple years with the exaordinary resilience, really it isf just remarkable. If you think about it, that is what is driving it. Job creatn, s wages moving up. Supporting spending which is supporting hiring. It is t engine driving the economy. It is really the data. We aays write down at these meetings what we think the appropriate terminal rate wl be at the end o this year. That is how we do it. It is based on our own individual assessments of what he most likely path of the economy is. It can actually in reality end up being lower or higher. It is what people think as of today. It can move around during the period ork it could wind up bak in the same place. Iteally will be data driven. I cnot tell you i ever have a lo of confidence where we can see where the federal funds rate will be that far in advance. M chairman, thank you for the recommendation. Back at the end of mega thought risks were gting closer to being in balance. Is overall, is going. Credible evidence that inflation is copping out and beginning to come down. That is what we want to see. I think, we understand that cithere are legs, but it is been years since they began tightening. I think the are comfortable pausing is we are still, much of the tightening took place last summer and later into the year. I think it is reasonable to think some of that may come into effect. Stretching out into a more moderate pace is appropriate to make that judgment of sufficiency, more data over time. Thank you for taking our questions. I wanted to ask further on the lag effects. Considering when you o would hie again throughout the course of the year, are there things that u would expect to kick in as they come into effect . Have you learn things over the past year that give you some sens of timeline for when to expect themo come in . It i a challenging thing. It is stored hundred sort of standard thinking. Of course, these days, they began to tighten wl in advantage of actual rate hikes. We started talking about lifting off. A pretty gd estimate of where it will be going from 20 basis points to 200 basis points. Inne that sense, tighteng happens much sooner tha it used to. Not on the wire. So, that is different. Still the case that wha you see affected very, very quickly. Broader demand and spending and asset vaes and things like that, they just take longer. You can pretty much find research to support whatever answer you would like on that. There is not any certainty or agreement on how long it takes that makes it challenging, of course. We are looking at the calendar, we are looking at wha is happening in theconomy. One of the main reasons why it makes sense to go at a slightly more moderate pace now as we see that ultimate i cannot point to a specific data point. I think we will see ithen we see inflation really flattening teout and then starting to soft. I think we will know that i is working. Ideally, byel taking a little bt more time we will not go past a levele we need to go. Im curious if you can give me a update on what you are seeing on credit tightening spirit. Itmr is too early still to ty assess the full extent of what that may mean. It is something that we will be watching, of course. If weere to see what we would view as significant tightening beyond what would normally be expected bause of this channel , we would affect that into making rate decisions. That is h we think about it. Thank you. Asciatedress. Wanting to see core servis pretty well in the past couple of months. As you noted, a significant portion is now housing prices and we have had some quirks and used car prices. Given that this is in place, putting it aside, why signal additional rate hikes . Why not typically give i more time or, it is surprising to see so much hawkish in us. Remember, two and a half years into this. Two an a half quarter years intolu this and forecastersave consistently thought that inflation was about to turn down typicay forecasted that it wodve been wrong. I think that if you look at the core inflation overall, look at it over the last six months you are not seeing a lot of progress. It is running and its running at a level over four and a half percent. Below our target is not really moving down. We want t see it moving down decisively. We will get inflation down to 2 over time. We want to do that with the minimum damage we can to the economy of course. We he to get it down to 2 and we will. Writing down further rateikes by the end of this year but also tooderate somewhat the pace at which we are moving. A quick followup. The last press conference you mentioned you did not see wages driving inflation. They are not necessarily the key driver. You talked about the labor market tay and the need f softening. Can you tell u more specifically how you see a driving inflation at this point . Thank you. I am not going to comment on any particular paper. I would say that i think the overall picture,t the beginning, early 2021, inflation was becoming very Strong Demand largely for goods, people still e at home, they had money in the bank and they wanted to spend a lot. Because of that high demand t some extent, supply chain got all snarled up. That was the origin. Th it was not particularly about the labor market or wages. As you move into 21 and 222 and now 23, i think many analysts believe that it will be important, an important part of getting inflation especially in the services sector. Getting Wage Inflation back to a level that is sustainable consistent to 2 inflation. We have seen it broadly move down but at a quite gradual pace. Thats a little bit of the climbing of the paper a few weeks ago which is very consistent with what i would think. You said in the past that you do not like to surprise markets. It is kind of bee the fediew. Know what you are going to do before you go in. You also said a number of times that itat would take a wild to brin inflation down. Youeiterated that today. We get to a point where inflation could be sticky. As we go into the next mtings how wall street or other should look at your reaction, what will you be reacting i to . Time or data . If we are looking at the same sort of labor market, the same sort of inflation levels in july or september or november, will you move . You saids you feel you need to. Is it tim that will require Additional Movement or a reversal of inflation . I do a not want to deal wh hypothicals. Of course, we do not go out of ouray to surprise markets or the public. Our main focus has to be on getting thehe policy right and that is whatere doing here here. That is what we will do for the upcoming meetings. The july meeng will be live. We will just have to see. We will see theata, we will see fedud people talking about t and they will have to make a judgment. Do you think inflation is likely to contie to come down base on the legs and your threat of Additional Movement . Or wl we be at a period where we do notot know what is happening . If you just look i will point you to the forecast. Poor inflation running at four and a half, a little higher than four and a half percent. Things going down to 3. 