michelle w bowman : brief remarks on the economy, monetary policy and bank regulation speech by ms michelle w bowman, member of the board of governors of the federal reserve system, at the idaho, nevada, oregon and washington bankers associations 2024 annual convention, stevenson, washington dc, 27 june 2024. * * * i would like to thank the idaho, nevada, oregon, and washington bankers associations for the invitation to join you this morning. 1 it's a pleasure to be here in washington state to speak with your members. direct interactions like this, outside of washington, d. c., enable me to develop a deeper understanding of what is happening in the banking industry and the regional economy. before sharing some thoughts about the current trajectory of regulatory approvals and bank merger policy, i will discuss my views on the economy and monetary policy. update on the economy and monetary policy outlook over the past two years, the federal open market committee ( fomc ) has significantly tightened the stance of monetary policy to address high inflation. at our meeting earlier this month, the fomc voted to continue to hold the federal funds rate target range at 51 / 4 to 5 - 1 / 2 percent and to continue to reduce the federal reserve's securities holdings. after seeing considerable progress on slowing inflation last year, we have seen only modest further progress this year. the 12 - month measures of total and core personal consumption expenditures inflation have moved roughly sideways or slightly down since december and remained elevated at 2. 7 percent and 2. 8 percent, respectively, in april. the consumer price index ( cpi ) report for may showed 12 - month core cpi inflation slowing to 3. 4 percent from 3. 6 percent in april. however, with average core cpi inflation this year through may running at an annualized rate of 3. 8 percent, notably above average inflation in the second half of last year, i expect inflation to remain elevated for some time. the recent pickup in inflation in the first several months of 2024 was evident across many goods and services categories, suggesting that inflation was temporarily lower in the latter half of last year. prices continue to be much higher than before the pandemic, which is weighing on consumer sentiment. inflation has hit lower - income households hardest since food, energy, and housing services price increases far outpaced overall inflation throughout this episode. economic activity increased at a strong pace last year but appears to have moderated early this year. first - quarter gross domestic product growth was

, since digital channels make access easier and less costly. the sale of financial products and services using digital channels makes them accessible to people, even if they are not close to the service providers, as such products are generally simpler and more standardised. however, digital channels also come with new risks. starting with risks related to secure access and use of digital channels and the need to take adequate action to prevent fraud. then there is the risk of a less considered purchase of financial products and services, for instance borrowing without due clarification of associated financial conditions and of the consequences of default. in addition, digital channels are not a solution to include the most vulnerable groups, such as elderly people, who generally find it more difficult to use technology. therefore, though digital channels open up new opportunities, we must take into account the new risks. and likewise recognise that many of the traditional challenges of promoting financial inclusion remain the same. which also happens with the need for the financial inclusion strategy to be based on three pillars : 1. policies to promote financial inclusion ; 2. appropriate regulation of financial products and services ; and 3. initiatives to increase people ’ s financial education. 4. financial education is essential for the proper financial inclusion of people that presently have no access to the financial system and, particularly, to a bank account. financial education gives people basic knowledge and raises awareness for the need to be prudent when accessing and using bank products. one of the challenges of providing education for financial inclusion is to reach the audience that actually needs it, generally the more vulnerable population groups. one example in portugal is the challenge posed by promoting minimum banking services, which 2 / 3 bis central bankers'speeches consist of a basic bank account and basic payment services. institutions are required to provide such minimum banking services for a lower cost, but people in general are unaware of their existence, and even more so, those that are excluded from the financial system and who could benefit the most from it. naturally, financial education is not only important for those excluded from the financial system, but also for people in general, as it promotes a responsible and efficient use of financial products and services, raising awareness of advantages and risks associated with the products and services provided by credit institutions and of financial consumers ’ rights and obligations. greater understanding of financial products and of the financial system empowers people to make financial decisions and choices that meet their needs better. the promotion of financial education faces important challenges, one of them being, as i mentioned