Synechron, a global leader in digital transformation consulting for the financial and technology sectors, is proud to announce that it has executed a definitive agreement for the acquisition of Chamonix IT Management Consulting Pty Ltd and Exposé Data Pty Ltd. Both companies are headquartered in Adelaide, Australia, with additional operations in Melbourne and Brisbane and share a common goal of delivering digital transformation, artificial intelligence, and analytics expertise to clients across several key industries including government, healthcare, utilities, energy, and education. The definitive agreement with respect to the acquisition was signed on Tuesday, 25 June, 2024, and is subject to customary closing conditions, including approval by the Australian Foreign Investment Review Board (FIRB). Chamonix IT, established in 2010, is the leading provider of digital transformation services to organizations in South Australia. With a skilled team of approximately 150 professionals, Chamonix IT has been pivotal in delivering cutting-edge solutions that address complex challenges and drive significant outcomes for enterprise-level and public sector clients. Chamonix IT’s founders established Exposé as a new company in 2016 to bring the same level of expertise, this time focused specifically on data science and engineering, data modelling and visualization, and artificial intelligence. Among the fastest-growing IT organizations in Australia, Exposé currently has a team of approximately 50 people across the country. The two organizations will join Synechron’s core digital transformation consulting business alongside recently acquired iGreenData, which expanded Synechron’s data and blockchain expertise in the financial services sector. With these additions, Synechron has effectively doubled its presence in the country, achieving coverage across major sectors. This strategic positioning allows the company to capitalize on the growing information technology (IT) investment in Australia encompassing SaaS, IT services, and analytics, while simultaneously enhancing its ability to offer support and solutions across Asia, the Americas, and Europe. Faisal Husain, Synechron Co-founder and CEO, commented, “We look forward to welcoming Chamonix IT and Exposé into the Synechron family when the acquisition is completed. They will enrich our presence in Australia, bringing fresh expertise and capabilities that complement our ongoing commitment in the region. This move will enhance our service offerings and drive significant value, strengthening our strategy of continuous innovation and client-focused solutions.” Scott Grigg, CEO of Chamonix IT, said, “Joining forces with Synechron is a significant milestone for us. Our shared dedication to excellence and innovation means we’re exceptionally positioned to offer transformative digital solutions that are second to none.” Kelly Drewett, CEO of Exposé, added, “Becoming part of the Synechron family represents a massive opportunity. It accelerates our ability to innovate and empowers our employees to take on even more complex challenges on behalf of our clients.” Technology Holdings acted as the financial advisor to Chamonix IT and Expose on the transaction.

Leading regulatory technology firm, Kaizen and Lucht Probst Associates (LPA), the German capital market technology and advisory firm, have partnered to offer a range of compliance solutions to international clients. The new partnership will allow Kaizen and LPA to work with clients offering them independent transaction reporting assessments and regulatory reconciliations solutions. Kaizen’s ReportShield™ Accuracy Testing is an automated, managed solution that tests the quality of trade and transaction data reported to the regulator. What makes it unique is the comprehensive deep testing of all records, which provides financial firms with full visibility of their reporting quality. In addition to Accuracy Testing, Kaizen offers an Advanced Regulatory Reconciliation solution that provides an independent assessment of the completeness of a firm’s regulatory reporting to identify under and over-reporting. LPA offers a broad range of consulting services for banks, asset managers, and exchanges, with a strong focus on capital markets. Our expertise extends to the implementation of regulatory requirements in transaction reporting. Beyond the initial setup of transaction reporting regimes, we place a significant emphasis on data analysis, optimizing data quality, and enhancing the efficiency of reporting processes. Jean-Marie Mamodesen, Managing Director – Head of European Sales at Kaizen, commented: “LPA has a strong reputation in Germany and we are delighted to be working with them. By bringing the skillset and expertise of the two companies together we are able to provide solutions that ensure that the data which firms are reporting to the regulators is of the highest quality.” Hans Joachim Lefeld, Senior Partner – Head of Transaction Reporting from LPA said: “We are delighted to be working with Kaizen, who offer an array of market leading compliance solutions. By joining forces with Kaizen we extend our eco system and will be able to better serve our clients and help them navigate the complexity of the global regulatory reporting landscape.”

