. s. capital proposal has been overwhelmingly negative, including from a broad range of stakeholders. i have previously spoken at length about my concerns with the proposal, and as public commenters have reviewed it, they have identified additional areas of concern. 3 in my view, the concerns are well - founded. the proposal acknowledged that the revisions, if implemented, would result in an estimated 20 percent aggregate increase in total risk - weighted assets across bank holding companies subject to the rule. individual impacts would vary not only by firm, but also by business line. for any particular business line or product, the aggregate impact of the proposed capital changes could result in a more significant increase, depending upon the firm's characteristics. consider the impact on business lines subject to the market risk capital rule. as noted in the proposal, the revisions to the market risk rule alone would increase risk - weighted assets from $ 430 billion to $ 760 billion for category i and ii firms, and from $ 130 billion to $ 220 billion for category iii and iv firms. 4 even this example ignores the additive capital increases from other aspects of the rule, such as the operational risk charge " overlay " that may separately result in a higher capital charge for the same business line, if that line is also generating fee income. the changes that may affect any particular financial product or service vary but could include impacts across all aspects of the proposal. for many of the derivatives and swaps activities in which banking entities engage, the aggregate impacts on different business lines could result from changes to the market risk rule, the calculation of credit valuation adjustments, and the treatment of securities financing transactions, among others. so far, what i have described are just the aggregate effects of capital increases that would appear within the four corners of the u. s. basel iii endgame proposal. we know that these changes do not exist in a vacuum. a particular firm can also be impacted by changes to the global systemically important bank ( g - sib ) surcharge and long - term debt requirements. the firm's business planning would also need to consider existing 3 / 7 bis - central bankers'speeches requirements, such as leverage and " total loss - absorbing capacity " requirements. by design, these elements are intended to be complementary, often seeking to capture different risks, operate as " backstop " capital standards, promote resiliency, and be available for recapitalization in resolution. despite the goal that the capital framework operates in a holistic fashion,

to rise at a solid pace. continued softness in consumer spending and weaker housing activity early in the second quarter also suggest less momentum in economic activity so far this year. payroll employment continued to rise at a solid pace in april and may, though slightly slower than in the first quarter, partly reflecting increased immigrant labor supply. despite some further rebalancing between supply and demand, the labor market remains tight. the unemployment rate edged up to 4. 0 percent in may, while the 1 / 7 bis - central bankers'speeches number of job openings relative to unemployed workers declined further to near its prepandemic level. labor force participation dropped back to 62. 5 percent in may, which suggests no further improvement in labor supply along this margin, as labor force participation among those aged 55 and older has been persistently low. at its current setting, our monetary policy stance appears to be restrictive, and i will continue to monitor the incoming data to assess whether monetary policy is sufficiently restrictive to bring inflation down to our target. as i've noted recently, my baseline outlook continues to be that inflation will decline further with the policy rate held steady. and should the incoming data indicate that inflation is moving sustainably toward our 2 percent goal, it will eventually become appropriate to gradually lower the target range for the federal funds rate to prevent monetary policy from becoming overly restrictive. however, we are still not yet at the point where it is appropriate to lower the policy rate, and i continue to see a number of upside risks to inflation. first, much of the progress on inflation last year was due to supply - side improvements, including easing of supply chain constraints ; increases in the number of available workers, due in part to immigration ; and lower energy prices. it is unlikely that further improvements along this margin will continue to lower inflation going forward as supply chains have largely normalized ; the labor force participation rate has leveled off in recent months below pre - pandemic levels ; and an open u. s. immigration policy over the past few years, which added millions of new immigrants in the u. s., may become more restrictive. geopolitical developments could also pose upside risks to inflation, including the risk that spillovers from regional conflicts could disrupt global supply chains, putting additional upward pressure on food, energy, and commodity prices. there is also the risk that the loosening in financial conditions since late last year, reflecting considerable gains in equity valuations, and additional fiscal stimulus could add momentum to demand,