determining how long to maintain the current 0 to ¼ percent target range for the federal funds rate, the committee will assess progress – both realized and expected – toward its objectives of maximum employment and 2 percent inflation. ” in assessing this progress, the committee reported that it will look at a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments. the fomc also noted, based on its assessment of these factors, “ that it likely will be appropriate to keep its target federal funds rate near zero for a considerable time after the asset purchase program ends... ” i objected to this forward guidance regarding the expected timing for raising the funds rate because i believe this language is no longer appropriate or warranted. appropriate monetary policy must respond to the data. i believe that by indicating that the fomc continues to anticipate that it will be a “ considerable time ” after the end of asset purchases before it is likely that the committee will raise interest rates does not reflect the significant progress made toward our goals. it also limits the committee ’ s flexibility to take action going forward. we have moved much closer to our goals since last december, and, accordingly, the stance of monetary policy should reflect such progress and begin to adjust gradually. that is the essence of being data dependent. in the current context, we must acknowledge and thus prepare the markets for the fact that interest rates may begin to increase sooner than previously anticipated. i felt that adjusting our language was the appropriate first step in responding to better - than - anticipated economic conditions. my view is informed, as i have indicated, by realized and projected economic progress toward our goals. but it is also influenced by guidance gained from the historical conduct of past monetary policy. in particular, my views on the appropriate funds rate setting are – and continue to be – informed by taylor - type monetary policy rules that depict the past behavior of monetary policy in response to deviation from its desired inflation target and economic activity from its natural or efficient level. i find such rules useful for benchmarking my policy prescriptions. these rules have been widely investigated and have been shown to be robust in that they deliver good results in a wide variety of models and circumstances. the guidance i take from such robust rules is that we should no longer consider monetary policy as being constrained by the zero lower bound. a variety of these rules, which i discussed in a speech earlier this summer, indicates that given the current inflation

the reserve banks, the board delegates authority to the staff in the 12 reserve banks to provide the boots on the ground for effective supervision of the covered institutions in their districts. as of february 17, 2015, there were five governors serving, with one more nominee awaiting senate confirmation. bis central bankers ’ speeches the reserve banks also act as the bank for the u. s. treasury. they work closely with the treasury to develop payment processes, such as making payments on the public debt, distributing payments to social security recipients, and so forth. the banks also support community development activities, including research and engaging organizations to find effective and impactful development solutions that promote the federal reserve system ’ s economic growth objectives in low - and moderate - income communities. setting monetary policy of course, most people think of the federal reserve as being responsible for setting and executing monetary policy. here, too, the reserve banks play an important role. in the early decades of operations, the reserve banks came to learn that buying and selling assets on the open market had an influence on the money supply. in fact, they found that if they didn ’ t coordinate their actions, they could encounter unintended consequences as they may act at cross purposes. so, in 1923, early leaders, such as benjamin strong in new york and george norris here in philadelphia, helped organize a committee to coordinate open market operations. this eventually led congress to formally create the federal open market committee, or fomc, as the formal body within the fed responsible for monetary policy. since the banking act of 1935, the composition of the fomc has included the seven governors in washington, d. c., the president of the new york fed, and the presidents of four other reserve banks, who serve one - year terms as members on a rotating basis. these rotations ensure that all regions are represented in the formation of monetary policy. the composition gives the board of governors the majority of votes. however, whether we vote or not, all reserve bank presidents attend the fomc meetings, participate in the discussions, and contribute to the committee ’ s assessment of the economy and policy options. the fomc has eight regularly scheduled meetings each year to set monetary policy. it discusses economic conditions and, in normal times, decides the path of short - term interest rates to achieve the goals of monetary policy that congress has set for us in the federal reserve act. when preparing for the fomc meetings, participants rely on their economic research departments to