that the risks of either an untenable business model or high industry concentration, and consequent anti - competitive effects, were high. it is possible that a number of large, diversified financial holding companies would find an nfb a viable part of their operations. g - m require that nfbs be stand - alone entities, and specifically prohibit ownership by commercial banks in an effort to avoid implicit contractual guarantees. this is a legitimate concern, to be sure, but one that might be at least imperfectly addressed through specific restrictions on relationships between affiliates in a bank holding company. the relevant comparison is thus between the residual costs of the regulated relationship and the effects of an anti - competitive industry structure. a second variant on the g - m approach, also motivated by industry structure problems, would be to turn nfbs from privately owned public utilities ( as g - m describe them ) to actual public utilities. however, the extent to which this change in ownership structure would ameliorate the anti - competitive problems is uncertain. moreover, the concerns mentioned earlier with respect to government judgments on credit allocation would remain, even if they are provided another layer of insulation through the device of a government corporation. in addition, of course, the history of fannie mae and freddie mac is a cautionary tale of the potential for a government monopoly with a conservative mandate to expand its operation into much riskier activities. it also seems likely that the kinds of quantitative liquidity requirements currently under development by the basel committee on banking supervision would be difficult for nfbs to satisfy. at first glance, then, it is not at all clear that structural modifications to the basic g - m approach would be preferable to the proposal as they have described it. options that depart from the g - m approach would need to find different ways of solving the information problems that g - m identify. let me briefly speculate about possible alternatives that would use regulatory requirements to create a class of abs in which markets could, without inquiry into the nature and quality of the underlying assets, have confidence even in periods of stress. one way, of course, would be to follow more closely the deposit insurance analogy by establishing an insurance system. g - m suggest that an insurance system for the repo market would be impractical, question whether insuring collateral ( i. e., certain classes of securitized assets ) would be sustainable without creating franchise value, and worry that the creation of franchise value through limiting entry into securi

we are starting to see some adjustment to excess demand in interest - sensitive sectors like housing. but more needs to be done to bring inflation down meaningfully and persistently. i anticipate additional rate hikes into early next year, and i will be watching the data carefully to decide the appropriate pace of tightening as we continue to move into more restrictive territory. in considering what might happen to alter my expectations about the path of policy, i've read some speculation recently that financial stability concerns could possibly lead the fomc to slow rate increases or halt them earlier than expected. let me be clear that this is not something i'm considering or believe to be a very likely development. i am a little confused about this speculation. while there has been some increased volatility and liquidity strains in financial markets lately, overall, i believe markets are operating effectively. actions by banks and financial regulators in recent years have greatly strengthened the financial system. banks are well capitalized. functioning in the treasury, equity, and commodity markets remains orderly. one factor that is likely helping to stabilize the financial system is the existence of monetary policy tools which could serve as a backup source of liquidity in times of financial stress. for example, swap lines that the fed maintains with other central banks have been used effectively in the past to relieve stress in the financial system, and i think the availability of these facilities tend to be a stabilizing force at other times. in addition, to help implement monetary policy, the fed established new standing repurchase agreement ( repo ) facilities in july 2021, one for domestic counterparties and another for foreign and international monetary authorities. these facilities are capable of responding to strains that may put upward pressure on money market rates, but i think it is likely that their mere existence has been a stabilizing force. along with 5 / 6 bis - central bankers'speeches the improved regulatory framework, i believe we have tools in place to address any financial stability concerns and should not be looking to monetary policy for this purpose. the focus of monetary policy needs to be fighting inflation. 1 these views are my own and do not represent any position of the board of governors or other federal reserve policymakers. 2 see christopher j. waller ( 2022 ), " the economic outlook : time to let the data do the talking, " speech delivered at the 17th annual vienna macroeconomics workshop ( 2022 ), vienna, austria, september 9. 3 this estimate is calculated for pc