goals, we are seeing welcome progress, and i expect to see further progress in coming months. i am attentive to the risks on both sides of this expected path. i will carefully monitor inflation and indicators of inflation expectations for any signs that longer - term inflation expectations are evolving in unwelcome ways. should inflation move materially and persistently above 2 percent, we have the tools and experience to gently guide inflation back down to target, and no one should doubt our commitment to do so. just as it is important to be attentive to upside risks, it is also important to be attentive to the risks of pulling back too soon. in the previous monetary policy framework, the customary preemptive tightening based on the outlook to head off concerns about future high inflation likely curtailed critical employment opportunities for many americans and embedded persistently below - target inflation. the entrenched prepandemic combination of low equilibrium interest rates, low underlying trend inflation, and a flat phillips curve is likely to reassert itself after reopening is complete. this type of environment creates asymmetric risks, since the lower bound constraint means that policy can respond more readily when inflation surprises to the upside than to the downside. remaining steady in our outcomes - based approach during the transitory reopening surge will help ensure the economic momentum that will be needed as current tailwinds shift to headwinds is not curtailed by a premature tightening of financial conditions. the best way to achieve and sustain our maximum - employment and averageinflation goals is by remaining steady and clear in our approach while also being attentive to changing conditions.

that electronics bring to information flows. currently, deals are struck over telephones, perhaps with the assistance of voice brokers. the data from those trades must be entered into the firms ’ information systems. for some firms, data may even be keyed more than once. electronic systems allow the quick, accurate capture of data. the data can then be used to update risk management information systems rapidly. other benefits may be realized in firms ’ ability to manage their credit limits. a feature of many electronic systems is credit limits that are programmed into the system. this feature narrows the ability of rogue traders to expose firms without the knowledge of risk managers. just as electronic systems can generate data useful in internal risk management, they can also generate data about the market for financial instruments. the rapid growth and widespread acceptance of electronic brokering reportedly has made the pricing process more transparent in the foreign exchange market. dealers no longer have to do a transaction to discover where the market is trading. similar improvements in price transparency could be expected in other products. end - users in these products may also reap benefits if competition among dealers increases and bid - offer spreads narrow. 3. settlement status quo. currently, settling derivatives transactions requires lots of paper and manual labor. counterparties must confirm the details of deals with each other. the confirmation lists the economic features of the transaction as well as many legal terms. isda has developed templates for confirmations that market participants use for many products, but tailor - made confirmations may be necessary for certain products or certain counterparties. in some instances, confirmations are generated electronically, but for a range of products, the process is manual. even electronically generated confirmations often must be manually verified by counterparties. many confirmations are faxed between counterparties. s. w. i. f. t., an interbank messaging system, is used to confirm foreign currency options, forward rate agreements, and cross - currency swaps, but its usefulness is limited because both counterparties must employ the system. electronics thus are not the rule in confirmation processing. not surprisingly, the result has been significant backlogs. active dealers report hundreds of unconfirmed trades. a small but significant share may be outstanding ninety days or more. another feature of settlements in otc derivatives in recent years has been the development of collateral programs. us dealers, in particular, have rapidly expanded their use of collateral to mitigate counterparty credit risks. in these programs, counterparties typically agree that