? some argue that introducing a cbdc would improve financial inclusion by allowing the unbanked to more readily access financial services. to address this argument, we need to know, first, the size of the unbanked population, and second, whether the unbanked population would use a federal reserve cbdc account. according to a recent federal deposit insurance corporation ( fdic ) survey, 2 / 6 bis central bankers'speeches approximately 5. 4 percent of u. s. households were unbanked in 2019. 10 the fdic survey also found that approximately 75 percent of the unbanked population “ were not at all interested ” or “ not very interested ” in having a bank account. if the same percentage of the unbanked population would not be interested in a federal reserve cbdc account, this means that a little more than 1 percent of u. s. households are both unbanked and potentially interested in a federal reserve cbdc account. it is implausible to me that developing a cbdc is the simplest, least costly way to reach this 1 percent of households. instead, we could promote financial inclusion more efficiently by, for example, encouraging widespread use of low - cost commercial bank accounts through the cities for financial empowerment bank on project. 11 could it be that a cbdc is needed because existing payment services are unreasonably expensive? in order to answer this question, we need to understand why the price charged for a payment might be considered “ high. ” in economics, the price of a service is typically composed of two parts : the marginal cost of providing the service and a markup that reflects the market power of the seller. the marginal cost of processing a payment depends on the nature of the payment ( for example, paper check versus electronic transfer ), the technology used ( for example, batched payments versus real - time payments ), and the other services provided in processing the payment ( for example, risk and fraud services ). since these factors are primarily technological, and there is no reason to think that the federal reserve can develop cheaper technology than private firms, it seems unlikely that the federal reserve would be able to process cbdc payments at a materially lower marginal cost than existing private - sector payment services. 12 the key question, then, is how a cbdc would affect the markup charged by banks for a variety of payment services. the markup that a firm can charge depends on its market power and thus the degree of competition it faces

rapid effects on commodity and other import prices, but monetary transmission through economic slack appears to affect inflation more slowly. i believe that uncertain times require a risk - management approach to policy - settinglooking not just at the expected outcomes, but also considering the most salient risks in setting the policy stance. in the current situation, with risks to inflation forecasts skewed to the upside, i believe policy judgments must be based on whether and when we see inflation actually falling in the data, rather than just in forecasts. although most forecasts see considerable progress on inflation in coming years, it is important to consider whether inflation dynamics may have changed in a persistent way, making our forecasts even more uncertain. my perspective on monetary policy how do these experiences and the principles of data dependence and risk management influence my views on current monetary policy? in 2019, well before joining the board, i took part in the federal reserve's fed listens event in chicago. a key takeaway from fed listens was the value of a sustained strong labor market that brings people off the sidelines - those who have been on the margins but who have skills that can be developed and the desire to be part of the workforce, if given a chance. just two weeks ago, we held another fed listens event to hear how businesses, families, and communities are adapting to changes in the post - pandemic economy. notably, we heard about the burden that lower - and middle - income families are feeling from high inflation. these events highlighted for me the importance of achieving both our employment and price - stability mandates. in our current economy, with a very strong labor market and inflation far above our goal, i believe a risk - management approach requires a strong focus on taming inflation. inflation poses both a near - and long - term threat. aside from the immediate effect of higher prices on households and businesses, the longer it persists and the more people come to expect it, the greater the risks of elevated inflation becoming entrenched. i think it is critical that we prevent an inflationary psychology from taking hold. this is not simply an abstract concept, but a risk i take seriously based on personal experience. my time doing dissertation research in russia in the mid - 1990s taught me just how disruptive and painful an extremely high - inflation environment can be. reports over the past few months have shown high inflation to be stubbornly persistent, while the labor market has remained strong. being data dependent, i