closely monitoring inflation expectations and the inflation situation more generally. to address these developments, the federal reserve has moved in two main areas. to help relieve the pressures in the interbank markets, the federal reserve – among other actions – recently introduced a term auction facility ( taf ), through which prespecified amounts of discount window credit can be auctioned to eligible borrowers, and we have been working closely and cooperatively with other central banks to address market strains that could hamper the achievement of our broader economic objectives. in the area of monetary policy, the federal open market committee ( fomc ) has moved aggressively, cutting its target for the federal funds rate by a total of 225 basis points since september, including 125 basis points during january alone. as the fomc noted in its most recent post - meeting statement, the intent of these actions is to help promote moderate growth over time and to mitigate the risks to economic activity. a critical task for the federal reserve over the course of this year will be to assess whether the stance of monetary policy is properly calibrated to foster our mandated objectives of maximum employment and price stability and, in particular, whether the policy actions taken thus far are having their intended effects. monetary policy works with a lag. therefore, our policy stance must be determined in light of the medium - term forecast for real activity and inflation, as well as the risks to that forecast. at present, my baseline outlook involves a period of sluggish growth, followed by a somewhat stronger pace of growth starting later this year as the effects of monetary and fiscal stimulus begin to be felt. at the same time, overall consumer price inflation should moderate from its recent rates, and the public's longer - term inflation expectations should remain reasonably well anchored. although the baseline outlook envisions an improving picture, it is important to recognize that downside risks to growth remain, including the possibilities that the housing market or the labor market may deteriorate to an extent beyond that currently anticipated, or that credit conditions may tighten substantially further. the fomc will be carefully evaluating incoming information bearing on the economic outlook and will act in a timely manner as needed to support growth and to provide adequate insurance against downside risks.

##equacy assessments or by our supervisory view of those institutions'risks and how well those risks are managed. as has long been the case with our capital rules, we expect that adjustments to the capital framework will be made over time to address industry and market developments, any potential shortcomings in the rule identified in our review and analysis during implementation, and new and improved techniques of risk management. next steps for bankers completion of the basel ii rulemaking process means that banks adopting the new rule must also gear up their efforts. of course we recognize the substantial work that bankers have undertaken over the past several years to prepare themselves for basel ii. but, understandably, they have had to wait for completion of the final rule to see how the agencies would articulate certain requirements – some of them quite detailed. therefore, it would seem that bankers need to read the rule very carefully and take time to understand how their own bank will be able to meet its requirements. as stated in the final rule, and as the u. s. agencies articulated several years ago, the key instrument in the qualification process is a bank's implementation plan. this written implementation plan, approved by a bank's board of directors, must describe in detail how the bank complies, or intends to comply, with the rule's qualification requirements. specifically, the plan must describe how the bank intends to address the gaps it has identified between its existing practices and the qualification requirements set forth in the rule for the advanced approaches, covering all consolidated subsidiaries. the implementation plan also must include objective, measurable milestones – including delivery dates – and a target date when the bank expects its advanced approaches to be fully operational. the bank must establish and maintain a comprehensive and sound planning and governance process to oversee implementation efforts, and must demonstrate to its supervisor that it meets the qualification requirements. banks subject to the final rule on a mandatory basis, the core banks, have up to six months to adopt an implementation plan. of course, banks may always submit their plans earlier, and i understand that a number of core banks are working toward that goal. this deadline for submission of plans by core banks is intended to prevent delays in starting implementation efforts. however, the final rule provides flexibility and gives banks adopting basel ii ample time to fully meet the qualification requirements once they have adopted an implementation plan. specifically, a bank's plan may include developmental goals for full implementation for up to thirty - six months from the effective date of the final rule