to 1 / 4 percent, where it remains today. the fomc anticipates that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time. with the federal funds rate close to zero, the federal reserve has focused on alternative tools to ease conditions in credit markets. we have established new lending facilities and expanded existing facilities that aim to enhance the flow of credit to businesses and households : we increased the size of the term auction facility to help ensure that banks could obtain the funds they need to provide credit to their customers ; we expanded our network of swap lines with foreign central banks to help ease conditions in global dollar markets that were spilling over into our own funding markets ; we established facilities to promote the functioning of money market mutual funds and the commercial paper market ; and we introduced the term asset - backed securities loan facility, or talf, which is designed to facilitate the renewed issuance of consumer and small business asset - backed securities. in addition, to improve the functioning of the mortgage market and to support housing markets and economic activity more broadly, the federal reserve has begun to purchase large amounts of agency debt and agency mortgage - backed securities. the measures taken since september by the federal reserve, other u. s. government entities, and foreign governments have helped improve conditions in some financial markets. in particular, strains in short - term funding markets have eased notably since last fall, and london interbank offered rates, or libor – which influence the interest rates faced by many u. s. households and businesses – have decreased sharply. conditions in the commercial paper market also have improved, even for lower - rated borrowers, and the sharp outflows from money market mutual funds in september have been replaced by modest inflows. in the market for conforming mortgages, interest rates have fallen nearly 1 percentage point since the announcement of our intention to purchase agency debt and agency mortgage - backed securities. corporate risk spreads have also declined somewhat from extraordinarily high levels, although bond spreads remain elevated by historical standards. likely spurred by the improvements in pricing and liquidity, issuance of investment - grade corporate bonds has been strong, and speculative - grade issuance, which was near zero in the fourth quarter, has picked up somewhat more recently. nevertheless, significant stresses persist in many markets. for example, most securitization markets remain closed, and some financial institutions remain under pressure. as i noted, the ongoing stresses in the financial markets have been accompanied

christopher j waller : getting closer speech by mr christopher j waller, member of the board of governors of the federal reserve system, at the federal reserve bank of kansas city, kansas city, missouri, 17 july 2024. * * * thank you, jeff, and thank you to the federal reserve bank of kansas city for the opportunity to speak to you today. 1 so far, 2024 has been a challenging year for economic forecasters, and for monetary policymakers. after significant progress in 2023 toward the federal open market committee's ( fomc ) price - stability goal, inflation jumped in the first quarter. at the same time, both the labor market and economic growth ran strong enough that some commentators wondered whether monetary policy was restrictive enough and whether rate hikes should be back on the table. these twists and turns in the economic data shifted everyone's expectations back and forth as to when the fomc might begin lowering its policy interest rate and how many cuts there would be this year. during this time, my consistent view was that there was no urgency to cut rates until the committee is confident that inflation is returning sustainably to 2 percent. then, in the second quarter, data on inflation and the labor market moderated in a way that suggests progress toward price stability has resumed. the data over the past couple months shows the economy growing at a more moderate pace, labor supply and demand apparently in balance, and inflation slowing from earlier this year. these are all developments that support progress toward achieving the fomc's dual - mandate goals. for reasons that i will elaborate on later, i believe current data are consistent with achieving a soft landing, and i will be looking for data over the next couple months to buttress this view. so, while i don't believe we have reached our final destination, i do believe we are getting closer to the time when a cut in the policy rate is warranted. before turning to the economic outlook, let me say a word about central bank communication - in particular, communication about the policy path. central bankers use communications to try, as much as possible, to describe the extent of progress, and even more importantly, the remaining path to the ultimate destination. the problem is that there may not be just one path to the ultimate destination - it depends on the incoming data. for example, when leaving work, you have a normal route to get home, and that is the base case for your estimated commuting time.