9 on a 12 month basis. That is expecting pretty substantial progress. Thatat is a pretty significant decline for half of the year. That is the forecast. You know, we do try to be transparent in our reaction nction. Committed to gettingt inflation down. That is the number one thing. That is how i think of it. Could you talk about the Balance Sheet and how you are thinking about it. What are you looking forward to judge whether we are approaching reserves, scarcity and what will affecthat . Also are you considering lowering the rate to take mepressure off thanks . First of all, on the treasury part of it if i can talk about that and then go back to the Balance Sheet. We have been very focused on that for a couple of months. Barring plans publicly. I think we all saw it. Saw on the secretarys comments to the effect that the treasury has consulted widely how to avoid market disruption and they will watch carefully for that. That iss from the treasury which actually sets the borrowing. The fed will be monitoring Market Conditions carefully as the treasury resells the process. It is very likely to involve both a reduction in our facility and also in reserves. It is really hard to say at the beginning of ts which will be greater. We are starting at a very high level of reserves. We do not think that reserves are likely to become scarce in the near term or even over the course of the year. That is the treasury par of the answer. We will, of course, continue to monitor conditions in money markets and are prepared to make adjustments r monetary ttransmission working. Was there another part of your question . Yeah. Are you considering lowering the rate to help take pressure off things . I would say, it does not look like it is pulling money out of the bankin system. It is actually been shrinng here lately. It is not something that we have thought aut a lot over tim it really does not look like that is something we would do. I think i is a tool that we have. If we want t use it, we can there are other tools to address money market issues. I wou not say it i something likely we could do in the near term. Janelle marcy with bloomberg. Have you seen sufficient cooling in the Housing Market to bring inflation down . How does the recen rebound effect your forecast . How does it factor into Monetary Policy . Certainly, housing was very interest sensitive. One of the first places that as either held by rates are held back by higher rates. We have seen that over the past year. Maybe even moving up a bit. You know, we are watching tha situation carefly. I do think that we will see rent and house prices filtering into Housing Services inflation. I do not see them coming up quickly. I do see them kind of wandering around at a relativelyow level now. That is appropriate. Do you think you will have to targethat. Well, i think we look at everything. We do not justook at housing. Theer way it works is individuas sit in their offices all over the country and they write dow their forecast. Including their rate forecasts. They send a bit on friday afternoon and we accumulated a then we publish it. Th is how they do that. I dont know that housing is itself goi to be driving the rate picture, but it is part of it. Thank you for taking qutions. Foxbusiness. I want to go back to comments you madena in the past about punsustainable fiscal paths. Projecting the federal deficit to be 2. 8 triion in 10 years. Alsoso saying 52 million by 203. At what point do you talk more firmly wh lawmakers about fiscal responsibility . It cannot handle at the higher level of spending. I do not do that. That is really not my job. We hope and expect other policymakers will respect our Monetary Policy. We do not see ourselves as, you know, the judges of appropriate fiscal policy. Y. I wl say a many of predecessors have said we are on a nonsustainable physical path d it needs to be addressed over time. I think trying to get into that with lawmakers would be kind of inappropriate given our independence. Is there any conversation no. Under no circumstances. Thank you for taking our questions, chair powell. It looks like it was raised significantly. The Unemployment Rate meanwhile was pulled downwar. Should we take that as a sign that the committee is mo confident about the process of the st landing . At least as it relates to what you were expecting in march. You know, i would just say it this way. I continue to think in thi really has not changed,hat there is a path to getting inflion back down to 2 without having to see the sharp downturnn large losses of employnt that we have seen in so many past instances. It is possible in the way of a strong labor market ishat gradually cools could aid that along. I guess i want to com back to the mn thing which is simy this. As you can see from the sep, the committees completely unified and the need to g inflation down to 2 and will do whatever it takes to get it down to 2 , over time that is our plan. We understand that allowing ination to get entrenched into the u. S. Ecomy, the thing that we cannot allow to happe for the befit of todays workers and families and businesses, but also for the fute. Getting price stability back and restored will benefit generations of peoe, as long as it is sustained and it really is the bedrock of the economy. You have to understand that that is our top priority. Im just a little confused because you said the committee ll do whatever to get the inflation down. The fed funds rate is lower than where it is now. Can you help me understand that . Sure. If you look to i three years out with the forecast, first of all, i would not put too much weight on forecast even one year out because theyre so uncertain, but as inftion comes down in the forecast, if you dont lower Interest Rates , real rates are going up. Just to maintain a rl rate, the nominal rate two years out shou come down just to intain real rates. Ai actually, we are havingeal rates that will have to be meaningfully positive and significantly so for us to get inflatn down. That certainly mns it will be appropriate to cut rates at such time inflationme is cing down really significantly. We are talking a couple years out. Not a Single Person on the committee wrote down a rate cut this year nor do i think that it is at all likely to be appropriate. Inflation is not really move down. It is not reacted to our existing rate hikes. We will have to keept it. [inaudible] im sorry. Thankou. Rebounding for unemployment. Is it consistt with the mandate . We are, of course, the is longstanding differences in racial and ethnic groups across our market. That is a factor we cannot really addre with our tools. We are thinking about that. It is for us a broad and incluse goal. We do watch that. Remember, all unemployment including black unemploymen has been bouncing around right near historic lows. We are still talking about, i mean, a strong labor market in the last halfcentury here. Overall 3. 