reduce pressure on car prices. importantly, we see little indication that the higher rate of inflation experienced so far this year has become ingrained in the economy. longer - term inflation expectations have remained stable according to the indicators we monitor, such as the measure of households ’ longer - term expectations from the thompson reuters / university of michigan survey, the 10 - year inflation projections of professional forecasters, and the five - year - forward measure of inflation compensation derived from yields of inflation - protected treasury securities. in addition to the stability of longer - term inflation expectations, the substantial amount of resource slack that exists in u. s. labor and product markets should continue to have a moderating influence on inflationary pressures. notably, because of ongoing weakness in labor demand over the course of the recovery, nominal wage increases have been roughly offset by productivity gains, leaving the level of unit labor costs close to where it had stood at the onset of the recession. given the large share of labor costs in the production costs of most firms, subdued unit labor costs should be an important restraining influence on inflation. monetary policy although the fomc expects a moderate recovery to continue and indeed to strengthen over time, the committee has responded to recent developments – as i have already noted – by marking down its outlook for economic growth over coming quarters. the committee also continues to anticipate that inflation will moderate over time, to a rate at or below the 2 percent or a bit less that most fomc participants consider to be consistent with the committee ’ s dual mandate to promote maximum employment and price stability. given this outlook, the committee decided at its august meeting to provide more specific forward guidance about its expectations for the future path of the federal funds rate. in particular, the statement following the meeting indicated that economic conditions – including low rates of resource utilization and a subdued outlook for inflation over the medium run – are likely to warrant exceptionally low levels for the federal funds rate at least through mid - 2013. that is, in what the committee judges to be the most likely scenarios for resource utilization and inflation in the medium term, the target for the federal funds rate would be held at its current low level for at least two more years. in addition to refining our forward guidance, the federal reserve has a range of tools that could be used to provide additional monetary stimulus. we discussed the relative merits and costs of such tools at our august meeting. my fomc colleagues and i will continue to consider those and other pertinent issues,

##ed. while these principles are general, we have found that they have been more acute with new and innovative firms, whose regulatory maturity and risk management capabilities 4 / 6 bis - central bankers'speeches have not always grown in line with their balance sheets ; and where the regulatory toolkit is not everywhere as developed as in other sectors. while it is not something i will focus on today, this has been particularly clear in ireland's large and growing payment and electronic money institutions sector, where at times significant deficiencies have been identified. i say this not just to criticise, but to make them better ; and indeed they must get better in order to secure their customers funds, and the integrity of the system. getting it right will also be a good for business ; and so addressing these issues should be seen as a key enabler for growth, rather than an afterthought in their commercial strategy. conclusion – innovation in the interests of us all to sum up, innovation and regulation go hand in hand. and while regulators need to adapt in the face of rapid financial innovation, innovators need to recognise that no matter how novel, innovative and ground breaking the product or initiative, the fundamental risks and their fundamental duty to manage those risks remain. and while some might say that regulators are anti - innovation – i say this couldn't be further from the truth. the job of regulators is not to be indiscriminately pro - innovation, but our mandate is to deliver in the public interest. and let me be clear that innovation done well is in the best interest of consumers and the wider economy. but not all innovation is good, and not all innovation is done well. so to protect trust in innovation and the system, risks must be managed – so that the bad doesn't drive out the good. this is in the interest of us all. 1 with thanks to cian o'laoide, steven cull, and mary - elizabeth mcmunn for their help preparing these remarks. 2 see " the travels of marco polo ", volume one chapter xxiv 3 see for example the beauty of uncertainty : the rise of insurance contracts and markets in medieval europe – botticini et al, journal of the european economic association december 2023 4 see central bank of ireland – our strategy september 2021 5 see for example perrazzelli : the visionary project of a single supervisory mechanism - where do we stand after 10 years? october 2023 6 see consultation paper 156 :