, but i still see a number of upside inflation risks that affect my outlook. these include risks from geopolitical developments, including the risk of spillovers from geopolitical conflicts and the extent to which food and energy markets and supply chains remain exposed to these influences. there is also the risk that a loosening in financial conditions and additional fiscal stimulus could add momentum to demand, 1 / 5 bis - central bankers'speeches stalling any further progress or even causing inflation to reaccelerate. finally, there is a risk that continued labor market tightness could lead to persistently high core services inflation. recent labor market data suggest ongoing elevated wage growth as some businesses continue to report above - average wage increases to compensate for elevated prices and high inflation. given these risks, and the general uncertainty regarding the economic outlook, i will continue to watch the data closely as i assess the appropriate path of monetary policy. the frequency and extent of data revisions over the past few years, as seen in the most recent employment report, make the task of assessing the current state of the economy as well as predicting how the economy will evolve even more challenging, and i will remain cautious in my approach to considering future changes in the stance of policy. should the incoming data continue to indicate that inflation is moving sustainably toward our 2 percent goal, it will eventually become appropriate to gradually lower our policy rate to prevent monetary policy from becoming overly restrictive. in my view, we are not yet at that point. reducing our policy rate too soon could result in requiring further future policy rate increases to return inflation to 2 percent over the longer run. it is important to note that monetary policy is not on a preset course. my colleagues and i will make our decisions at each fomc meeting based on the incoming data and the implications for the outlook. while the current stance of monetary policy appears to be at a restrictive level that will bring inflation down to 2 percent over time, i remain willing to raise the federal funds rate at a future meeting should the incoming data indicate that progress on inflation has stalled or reversed. restoring price stability is essential for achieving maximum employment and stable prices over the longer run. notable developments in bank regulation and supervision as i look at the bank regulatory agenda, i am struck by the sheer volume of matters that have recently been completed, that have been proposed, and that are in the pipeline. these reforms touch on a wide range of topics that directly or indirectly impact banks of all sizes. this work shows no

##ed by the veil of supervisory opacity, can have significant financial and reputational impacts or can disrupt the management and operations of affected banks. these changes largely occurred after the bank failures in the spring of 2023 and the ensuing banking stress. in part, the changes in supervisory practices may be attributable to flawed post - mortem reviews conducted in the immediate aftermath of these failures. many of these reviews suffered from serious shortcomings, including compressed timeframes for completion and the significantly limited matters that were within the scope of review. nevertheless, these reviews were, and continue to be, singularly relied upon as a basis for resetting regulatory and supervisory priorities. these trends in supervision are concerning and add to the already significant burdens placed on regulated institutions from an aggressive regulatory reform agenda. i worry that the mere fact of bank failures and the material banking stress we experienced last year has been interpreted as a " blank check " to remake supervision as a blunt instrument, one that ignores the unique characteristics of each firm and the benefits of an approach that prioritizes engagement and communication between banks and examiners. of course, the banking agencies cannot regulate our way to better or more effective supervision ; in the aftermath of the banking stress, it is appropriate to look carefully at what is working, and what isn't, in the realm of bank supervision. but in doing so, we must appropriately manage our supervisory programs and teams to ensure that effective and consistent supervision is implemented within each firm, and that it is effective and consistent across our regulated entities. conducting supervision in a manner that respects due process and provides transparency around supervisory expectations can help us accomplish these goals. closing thoughts thank you again for the opportunity to speak with you today. we are experiencing significant changes in the banking industry, not least of which are those coming from the regulators. it is imperative that you continue engaging on all matters involving regulatory reform. policymakers cannot fulfill the responsibility of promoting a safe and sound banking system if we ignore efficiency, tailoring, and appropriate calibration of 4 / 5 bis - central bankers'speeches requirements in the reform agenda. these tenets should be central to the reform process. i welcome your insight on what is working, what is not, and the real - world consequences of regulations and regulatory reform efforts. your input helps us ensure that the bank regulatory framework supports safety and soundness in an efficient and fair way. thank you for your continued engagement, and i look forward to our conversation.