7 is three tenths higher than it was at the last, you know, a month ago. It is extraordinarily low. It is a very tight labor market. Thank you. I want t follo up on t rent question. We heard the governoralk about i will back up. We he not quite seen the slow do and we heard the governor talk about h it may mean that there willupot be as much relief coming or a shorter bit of relief than we thought. Can you talk about how youre thinking about thatnd how it played into todays outcome . As a factual matter, that is correct. We do need to see rents bottom outr at least stay quite low in terms of increases because we want inflation to come down and rental is a very large part of thee cpi. Abou half of that for the pce. It is important. It is something that we are watching very carefully. Take a stepack. What l you see, look atore inflation over the last six months, aot yea you just are not seeing a lot of progress. It is hard to avoid tt. Committee, people in the committee, going up significantl so that the meeting participa now thinks that core pce inflation will be 3. 9 thi year. Once again, every year for the past three years it has gone up in i its doing that again. We see that and we see that Inflation Forecasts are coming in low again and we see that that tells us we need to do more that is why you see the sep where it is. Could you also talked briefly about your outlook for wages. Excluding housing. How far you think they may need to fall i order to get inflation back in line. Wages will continue to increase. Having wage increases at a very strong level but at a level that is consistentt with 2 inflation over time. I think that we have seen some progress, all the major measures have moved down from extremely, highly elevated levels a year or so ago. They are moving back down, but quite gradually. Ua we want to see that process continue. It is great to see wage increases, particularly at the wer end of the spectrum. As part of the process of getting inflation back down to 2 which benefits everyone. It hurt so same people more than anyone else. Thank you souch. I just wondered if the committee has tked at all about the labor market and the stris now in hollywood and now the United Auto Workers are talking about a possible strike. Workers havepo power now. Seeking higher wages. Es that come up in your discussion . So, theopic of wages in t labor markeand dynamics in the labor market is about a central of a topico our discussion as anything. Labor economics i the labor rket are utterly centr. It is half of our mandate. We spent a lot of time talking about that. I thinkhere are structural issues tt are really not for the fed. So, we do not rlly spent a lot of time ahough we take notice of what is going on. We areot involved in discussions or debates over strikes and things like that. But we look and we see what is going on. We are making judgments about what it will take to get inflation down to 2 in the aggregate. Those folks would say it was not really about that, but wages at the beginning. Itbe is becoming more about that as we get into really Service Sector inflation which is a part of the ecomy where we have se the least progress. Thank you,r. Chairman. I am wondering what your thoughts are about Systemic Risk now that we are about three months past the failure of Silicon Valley bank. Also, specifically the risks of commercial real estate and nonbank financial spirit could you further elevate those risks with higher res possibly for longer. So, i am tryg to think of where to start for commeial real estate. We are watching that situation very carefully. A substantial amount inhe banking system. Large part of it is in smaller banks. It is well distruted. To the extent that it is well distribute we could take losses. There will be banks that have concentrations and those banks will experience large losses. We are well aware of that and we are monitoring itarefully. It feels like somethinghat will be around for some time as opposed to, you know, something that will suddenly hit and wor its way and Systemic Risk. Nonbank Financial Sector, there ha been a ton of work and clearly in the pandemic it was the nonbank Financial Sector wher issues really arose. A l of this going on with the administration, in partular leading that to try to address issues in the treasury market and the nonfinanal mart. Our jurisdiction is the fed is ov banks. That is really our main focus. You know, in tms of the events of march, as i mentioned earlier , we will carefully be monitoring that situatio our job generally involves wearing about aot of things that may go wrong. It may be hard for me to identify somethinghat we dont worry about rather than we do worry about so we are wating those things very carefully. As we see things unfold and as weut see what is happening with credit contions and also all the individual banks out tre, we will be able to take to the extent thatt is appropriate, macroeconomic implications we can take that into account in our rate setting. So, i guess that is what i would say. Do you risk further exacerbating those issuesis if u get off to moreasis points . I guess i met to address that. As we watch we will see what is happening. If we are seeing the kind of tighteningat of decisions that u could be referring to, then we could factor that. Our rate really has macroeconomic purposes so we will take it into account. We have responsibility for Financial Stability as well and that is a factor we will always be considering. Thank you very much. Watch video ondemand in a time online. Org and try our point of interest feature. Using markers to quickly guide you to newsworthy and quick highlights. Use points of interest anytime on cspan. Org. 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