Worldline [Euronext: WLN], a global leader in payment services, has announced a strategic partnership with Preferred Hotels & Resorts, a globally renowned brand dedicated to supporting independent luxury hotels, resorts, and residences for over 50 years. This collaboration marks a significant step forward in streamlining payment processes and elevating the guest experience within the luxury hospitality segment, benefiting more than 600 member properties across 80 countries. Through this alliance, Worldline aims to offer a broad range of solutions, including eCommerce and Acquiring services, with a strong focus on Europe, to meet and exceed the expectations of hospitality customers. The integration of Worldline's best-in-class payment technology is poised to enhance the guest journey across Preferred Hotels & Resorts' expansive network of independent luxury hotels, resorts, and residences. Michael Osgood, Vice President of Alliance Partnership Marketing for Preferred Hotels & Resorts, emphasised the high potential of this collaboration. “Through our strategic alliance with Worldline, Preferred Hotels & Resorts’ member properties are well-positioned to take the guest experience even further,” said Osgood. “Worldline provides fast and reliable transaction processing, empowering hoteliers to boost guest satisfaction and revenue while benefiting from the efficiencies of managing a single payment platform.” Linda Groot, Global Head of Hospitality at Worldline, expressed the company's commitment to the European payment partner role for the hospitality industry, offering a full-service package completely integrated into the hotel infrastructure. "Our partnership with Preferred Hotels & Resorts signifies an important milestone for us, as it demonstrates Worldline’s dedication to delivering seamless and efficient payment solutions, enabling hotels to meet their omnichannel goals and enhance the guest experience." The partnership between Worldline and Preferred Hotels & Resorts sets the stage for a seamless integration of payment solutions and an enhanced guest journey within the luxury hospitality sector, demonstrating a commitment to delivering exceptional services and driving enhanced guest satisfaction.

Key Points – June Report China’s June interbank market liquidity tightened to the highest level in 8 months as banks withdrew funds ahead of the quarterly macroprudential assessment (MPA), the latest MNI Liquidity Conditions Index showed. The MNI China Liquidity Condition Index reached 62.8 in June, up from May’s 23.8, with 39.5% of traders reporting tighter conditions.  The MNI China Economy Condition Index stood at 51.2 in June, down from 65.5 previous.  The MNI China PBOC Policy Bias Index was 24.4, up from 21.4 last month.   The MNI survey collected the opinions of 43 traders with financial institutions operating in China's interbank market, the country's main platform for trading fixed income and currency instruments, and the main funding source for financial institutions. Interviews were conducted from Jun 10 – Jun 21.

Nasdaq, Inc. (Nasdaq: NDAQ) today announced the termination of its transaction agreement with the European Energy Exchange (EEX), previously announced on June 20, 2023, under which EEX had agreed to acquire Nasdaq’s Nordic power trading and clearing business. Nasdaq continues to operate its Nordic power trading and clearing business and remains focused on providing its clients with exceptional service.

