limits, issue is addressed in title viii of the dodd - frank act, which calls for the separate designation and regulation of “ systemically important financial market utilities. ” this discretion is granted only for capital standards, not for the other prudential standards required by section 165. bis central bankers ’ speeches resolution plans, or the other mechanisms set forth in the dodd - frank act. i hasten to add that this is not an exhaustive list, but one designed to be suggestive of the directions in which systemic regulation should be heading. first, and fundamentally, it is important to recognize that the purpose of this special regulatory regime is macroprudential. it would be unrealistic, even dangerous, to believe that asset bubbles, excessive leverage, poor risk assessment, and the crises such phenomena produce can all be prevented. the goal of the regulatory regime should be to reduce the likely incidence of such crises and, perhaps more importantly, to limit their severity when they do occur. this argues for fostering a financial sector capable of withstanding systemic stresses and still continuing to provide reasonably well - functioning capital intermediation through lending and other activities. the aim is not to avoid all losses or any retrenchment in lending and capital markets. it is to prevent financial markets from freezing up as they did in the latter part of 2008. a second principle is that achieving the aim of preserving reasonably effective intermediation even in a period of significant stress requires steps to ensure that market actors are, in the main, willing to deal with another by providing the liquidity necessary to support intermediation functions. during the last crisis this willingness essentially disappeared. it was restored – and then just partially – only through extensive government programs that provided liquidity and capital to broad segments of financial firms and markets. much of the subsequent reform impulse has been animated by a determination to avoid a repeat of this result. but while ex ante restrictions on ex post government assistance may increase market discipline and thus mitigate somewhat the amounts of risk and exposure in the system, such restrictions alone will not make financial actors willing to deal with one another when a serious dislocation nonetheless occurs. a characteristic of a financial crisis is that the bursting of asset bubbles, shortage of liquidity, and sudden fragility of leverage combine with the opaque nature of the balance sheets of financial firms to produce high – sometimes extreme – levels of uncertainty as to how to value assets and assess the soundness of counterparties. it is precisely that

of services, such as health care, food services, transportation, and accommodations. twelve - month inflation in this sector has moved sideways since liftoff. inflation measured over the past three and six months has declined, however, which is encouraging. part of the reason for the modest decline of nonhousing services inflation so far is that many of these services were less affected by the normalization of dislocations due to the pandemic is likely playing a role here as well. for example, the shifts in housing preferences related to working from home likely contributed to the increase in housing demand reflected in the sizable earlier increases in rents. as the price effects of that demand shift played out, the growth rate of rents would naturally decline toward its earlier trend. finally, multifamily construction is quite high by historical standards, and that supply coming on line has likely also taken some pressure off market rents. pce prices for housing services include both the rents paid by tenants and an imputed rental value for owner - occupied dwellings ( measured as the income the homeowner could have received if the house had been rented to a tenant ). for additional details, see bureau of economic analysis ( 2022 ), “ rental income of persons, ” in nipa handbook : concepts and methods of the u. s. national income and product accounts ( washington : bea, december ), pp. 12 - 1 – 12 - 15, https : / / www. bea. gov / resources / methodologies / nipa - handbook / pdf / chapter - 12. pdf. - 5global supply chain bottlenecks and are generally thought to be less interest sensitive than other sectors such as housing or durable goods. production of these services is also relatively labor intensive, and the labor market remains tight. given the size of this sector, some further progress here will be essential to restoring price stability. over time, restrictive monetary policy will help bring aggregate supply and demand back into better balance, reducing inflationary pressures in this key sector. the outlook turning to the outlook, although further unwinding of pandemic - related distortions should continue to put some downward pressure on inflation, restrictive monetary policy will likely play an increasingly important role. getting inflation sustainably back down to 2 percent is expected to require a period of below - trend economic growth as well as some softening in labor market conditions. economic growth restrictive monetary policy has tightened financial conditions, supporting the expectation of below - trend growth. 5 since