##necessarily 3 / 4 bis central bankers'speeches shorten the economic expansion while moving too slowly could result in rising inflation and inflation expectations down the road that could be costly to reverse. as i calibrate, in the months ahead, the pace and ultimate destination for monetary policy adjustments that will best allow the fed to achieve its dual - mandate objectives, it will be important to me to evaluate a wide range of economic and financial market indicators to complement the predictions yielded by model - based scenarios. as i look ahead, if strong growth and robust employment gains were to continue into 2019 and be accompanied by a material rise in actual and expected inflation, that circumstance would indicate to me that additional policy normalization might well be required beyond what i currently expect. by contrast, if strong growth and employment gains were to continue and be accompanied by stable inflation, inflation expectations, and expectations for fed policy, that situation, to me, would argue against raising short - term interest rates by more than i currently expect. conclusion in closing, with the economy operating as close as it has in a decade to the federal reserve's dual - mandate objectives of price stability and maximum employment, i believe monetary policy at this stage of the economic expansion should be aimed at sustaining growth and maximum employment at levels consistent with keeping inflation at or close to the 2 percent objective. even after our most recent policy decision to raise the range for the federal funds rate by 1 / 4 percentage point, monetary policy remains accommodative, and i believe some further gradual adjustment in the policy rate range will likely be appropriate. that said, at this stage in the business cycle, i believe it will be especially important to monitor a wide range of data to continually assess and calibrate the level of the policy rate that is consistent with meeting our objectives on a sustained basis. 1 i am grateful to antulio bomfim of the federal reserve board staff for his assistance in preparing this text. the views expressed are my own and not necessarily those of other federal reserve board members or federal open market committee participants. return to text 2 see erik brynjolfsson, daniel rock, and chad syverson ( forthcoming ), “ artificial intelligence and the modern productivity paradox : aclash of expectations and statistics, ” in ajay k. agrawal, joshua gans, and avi goldfarb, eds., the economics of artificial intelligence : an agenda ( chicago : university of chicago press ) ; an earlier version is

stringent targets and performance standards for market participants. to help alleviate counterparty credit concerns, regulators are also encouraging the development of wellregulated and prudently managed central clearing counterparties for otc trades. 5 just last week, we approved the application for membership in the federal reserve system of ice trust, a trust company that proposes to operate as a central counterparty and clearinghouse for cds transactions. the federal reserve and other authorities also are focusing on enhancing the resilience of the triparty repurchase agreement ( repo ) market, in which the primary dealers and other major banks and broker - dealers obtain very large amounts of secured financing from money market mutual funds and other short - term, risk - averse sources of funding. 6 for some time, market participants have been working to develop a contingency plan for handling a loss of confidence in either of the two clearing banks that facilitate the settlement of triparty repos. recent experience demonstrates the need for additional measures to enhance the resilience of these markets, particularly as large borrowers have experienced acute stress. the federal reserve's primary dealer credit facility, launched in the wake of the bear stearns collapse and expanded in the aftermath of the lehman brothers bankruptcy, has stabilized this critical market, and market confidence has been maintained. however, this program was adopted under our emergency powers to address unusual and exigent circumstances. therefore, more - permanent reforms are needed. for example, it may be worthwhile considering the costs and benefits of a central clearing system for this market, given the magnitude of exposures generated and the vital importance of the market to both dealers and investors. more broadly, both the operational performance of key payment and settlement systems and their ability to manage counterparty and market risks in both normal and stressed environments are critical to the stability of the broader financial system. currently, the federal reserve relies on a patchwork of authorities, largely derived from our role as a international standards for central counterparties have been developed, and national authorities should work to ensure that all covered entities adhere to these standards. see committee on payment and settlement systems and technical committee of the international organization of securities commissions, bank for international settlements ( 2004 ), " recommendations for central counterparties, " november. the benefits and costs of a central counterparty are discussed in " assessing the potential for instability in financial markets, " a speech delivered by randall s. kroszner ( 2008 ) at the risk minds conference, international center for