Singapore today published our National Asset Recovery Strategy, setting out our comprehensive approach towards the recovery of illicit funds and assets from criminals, and the forfeiture of these assets or their return to victims. Announced by Prime Minister and Minister for Finance Lawrence Wong at the opening of the Financial Action Task Force Plenary Meeting this morning, the National Asset Recovery Strategy is part of Singapore’s continued efforts to enhance its Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) regime.  2. Globally, money laundering activities are increasingly sophisticated, involving swift movements of large sums of illicit funds across jurisdictions, and affecting a significant number of victims. Specific to Singapore, a sizeable proportion of the money laundering cases here are transnational in nature, involving foreign predicate offences and foreign crime syndicates which employ sophisticated and complex methods, including layering tactics and digital technologies, to conceal the cross-border movement of their illicit funds.  3. Asset recovery is one of the key pillars of Singapore’s AML regime.  It seeks to deter the flow of illicit assets through Singapore’s financial ecosystem, while remaining welcoming to legitimate businesses. Between January 2019 and June 2024, Singapore seized S$6 billion linked to criminal and money laundering activities – of which S$416 million have been returned to victims, and S$1 billion have been forfeited to the State. The large bulk of the remainder is linked to still ongoing investigations or court proceedings. 4. Successful asset recovery requires a multi-faceted approach. To this end, Singapore’s National Asset Recovery Strategy focuses on four pillars, namely to: a. Detect suspicious and criminal activities by tracing the illicit funds;  b. Deprive criminals of their ill-gotten proceeds through prompt seizure and confiscation;  c. Deliver maximum recovery of assets for forfeiture and restitution to victims; and d. Deter criminals from using Singapore to hide, move, or enjoy their illicit assets. 5. Singapore implements these four pillars through upstream loss prevention efforts, and a whole-of-society approach. We have strengthened partnerships with our international counterparts, and community and private sector stakeholders, in asset recovery and loss prevention efforts. For instance, the Singapore Police Force’s Anti-Scam Command and the local banks sent more than 16,700 SMS alerts from March to April 2024 to warn more than 12,500 bank customers, whom the authorities had detected were in the process of being scammed. This resulted in the disruption of more than 3,000 scams and averted losses of over S$100 million.  6. Singapore recognises that criminal activities and methods are constantly evolving. We are committed to continually enhancing our AML/CFT regime to prevent criminals from exploiting Singapore’s ecosystem. Where we detect any abuse by criminals, we will track them down, and take them to task, including depriving them of their ill-gotten assets. The National Asset Recovery Strategy is available for download here.  *** Resources Infographic - National Asset Recovery Strategy   (1.02 MB)

Nasdaq (Nasdaq: NDAQ) has scheduled its Second Quarter 2024 financial results announcement. Who: Nasdaq’s CEO, CFO, and additional members of its senior management team     What: Review Nasdaq’s Second Quarter 2024 financial results     When: Thursday, July 25, 2024Results Call: 8:00 AM Eastern     Senior management will be available for questions from the investment community following prepared remarks. All participants can access the conference via webcast through the Nasdaq Investor Relations website at http://ir.nasdaq.com/. Note: The press release for the Second Quarter 2024 results will be posted on the Nasdaq Investor Relations website at http://ir.nasdaq.com/ on Thursday, July 25, 2024 at approximately 7:00 AM Eastern. About Nasdaq

Good afternoon and welcome to the 2nd annual Midwest Cyber Workshop hosted by the Federal Reserve Banks of Chicago, Kansas City, and St. Louis.1 This workshop was launched last year to further the conversation on cyber risks between community bankers, regulators, law enforcement, and industry stakeholders. It is an honor to be a part of this workshop again and to kickoff this year's event. Click here for full details.

The Office of the Comptroller of the Currency (OCC) reported cumulative trading revenue of U.S. commercial banks and savings associations of $15.6 billion in the first quarter of 2024. The first quarter trading revenue was $4.0 billion, or 34.2 percent, more than in the previous quarter and $2.0 billion, or 11.1 percent, less than a year earlier. In the report, Quarterly Report on Bank Trading and Derivatives Activities, the OCC also reported that as of the first quarter of 2024: a total of 1,208 insured U.S. national and state commercial banks and savings associations held derivatives. four large banks held 87.6 percent of the total banking industry notional amount of derivatives. credit exposure from derivatives increased in the first quarter of 2024 compared with the fourth quarter of 2023. Net current credit exposure increased $11.0 billion, or 4.6 percent, to $251.0 billion. derivative notional amounts increased in the first quarter of 2024 by $13.6 trillion, or 7.1 percent, to $206.1 trillion. derivative contracts remained concentrated in interest rate products, which totaled $144.4 trillion or 70.1 percent of total derivative notional amounts.   Related Link Quarterly Report on Bank Trading and Derivatives Activities: First Quarter 2024 (PDF)

