, by far its largest historical size. for a discussion of these series and the business cycle, see jeremy j. nalewaik ( 2010 ), “ the income - and expenditure - side estimates of u. s. output growth, ” brookings papers on economic activity, spring, pp. 71 – 106, https : / / www. brookings. edu / wp - content / uploads / 2010 / 03 / 2010a _ bpea _ nalewaik. pdf. - 2the concentration of strong consumer spending in supply - constrained sectors has contributed to high inflation. consumer spending is in the midst of an ongoing but still incomplete rotation back toward pre - pandemic patterns. real spending on goods has declined modestly in each of the past two quarters, while real spending on services has expanded at about half its 2021 growth rate. even so, the level of goods spending remains 5 percent above the level implied by its pre - pandemic trend, while services spending remains 4 percent below its trend ( figure 3 ). in addition to the fiscal drag and tighter financial conditions, high inflation — particularly in food and gas prices — has restrained consumer spending by reducing real purchasing power. while price increases in food and energy are weighing on discretionary spending by all americans, they are especially hard on low - income families, who spend three - fourths of their income on necessities such as food, gas, and shelter — more than double the 31 percent for high - income households. 3 since the very elevated prices at the pump in june, the nationwide average price of a gallon of regular unleaded gasoline has declined every day throughout july and august, most recently falling below $ 4 a gallon, according to the american automobile association. 4 the rise and fall of gasoline prices played a major role in the dynamics of inflation over the summer, contributing 0. 4 percentage point to month - over - month personal consumption expenditures ( pce ) inflation in june and subtracting 0. 2 percentage point in july. this 0. 6 percentage point swing in the contribution of gasoline for more details on this difference and further information on how the effect of inflation varies across households, see lael brainard ( 2022 ), “ variation in the inflation experiences of households, ” speech delivered at the spring 2022 institute research conference, opportunity and inclusive growth institute, federal reserve bank of minneapolis, minneapolis, april 5, https : / / www. federalreserve. gov

einars repse : links between the central bank and financial markets after the establishment of the financial and capital market commission in latvia speech by mr einars repse, governor of the bank of latvia, at the conference “ banking and finance in the baltics 2001 ”, held in riga, 19 september 2001. * * * since 1st of july 2001, the financial and capital market commission ( fcmc ) has taken over the regulation and supervision of the latvian banking system from the bank of latvia. it is widely recognized that banking supervision was handed over to the new institution in good shape. the banking sector in latvia is solid, adequately capitalized and well regulated in conformity with the european union ( eu ) standards. this was confirmed by the joint international monetary fund and world bank financial sector stability assessment that took place in the first half of this year. the fcmc is now the primary institution responsible for stability and development of the financial market in latvia. however, this does not mean that the overall stability of the financial system as a whole has become less important for the bank of latvia. both institutions will continue to cooperate, as adequate monitoring of financial stability requires a combination of ‘ ‘ macro ’ ’ and ‘ ‘ micro ’ ’ perspectives. in the future, the bank of latvia will concentrate more on macro - prudential analysis, while the commission - on supervision and regulation at the micro level. pursuant to the law “ on the bank of latvia ”, the central bank has to implement monetary policy in latvia by controlling the amount of money in circulation with the aim to maintain price stability. robust health of the financial sector is essential to ensure an efficient monetary policy transmission mechanism. therefore, stability of the financial and banking system will remain an important issue for the bank of latvia. only a sound and competitive banking sector will be able to : • intermediate savings efficiently, thus contributing to the economic growth ; • provide transaction services and payment systems that increase the efficiency of economic activities ; • ensure mutual confidence among banks, which is a precondition for smooth functioning of money and securities markets, through which monetary policy is transmitted ; • contribute to the accuracy of the data needed for the formulation of monetary policy ; • and, last but not least - support exchange rate stability, as a sound banking system serves to stabilize foreign exchange market and diminish exchange rate volatility. the bank of latvia has the ability and possesses the necessary tools to influence the market environment : • the commitment to maintain a fixed exchange rate has