##s to our liquidity regulations. i will share some perspective on how our liquidity regulations work together and are supportive of market functioning and the smooth implementation of monetary policy. the intersection of monetary policy tools and supervision and regulation 1 / 5 bis - central bankers'speeches we consider how all of the fed's tools work together to support our objectives. in previous speeches, i have talked about the role of the discount window and the standing repo facility ( srf ) in supporting both monetary policy implementation and financial stability, noting how important it is that eligible institutions be ready to use these facilities. 2 today i want to dig into this topic a bit more, including how these tools support monetary policy implementation through appropriate incorporation into liquidity regulations and supervisory practices. after the banking stress in march 2023, we saw a substantial improvement among banks of all sizes in their level of readiness to tap the discount window both in taking the necessary steps for set - up and in their pledging of collateral. since that time, over $ 1 trillion in additional collateral has been pledged to the discount window, and additional banks have established access to the srf. both of these facilities are potential venues for monetizing assets and raising liquidity to address volatility in private funding market rates or gaps in the availability of private - market funding. we had been hearing that some were confused about how banks could incorporate ready access to the discount window and the srf into their contingency funding plans and internal liquidity stress tests. supervisors have a role in assessing the viability of large banks'plans to meet stressed outflows in their stress scenarios, and we have been asked whether the discount window, the srf, and also federal home loan bank advances can play a role in those scenarios. the answer to this question is " yes. " we provided clarity to the public in august on permissible assumptions for how firms can incorporate the discount window and the srf into their internal liquidity stress - test scenarios. there are a couple of principles that underlie our response in the frequently asked questions we posted on the board's website. 3 one principle is that our tools are readily available to firms. this means that we see it as acceptable and beneficial for firms to incorporate our facilities to meet liquidity needs in both planning and practice. if firms plan to use our facilities, we expect them to demonstrate ex ante that they are fully capable of doing so, including through test transactions. an additional principle underlying our

donald l kohn : the outlook for inflation remarks by mr donald l kohn, member of the board of governors of the us federal reserve system, at the national economists club luncheon meeting, washington dc, 4 june 2004. * * * inflation has picked up this year, and by enough to raise questions in the minds of some about whether it might be on a rising trend that poses a risk to price stability. total consumer price inflation as measured by the chain price index for personal consumption expenditures ( pce ) has risen from 1. 4 percent over the twelve months of last year to an annual rate of 3. 0 percent over the first four months of 2004. of course, a portion of this acceleration is due to the faster increase in energy prices this year. but the strengthening in price increases has not been confined to energy markets. pce prices excluding food and energy have risen at an annual rate of 1. 7 percent this year, up from 0. 8 percent last year. the consumer price index has shown a similar pattern of acceleration. the recent shift up in inflation can be seen not just in the price indexes but also in attitudes, anecdotes, and expectations. businesses report that the prices of many inputs to the production process are increasing, and they also sense a return of “ pricing power ” that has allowed them to pass on at least some of these cost increases to their customers ; my impression is that of late a greater number of stories in general - circulation newspapers have focused on rising prices and their effect on households ; and expectations by economists and households of near - term inflation have moved higher. the commitment of the federal reserve to maintaining price stability remains strong and unaltered. price stability is our responsibility, and the record of the past thirty - five years demonstrates how important it is that we meet it. allowing businesses and households to plan and operate without worrying about increases in the general price level over the long run is how we contribute best to fostering economic efficiency and rising standards of living. a number of members of the federal open market committee ( fomc ), myself included, have been quite explicit in noting that the current level of the federal funds rate will not be consistent, over time, with the objective of preserving price stability. the question is what path of tightening is likely to be necessary to accomplish that objective, and the answer to that question will depend critically on the behavior of inflation. although inflation is ultimately a monetary phenomenon, the stance of policy -