The composition of the European parliament may be different following recent elections, but the list of challenges facing EU policymakers – European competitiveness, economic resilience, energy security and sustainability – remains the same. Tackling those challenges can’t be achieved without having strong, liquid capital markets that support financing, investment and risk management – which means a well-functioning derivatives market is an important part of the puzzle. Derivatives play a critical role in the efficient performance of markets and mobilization of capital by enabling corporates, pension funds, insurance companies, asset managers, banks, government agencies and others to manage risk, reduce funding costs, enhance investment returns and achieve price discovery. This encourages liquidity and competition and helps to alleviate uncertainty, giving firms the confidence to lend, borrow and invest – which, in turn, contributes to economic growth. As such, we recently published a paper that sets out a series of policy measures the European Commission (EC) could take to further strengthen the EU derivatives market and support the bloc’s strategic priorities. For example, there are several derivatives-related initiatives the EC could adopt to improve the vibrancy of EU financial markets, which would help support the competitiveness of the economy. These include encouraging innovations in risk management by ensuring the treatment of financial markets and derivatives activity is proportionate to the underlying risks, improving the attractiveness of EU derivatives market infrastructure and removing barriers to entry, calibrating transparency and reporting rules to establish the EU as a global trading hub, and aligning regulatory requirements to ensure the EU is competitive on an international basis. Specifically, the EC should allow EU entities to access global liquidity pools without barriers that could hamper effective risk management. That could be achieved by granting non-time-limited equivalence for UK central counterparties (CCPs) well in advance of the June 30, 2025 expiry of the current equivalence decision, and by allowing subsidiaries of EU firms to access non-EU CCPs that have not obtained recognition under the European Market Infrastructure Regulation (EMIR) without being subject to punitive capital requirements. Regulators should also review the EU’s transparency framework to ensure useful information is published and to reduce barriers to entry for global market participants – for instance, by adopting international standards like unique product identifiers and by facilitating machine-readable and executable reporting. In the latter case, ISDA has adopted its Digital Regulatory Reporting initiative for the revised reporting rules under EMIR, enabling firms to digitally report data accurately, cost-effectively and efficiently. When it comes to reinforcing the resilience of the EU, ISDA recommends several key policy measures to strengthen European financial markets to ensure they continue to serve the real economy, even during stressed conditions. This includes automating collateral management processes to improve efficiency and cut operational and liquidity risks. To help enable this, ISDA has developed several use cases for standardizing and automating collateral processes using the Common Domain Model, a free-to-use data standard for financial products, trades and lifecycle events. ISDA also recommends reducing barriers to accepting money market funds as eligible collateral for cleared and non-cleared derivatives – something that would provide investors with more options when faced with elevated margin calls during periods of volatility. The transition to a climate-neutral and sustainable economy remains a matter of urgency in the EU and elsewhere. This shift is estimated to require approximately €400 billion per year in additional green investment in the EU alone. Deep, liquid financial markets will be critical to channel the necessary capital to green technologies and infrastructure, and derivatives will play an important role in enabling firms to optimize funding costs and manage risks. In the paper, ISDA sets out several recommendations aimed at improving transparency and disclosure requirements and developing a robust, credible system for carbon credits that is as internationally connected as possible – for example, by linking the EU and UK emissions trading systems. Ultimately, derivatives help drive vibrant, competitive markets and enable firms to manage risk and invest. We think our recommendations will create a safer, more efficient EU derivatives market, which will help support the key EU objectives of boosting competitiveness and economic security, while helping to achieve a successful green transition.

The Commodity Futures Trading Commission today announced it has issued ForecastEx, LLC an Order of Registration as a derivatives clearing organization (DCO) and an Order of Designation as a designated contract market (DCM) under the Commodity Exchange Act (CEA). DCO registration was granted under Section 5b of the CEA. DCM designation was granted under Section 5a of the CEA. ForecastEx is a limited liability company registered in Delaware and headquartered in Chicago, Illinois. The CFTC determined ForecastEx demonstrated its ability to comply with the CEA provisions and CFTC regulations applicable to DCOs and DCMs. The terms and conditions of the DCO and DCM orders require, among other things, that ForecastEx will comply with all provisions of the CEA and the CFTC’s regulations applicable to DCOs and DCMs, respectively. With the addition of ForecastEx, there will be 17 DCOs and 18 DCMs. RELATED LINKS ForecastEx, LLC DCO Order of Registration ForecastEx, LLC DCM Order of Designation

