income and assets. although some lenders may have used elements of nontraditional mortgage products successfully in the past, the recent easing of traditional underwriting controls and the sale of some types of nontraditional products to subprime borrowers may generate losses on these products greater than has been observed in the past. additionally, information from other sources seems to indicate that more borrowers are purchasing real estate with no equity down payment by using simultaneous second liens. the greater prevalence of risk - layering practices and sales of nontraditional mortgage products to nonprime borrowers have occurred in the past few years as competition for borrowers and declining profit margins has prompted lenders to loosen their credit standards to maintain loan volume in a slowing environment. the industry trends i have just described, taken together, were what led the federal reserve, ncua, and the other banking agencies to issue guidance on nontraditional mortgage products last september. the guidance emphasizes that an institution's risk - management processes should allow it to adequately identify, measure, monitor, and control the full set of risks associated with these products. it reminds lenders of the importance of assessing a borrower's ability to repay the loan, both now and when amortization begins and interest rates rise. nontraditional mortgage products warrant a bank having strong risk - management standards as well as adequate capital and loan - loss reserves. further, bankers should consider the impact of prepayment penalties for arms. lenders should provide enough information so that borrowers clearly understand, before choosing a product or payment option, the terms of and risks associated with these loans, particularly the extent to which monthly payments may rise and negative amortization may increase the amount owed above the amount originally borrowed. subprime mortgage lending the agencies'guidance on nontraditional mortgage products did not specifically address mortgage lending to subprime borrowers - although, as noted, nontraditional mortgage products are sometimes offered to subprime borrowers. both lenders and supervisors are aware of the benefits of subprime lending to homeowners, and both have an interest in ensuring that the market remains viable over the longer term. to ensure that viability, it is important to maintain sound underwriting standards and product terms as well as sufficient consumer protection practices. therefore, subprime mortgage lending continues to be an area that supervisors monitor closely. while overall mortgage delinquency rates remain low by historical standards, they have been increasing in recent months

mark it's held for the past two years, the longest stretch in five decades. and inflation - as measured by the personal consumption expenditures ( pce ) price index - 1 / 4 bis - central bankers'speeches continued to decline from its 40 - year high of about 7 percent in mid - 2022, reaching about 2 - 1 / 2 percent last year. given that we are in a museum that houses an actual lunar module - and all eyes are on plans to return to the moon - i cannot resist the temptation to use the mission to send astronauts to the moon as a metaphor for the economy. like traveling to the moon and back, inflation shot up, then came back down. and as with the apollo missions, it's the safe return home that's essential. while we've seen great progress toward achieving our goals, the journey is not yet over, and i am very focused on making sure we complete this mission successfully. a strong, more balanced labor market i'm going to spend some time digging deeper into the trends behind both sides of our dual mandate goals. i'll start with employment. as you'll recall, when the economy recovered from the pandemic, the labor market turned red hot. demand for workers far exceeded supply, and that imbalance contributed to rapid wage growth and high inflation. now, the labor market - both in the nation as a whole and here in the second district - has shown signs of returning to something closer to normal. nationally, many indicatorssuch as quits rates and surveys of perceptions of availability of workers and jobs - have returned to around pre - pandemic levels. throughout this process of getting into better balance, the labor market has remained strong. the current unemployment rate of 3. 7 percent is near my estimate for the unemployment rate that is likely to prevail over the longer run. and job growth continues to be solid. despite the very real progress in restoring balance, two important indicators point to lingering tightness in the labor market : job openings and wage growth. job vacancies, which reached all - time highs in the red - hot labor market of 2022, have trended lower since then, but are still quite elevated relative to pre - pandemic norms. and while we have seen measures of wage growth come down from their pandemic - era peaks, they remain above pre - covid averages. the return trip of inflation that leads me to the other side of our