be looking carefully at the data to see whether the real side of the economy begins to cool off or whether prices, the nominal side of the economy, heat up. as of today, it is too soon to tell. consequently, i believe we can wait, watch and see how the economy evolves before making definitive moves on the path of the policy rate. should the real side of the economy soften, we will have more room to wait on any further rate hikes and let the recent run - up on longer - term rates do some of our work. but if the real economy continues showing underlying strength and inflation appears to stabilize or reaccelerate, more policy tightening is likely needed despite the recent run up in longer term rates. so i will be watching to see if core inflation comes in higher than expected, perhaps sustained by continued strength in spending and investment or, if demand and the real economy slow, moderating core inflation. my views on the appropriate path for policy will be based on a careful assessment of incoming data and financial market developments and a judgement about whether we are continuing on a path of sustained progress toward 2 percent inflation. 4 / 5 bis - central bankers'speeches thank you. i am happy to take some questions. 1 the views expressed here are my own and not necessarily those of my colleagues on the federal open market committee. 2 this fact holds for both auto and credit card delinquencies across all levels of the income distribution. 5 / 5 bis - central bankers'speeches

outcome that was one of our key objectives when we designed our interventions. the issuance of asset - backed securities ( abs ) backed by credit card, auto, and student loans has also picked up this spring, and abs funding rates have declined, developments supported by the availability of the federal reserve ’ s term asset - backed securities loan facility as a market backstop. in markets for longer - term credit, bond issuance by nonfinancial firms has been relatively strong recently, and spreads between treasury yields and rates paid by corporate borrowers have narrowed some, though they remain wide. mortgage rates and spreads have also been reduced by the federal reserve's program of purchasing agency debt and agency mortgage - backed securities. however, in recent weeks, yields on longer - term treasury securities and fixed - rate mortgages have risen. these increases appear to reflect concerns about large federal deficits but also other causes, including greater optimism about the economic outlook, a reversal of flight - to - quality flows, and technical factors related to the hedging of mortgage holdings. as you know, last month, the federal bank regulatory agencies released the results of the supervisory capital assessment program ( scap ). the purpose of the exercise was to determine, for each of the 19 u. s. - owned bank holding companies with assets exceeding $ 100 billion, a capital buffer sufficient for them to remain strongly capitalized and able to lend to creditworthy borrowers even if economic conditions over the next two years turn out to be worse than we currently expect. according to the findings of the scap exercise, under the more adverse economic outlook, losses at the 19 bank holding companies would total an estimated $ 600 billion during 2009 and 2010. after taking account of potential resources to absorb those losses, including expected revenues, reserves, and existing capital cushions, we determined that 10 of the 19 institutions should raise, collectively, additional common equity of $ 75 billion. each of the 10 bank holding companies requiring an additional buffer has committed to raise this capital by november 9. we are in discussions with these firms on their capital plans, which are due by june 8. even in advance of those plans being approved, the 10 firms have among them already raised more than $ 36 billion of new common equity, with a number of their offerings of common shares being over - subscribed. in addition, these firms have announced actions that would generate up to an additional $ 12 billon of common equity. we expect further announcements shortly as their capital