The Securities and Exchange Commission today filed charges against Meta Materials Inc. and its former CEOs, John Brda and George Palikaras. The company has agreed to settle the SEC’s charges in an administrative proceeding, while the SEC’s litigation against Brda and Palikaras will proceed in federal district court. The SEC’s complaint against Brda and Palikaras alleges that, as a result of a concerted market manipulation scheme, Meta Materials, a Nevada corporation headquartered in Dartmouth, Nova Scotia, Canada, raised $137.5 million from investors in an at-the-market (ATM) offering in June 2021 immediately prior to the merger of Brda’s Torchlight Energy Resources Inc. and Palikaras’ Metamaterial Inc. that formed Meta Materials. The SEC’s complaint, filed in U.S. District Court for the Southern District of New York, alleges that Brda and Palikaras planned and conducted the manipulative scheme that included, among other things, issuing a preferred stock dividend immediately before the merger. The complaint alleges that Brda and Palikaras told certain investors and consultants—and hinted via social media—that the dividend would force short sellers to exit their positions and trigger a “short squeeze” that would artificially raise the price of the company’s common stock. The SEC further alleges that Brda and Palikaras also misrepresented the company’s efforts to sell its oil and gas assets and distribute proceeds to preferred stockholders, giving investors a false impression of the value of the dividend. While investors held or bought the company’s common stock to receive the dividend, the complaint alleges, the company was cashing in by selling $137.5 million in an ATM offering at prices that the company, Brda, and Palikaras knew were temporarily inflated by their manipulative scheme. “We have two days,” the complaint alleges Brda told Palikaras after the first day of the ATM offering, “to take advantage of the squeeze...” “The conduct we allege was a sophisticated, yet brazen plan by a public company and its former CEOs to purposely mislead investors in the company’s stock,” said Eric Werner, Director of the SEC’s Fort Worth Regional Office. “This conduct is particularly alarming because it involves public company CEOs who were more concerned with ‘burning the shorts’ than creating long-term value for shareholders.” The SEC’s complaint charges Brda and Palikaras with violating the antifraud and proxy disclosure provisions of the federal securities laws, and charges Brda with aiding and abetting Meta Materials’s violations of the reporting, internal accounting controls, and books and records provisions. The complaint seeks permanent injunctions, officer-and-director bars, and civil penalties from both defendants. The complaint also seeks disgorgement with pre-judgment interest from Brda. The SEC also instituted a separate administrative proceeding against Meta Materials, entering a settled order finding that Meta Materials violated the antifraud, reporting, internal accounting controls, and books and records provisions of the federal securities laws. Without admitting or denying the findings, Meta Materials was ordered to cease and desist from violations of the relevant provisions of the federal securities laws and to pay a $1,000,000 penalty. The SEC’s investigation was conducted by Christopher Rogers and Ty Martinez of the SEC’s Fort Worth Regional Office under the supervision of Samantha Martin, B. David Fraser, and Mr. Werner. The SEC’s litigation against Brda and Palikaras will be conducted by Patrick Disbennett and supervised by Keefe Bernstein. A separate Commission investigation regarding subsequent events related to Meta Materials (MMTLP) remains ongoing. If you are an individual with information related to this investigation or any other related suspected fraud and you wish to contact the SEC staff, please submit a tip at SEC.gov. Related Materials SEC Complaint SEC Order

