taking advantage of historically low interest rates to issue bonds at a robust rate. moreover, consumers with strong credit histories have ready access to credit cards and auto loans, supported by solid issuance of consumer - related asset - backed securities. banks also supply credit by purchasing securities, and their purchases have grown rapidly in recent months – in particular, those of agency - guaranteed mortgage - backed securities ( mbs ). in this challenging time for housing markets, banks are attracted by the securities ’ government guarantee. additionally, some larger banks may be accumulating these securities in preparation for more - stringent liquidity regulations. signs of improvement notwithstanding, credit conditions in some sectors and for some types of borrowers remain tight. mortgage lending is an important example. since its peak, u. s. home mortgage credit outstanding has contracted about 13 percent in real terms. many factors suggest that this situation will be difficult to turn around quickly, including the slow recovery of the economy and housing market, continued uncertainty surrounding the future of the government - sponsored enterprises ( gses ), the lack of a healthy private - label securitization market, and cautious attitudes by lenders. bis central bankers ’ speeches financing conditions in the commercial real estate sector also remain strained as fundamentals, including high vacancy rates, depressed property prices, and the poor quality of existing loans, continue to be weak. moreover, the market for commercial mbs – a source of liquidity for some lenders in this sector – is still struggling to regain its footing. the federal reserve ’ s quarterly senior loan officer opinion survey on bank lending practices ( sloos ) offers a more - nuanced view of how lending terms are changing. the sloos indicates that standards and terms in many loan categories have eased somewhat further in recent quarters from the very tight conditions that prevailed earlier in the recovery. 2 for example, the april sloos pointed to the first material net easing in lending standards for commercial real estate loans since 2005 and to a further easing of standards for most types of consumer loans. in addition, sloos respondents suggested that stepped - up competition has induced a large number of domestic banks to reduce fees and spreads on c & i loans to firms of all sizes. the sloos also indicates that demand for many types of loans has continued to increase, with demand for c & i loans having risen to relatively high levels. consistent with the results of the sloos, c & i lending has indeed been rising sharply lately

will be watching to see whether wages and other compensation continue to moderate or if they become a factor preventing progress toward our inflation goal. while i focus on the overall inflation numbers, it is still useful to look how the different components of inflation have moved. a big factor in the improvement of inflation over the past year has come from goods prices which fell during 2023. goods prices represent almost 25 percent of core cpi inflation. even at times of very low inflation, goods deflation is modest in a growing economy, so one question is whether this contribution to progress on inflation will continue. another big contributor to cpi inflation is the cost of housing services, which measures the estimated costs of renting or the equivalent for owning a home. housing cost inflation represents about 45 percent of core cpi inflation. there was a fairly steady 3 / 5 bis - central bankers'speeches moderation in housing services inflation in 2023, as the slowing in market rent increases since 2022 began to gradually show through to the housing services price index. but we saw an unexpected jump in housing services inflation in the january cpi data. i plan to be watching to see if housing costs continue to run at a higher rate than expected. the remaining component of core cpi inflation is services excluding housing. this category is about 30 percent of the index. inflation in this category moderated over the course of 2023 but in january there was a broad - based increase. since business services are heavily reliant on labor input, this segment of prices is naturally significantly influenced by labor compensation, such as wages and benefits. so, one question is whether relatively elevated labor costs prevent moderation in this large component of inflation. as i consider all these aspects of inflation, i have to say that i see predominately upside risks to my general expectation that inflation will continue to move toward the fomc's 2 percent goal. on the flip side, i see little reason to expect that inflation will run below 2 percent for an extended period given the strong economic fundamentals we are observing in gdp and employment. for these reasons, i am going to need to see a couple more months of inflation data to be sure that january was a fluke and that we are still on track to price stability. this brings me to the implications of this outlook for monetary policy. let me pause here and say that typically the fomc considers easing policy only when there are fairly clear signs that the economy could be in or close to a recession. but,