valuations, and additional fiscal stimulus could add momentum to demand, stalling any further progress or even causing inflation to reaccelerate. finally, there is a risk that increased immigration and continued labor market tightness could lead to persistently high core services inflation. given the current low inventory of affordable housing, the inflow of new immigrants to some geographic areas could result in upward pressure on rents, as additional housing supply may take time to materialize. with labor markets remaining tight, wage growth has been elevated at around or above 4 percent, still higher than the pace consistent with our 2 percent inflation goal given trend productivity growth. in light of these risks, and the general uncertainty regarding the economic outlook, i will continue to watch the data closely as i assess the appropriate path of monetary policy. the frequency and extent of data revisions over the past few years make the task of assessing the current state of the economy and predicting how the economy will evolve even more challenging. i will remain cautious in my approach to considering future changes in the stance of policy. it is important to note that monetary policy is not on a preset course. in my view, we should consider a range of possible scenarios that could unfold when considering how 2 / 7 bis - central bankers'speeches the fomc's monetary policy decisions may evolve. my colleagues and i will make our decisions at each fomc meeting based on the incoming data and the implications for and risks to the outlook. while the current stance of monetary policy appears to be at a restrictive level, i remain willing to raise the target range for the federal funds rate at a future meeting should the incoming data indicate that progress on inflation has stalled or reversed. restoring price stability is essential for achieving maximum employment over the longer run. regulatory approvals in the banking system before turning directly to regulatory approvals in the banking system and merger and acquisition policy, it is important to consider these issues in the broader context. regulatory approvals and bank mergers and acquisitions do not occur in a vacuum. the choices that regulators make on regulatory and supervisory policy issues have profound implications for mergers and acquisitions and for the appetite of bank management to engage in those transactions. in recent months, the banking agencies have issued or finalized a large number of regulatory changes. these changes are shaping the future of the banking system. from bank capital requirements to liquidity reform, significant revisions to the community reinvestment act, a regulatory attack on banks charging fees for services ( including debit card interchange

for business. of course, this uncertainty remains after the initial capital has been raised, shareholders identified, and a management team is ready to begin work. these delays present unique challenges for de novo founders, including incurrence of more start - up expenses, difficulty recruiting and retaining qualified management to obtain approval, and challenges in raising additional start - up capital investment. in my view, the absence of de novo bank formation over the long run will create a void in the banking system, a void that could contribute to a decline in the availability of reliable and fairly priced credit, the absence of financial services in underserved markets, and the continued shift of banking activities outside the banking system. bank mergers and acquisitions another pressing area of concern is the rapidly shifting approach to bank mergers and acquisitions ( m & a ) by some prudential regulators. 4 m & a transactions allow banks to evolve and thrive in our dynamic banking system and can promote the long - term health and viability of banks. m & a also ensures that banks have a meaningful path to transitioning bank ownership. the absence of a viable m & a framework increases the potential for additional risks, including limited opportunities for succession planning, especially in smaller or rural communities, and zombie banks that continue to exist but have no competitive viability or exit strategy. the impact of a more restrictive m & a framework affects institutions of all sizes, including larger institutions that are vying to compete with the very largest global systemically important banks. they may choose to pursue m & a to remain competitive with larger peers who can achieve growth organically through sheer scale. m & a is an important part of a healthy banking system. so when considering changes to the framework, i think we need to first identify the problem that needs to be solved and then ask whether any proposed solution is fair, transparent, and consistent with applicable statutes - and, critically, whether the proposed solution has the potential to damage the long - term viability of the banking system. are there identified shortcomings in the current process or standards, and are the proposed reforms targeted and effective to address these shortcomings? one argument i have heard about the m & a regulatory approval process is that the lack of application denials demonstrates that regulators are failing to meaningfully review and pressure - 4 / 7 bis - central bankers'speeches test proposals and have effectively become a rubber stamp. i think this argument lacks a strong foundation. there is ample evidence that undermines this argument, including the resource