this plausible path will come to pass. instead, it is important to consider the range of possibilities and the appropriate policy responses. for example, if inflation does not moderate or rises further this year, then, in my view, the policy rate will probably need to move well above 4 percent. alternatively, if inflation suddenly decelerates, then, in my view, the policy rate might peak at less than 4 percent. - 10 one thing that is more predictable and has a significant effect on tightening policy over time is the shrinking of the fed ’ s holdings of assets as maturing securities run off our balance sheet. starting this month, the fed is shedding $ 60 billion a month in treasury securities and up to $ 35 billion a month in agency mortgage - backed securities. this action effectively increases the supply of securities in the hands of private investors and will thus put upward pressure on interest rates, as private investors must now be enticed to hold these assets. all told, the fomc has taken unprecedented and decisive policy actions this year to quickly increase the policy rate in response to high inflation. but where we stand now is not good enough. though the labor market is strong, inflation is too elevated. so i support another significant hike in two weeks. after that, the tightening path will continue until we see clear and convincing evidence that inflation is moving meaningfully and persistently down to our 2 percent target. the pace of tightening is uncertain ; it will depend on the data. no matter what, i am ready and willing to do what it takes to bring inflation down.

because such an approach offers a near - term and cost - effective remedy to the systemic risks posed by hlis. challenges for the banking industry i strongly believe that both the official and private sectors have important roles to play in addressing the challenges arising from an increasingly complex and dynamic financial services industry. first and foremost, we hold banks accountable for ensuring that sound credit risk management standards are upheld and that these keep pace with financial market innovation. if competitive pressures lead to bad practices in one bank or the industry as a whole, our job as supervisors is to raise standards and ensure that sound practices are restored. in my remarks today, i highlighted a number of areas where progress has been made. of course, there is more work to be done by banks and supervisors. high on the agenda should be the development of more meaningful measurement of risk exposure and the implementation of effective stress - testing techniques. another important area that requires further industry attention is the measurement of leverage. finally, i believe that the industry should devote more thought to the appropriate valuation of positions during periods of market stress and illiquidity – which is particularly relevant to the use of collateral to protect against credit risk. these are just some of the broader issues arising from the ltcm experience and the market turbulence last fall. but i believe that we are meeting the challenge and have made quick and significant short - term progress. i look forward to your questions.