in wage growth. on inflation, it is too soon to say whether the recent readings represent more than just a bump. we do not expect that it will be appropriate to lower our policy rate until we have greater confidence that inflation is moving sustainably down toward 2 percent. given the strength of the economy and progress on inflation so far, we have time to let the incoming data guide our decisions on policy. 1 / 3 bis - central bankers'speeches we have held our policy rate at its current level since last july. as shown in the individual projections the fomc released two weeks ago, my colleagues and i continue to believe that the policy rate is likely at its peak for this tightening cycle. if the economy evolves broadly as we expect, most fomc participants see it as likely to be appropriate to begin lowering the policy rate at some point this year. of course, the outlook is still quite uncertain, and we face risks on both sides. reducing rates too soon or too much could result in a reversal of the progress we have seen on inflation and ultimately require even tighter policy to get inflation back to 2 percent. but easing policy too late or too little could unduly weaken economic activity and employment. as progress on inflation continues and labor market tightness eases, these risks continue to move into better balance. as conditions evolve, monetary policy is well positioned to confront either of these risks. we are making decisions meeting by meeting, and we will do everything we can to achieve our maximum - employment and price - stability goals. that brings me to my second topic. the fed has been assigned two goals for monetary policy - maximum employment and stable prices. our success in delivering on these goals matters a great deal to all americans. to support our pursuit of those goals, congress granted the fed a substantial degree of independence in our conduct of monetary policy. fed policymakers serve long terms that are not synchronized with election cycles. our decisions are not subject to reversal by other parts of the government, other than through legislation. this independence both enables and requires us to make our monetary policy decisions without consideration of short - term political matters. such independence for a federal agency is and should be rare. in the case of the fed, independence is essential to our ability to serve the public. the record shows that independent central banks deliver better economic outcomes. 1 we recognize that we need to continually earn this grant of independence, and we do so by carrying out our work with technical competence and objectivity,

decades of bank deregulation. at the time, i suggested to students that the regulation of banking organizations was in an unstable equilibrium. while i initially meant the adjective mostly to refer to doctrine, it became progressively more applicable to the financial system itself. the implementation of the regulatory aims established after the crisis, along with the inevitable refinements of what has already been done, will continue to play out for some time. the upshot, i think, is both an unusually important time to be researching and writing in this area and an unusually challenging time to be teaching it. this conference has been an excellent occasion for 7 / 8 bis central bankers'speeches helping to shape both a research agenda and a new pedagogy. 1 howell e. jackson and edward j. symons, jr. ( 1999 ), regulation of financial institutions ( st. paul, mn : west group ). 2 see daniel k. tarullo ( 2008 ), banking on basel : the future of international financial regulation ( washington, dc : peter g. peterson institute for international economics ), pp. 178 – 82. 3 see daniel k. tarullo ( 2016 ), “ next steps in the evolution of stress testing, ” speech delivered at the yale university school of management leaders forum, new haven, ct, september 26. 4 see, e. g., daniel k. tarullo ( 2014 ), “ rethinking the aims of prudential regulation, ” speech delivered at the federal reserve bank of chicago bank structure conference, chicago, il, may 8. 5 tobias adrian and markus k. brunnermeier ( 2016 ), “ covar, " american economic review, vol. 106 ( july ), pp. 1705 – 41 ; fernando duarte and thomas m. eisenback ( 2013 ; revised 2015 ), “ fire - sale spillovers and systemic risk, " federal reserve bank of new york staff report, no. 645 ; and christian t. brownlees and robert f. engle ( 2016 ), “ srisk : a conditional capital shortfall measure of systemic risk, ” available at ssrn. com / abstract = 1611229 or dx. doi. org / 10. 2139 / ssrn. 1611229. 6 daniel k. tarullo ( 2012 ), “ financial stability regulation, ” speech given at the university of pennsylvania school of law distinguished jurist lecture, philadelphia, pa, october 10. 7