about whether the borrower could actually repay. 10 servicers, too, turned out to have interests that were not always aligned with investors, and different tranches of investors themselves had competing interests that they tried to impose onto servicers. certainly, greater clarity about roles and responsibilities, and the associated compensation of participants in the origination and servicing chains, will help all parties understand, and properly align, incentives. conclusion having survived the financial crisis, it is now time to work together to build a consumer banking model for the future. it sure would be nice if we could build it in a laboratory or test it in a simulation. but we are all working in real time. the new model will be shaped by the scars of the past. policymakers will continue to craft regulation to prevent the practices that led to devastation in our entire economy as well as in the lives of individual consumers. investors will demand enough information to judge the ongoing performance of credit underlying debt securities. lenders will price and underwrite products to conform to regulation and avoid a recurrence of recent high loan loss experience. consumers will reengage slowly as confidence, income, and balance sheets strengthen. reinvention will bring uncomfortable change and uncertainty, but i believe that we are on the right path. we will need the active cooperation and sustained efforts of many quarters – all segments of the industry, consumers, and public policymakers – to get where i think we are going : toward a reestablishment of a financial services sector that is safe, transparent, efficient, and that effectively serves the needs of the real economy. i am confident we will get there. see benjamin keys, tanmoy k. mukherjee, amit seru, and vikrant vig ( 2010 ), “ did securitization lead to lax screening? evidence from subprime loans ”, quarterly journal of economics, vol. 125, ( february ).

the fomc raised the target range for the federal funds rate to 2. 25 to 2. 5 percent, which is in the summary of economic projection's ( sep ) range of estimates of where the federal funds rate is projected to settle in the longer run. in current circumstances, with inflation running far above 2 percent and the labor market extremely tight, estimates of longer - run neutral are not a place to stop or pause. july's increase in the target range was the second 75 basis point increase in as many meetings, and i said then that another unusually large increase could be appropriate at our next meeting. we are now about halfway through the intermeeting period. our decision at the september meeting will depend on the totality of the incoming data and the evolving outlook. at some point, as the stance of monetary policy tightens further, it likely will become appropriate to slow the pace of increases. restoring price stability will likely require maintaining a restrictive policy stance for some time. the historical record cautions strongly against prematurely loosening policy. committee 1 / 3 bis central bankers'speeches participants'most recent individual projections from the june sep showed the median federal funds rate running slightly below 4 percent through the end of 2023. participants will update their projections at the september meeting. our monetary policy deliberations and decisions build on what we have learned about inflation dynamics both from the high and volatile inflation of the 1970s and 1980s, and from the low and stable inflation of the past quarter - century. in particular, we are drawing on three important lessons. the first lesson is that central banks can and should take responsibility for delivering low and stable inflation. it may seem strange now that central bankers and others once needed convincing on these two fronts, but as former chairman ben bernanke has shown, both propositions were widely questioned during the great inflation period. 1 today, we regard these questions as settled. our responsibility to deliver price stability is unconditional. it is true that the current high inflation is a global phenomenon, and that many economies around the world face inflation as high or higher than seen here in the united states. it is also true, in my view, that the current high inflation in the united states is the product of strong demand and constrained supply, and that the fed's tools work principally on aggregate demand. none of this diminishes the federal reserve's responsibility to carry out our assigned task of achieving price stability. there is clearly a job to do