recent memorandum of understanding. these institutions have made substantial changes over the past several months to bring down overall leverage and risk - weighted assets and to reduce liquidity risk. in addition, we have undertaken a broad based program of initiatives to build a more robust over - the - counter derivatives infrastructure through, among other measures, a central clearing house for credit default swaps ; to strengthen the financial cushions held by central counterparties against the risk of default by a participant ; and to reduce vulnerabilities in secured funding markets. these initiatives will take time, but we expect to see substantial progress over the next two quarters. i look forward to your questions today and working with you as we move ahead in building a more effective financial regulatory framework for the united states. thank you.

, exclude food and energy prices. you may have concerns that the rise in commodity prices will turn out to be persistent and, if so, how this might impact the inflation outlook. bis central bankers ’ speeches from a policymaking standpoint, there are important factors that suggest that it would be unwise for the federal reserve to over - react to recent commodity price pressures by raising interest rates soon. why? first, despite the general uptrend, some of the recent commodity price pressures are likely to be temporary – due to poor weather or geopolitical uncertainties. this is certainly what is anticipated by market participants. second, even if commodity price pressures were to prove persistent, they have a smaller impact in the united states than they do in many other countries. relative to most other major economies, the u. s. inflation rate is lower, the amount of slack much greater and commodities represent a relatively small share of our consumption basket. this small share helps to explain why the “ pass - through ” of commodity prices into core measures of inflation has been very low in the united states for several decades. third, the federal reserve ’ s success in anchoring inflation expectations has also been important in limiting pass - through. since 1984, for example, when the federal reserve began to achieve success in driving down and then subsequently anchoring long - term inflation expectations, there has been very little evidence of commodity price pass - through into core inflation. in contrast, prior to 1984, when inflation expectations were much less wellanchored, pass - through did occur and, at times, played an important role in pushing underlying inflation higher. thus, while rising commodity prices may be giving some of you a bad headache, they are not likely to lead to a sustained rise in inflation to levels inconsistent with our dual mandate. we will have to ensure, however, that these pressures do not cause inflation expectations to become unanchored. if that were to occur, that would be a troublesome development that would complicate the pursuit of our dual mandate of high employment and low and stable inflation because we have an federal open market committee meeting next tuesday, i will not comment today on the implications of the economic outlook for monetary policy. outlook for the region and queens now, let me turn briefly to the situation here in the city and in queens, in particular. while the national economic outlook improved considerably during the latter part of 2010 and into early this year, growth in new york city ’ s economy appears to have