Thank you, Barbara. It is a fitting time to be speaking again to the Economic Club of New York, because this month marks two years since my first Federal Open Market Committee (FOMC) meeting.1 At that meeting, we kicked off a series of large interest-rate increases, all of which I supported, because I am fully committed to bringing inflation sustainably back to our 2 percent target. As I said when I joined the Board, I care about both sides of the dual mandate Congress gives us, maximum employment and price stability. When inflation was well above target and the unemployment rate was historically low, we prioritized restoring price stability. Over the past year, inflation has slowed, and labor market tightness has eased, such that the risks to achieving our inflation and employment goals have moved toward better balance. I think now is a good time to assess how the economy has evolved after rates have held steady at a restrictive level for nearly a year. Today, I will provide a progress report on disinflation, give you my outlook on the economy, and share my views on how to ensure that monetary policy brings inflation fully back to 2 percent over time while being attentive to the risk of a slowing labor market. I will conclude my remarks with a few words about my role as chair of the Board's Financial Stability Committee. InflationAs the U.S. and global economy recovered from the pandemic, rebounding demand came up against still-constrained supply, and inflation rose to the highest level in many years. In the past two years, 12-month inflation in the PCE price index has fallen from a peak above 7 percent to 2.7 percent in April, and it likely moved a bit lower in May based on consumer and producer price data. However, after rapid disinflation in the second half of last year, progress has slowed this year. My focus remains on making sure inflation is on a path to return sustainably to 2 percent. How do I think about making that determination? To respond, I think it is helpful to look at the underlying data. Some price components have clearly improved. Food and energy price increases moderated significantly over the past two years as global commodity supplies recovered from the shock of Russia's February 2022 invasion of Ukraine. When excluding often-volatile food and energy costs, 12-month inflation in core goods prices is down from 7.6 percent in early 2022, returning to the trend of slightly negative inflation observed before the pandemic. The increased availability of computer chips and other material inputs led to a recovery in motor vehicle production and, along with restraint in aggregate demand, likely reduced supply–demand imbalances for durable goods, more generally. Inflation in services, a spending category that accounts for about two-thirds of household budgets, has slowed significantly, though it remains noticeably above pre-pandemic rates. Specifically, housing services inflation has eased quite gradually, as it takes time for the moderation of increases in market rent—what a landlord charges a new tenant—to show through to broader measures of shelter costs. One possible explanation is that landlords raise rents for existing tenants only gradually over several years and are still moving those rents closer to the market rate. Outside of housing, 12-month services inflation slowed over the course of last year from above 5 percent to below 3.5 percent but has stalled near that rate this year. That is still about 1 percentage point above the average pace during the two years before the pandemic. Some of the largest contributors to recent services inflation are imputed prices, including portfolio management fees that are affected by equity price increases. Other components of services inflation that are more reflective of supply and demand conditions in the economy have continued to ease. Prices of hotel stays, airline tickets, and restaurant meals are illustrative. I expect that the longer-run disinflation trend will continue as interest rates weigh on demand. Anecdotal reports, including from the Fed's Beige Book, suggest consumers are pushing back on price increases. Several national retailers have announced plans to lower prices on certain items, and there is increasing evidence that higher-income shoppers are trading down to discount stores. Two other important factors supporting this trend are well-anchored long-term inflation expectations and short-term inflation expectations falling back to near pre-pandemic levels. My forecast is that three- and six-month inflation rates will continue to move lower on a bumpy path, as consumers' resistance to price increases is reflected in the inflation data. I expect 12-month inflation will roughly move sideways for the rest of this year, with monthly data likely similar to the favorable readings during the second half of last year. Beyond that, I see inflation slowing more sharply next year, with housing-services inflation declining to reflect the past slowing in rents on new leases, core goods inflation remaining slightly negative, and inflation in core services excluding housing easing over time. Labor MarketTurning to the other side of our dual mandate, the labor market has largely returned to a better alignment between supply and demand. Many indicators suggest the job market is roughly where it was before the pandemic—tight but not overheated. The unemployment rate was a still-low 4 percent in May, but it has gradually risen over the past year since touching a more than half-century low of 3.4 percent in April 2023. Last month's rate was also modestly above readings just before the pandemic took hold. Layoffs remain low, and payroll growth has been solid so far this year, adding an average of 248,000 jobs a month, essentially matching last year's pace. Labor supply has expanded, partly reflecting a rise in immigration. Labor force participation has broadly rebounded from pandemic lows, except for those aged 65 or older. Women between the ages of 25 and 54 led the rebound, with their participation reaching 78.1 percent in May, the highest ever recorded. With more workers entering the economy, the monthly job gains needed to keep the unemployment rate steady likely has risen from just under 100,000 to nearly 200,000. Although these estimates are uncertain, such a breakeven pace may be a bit higher than the true pace of recent job gains, when taking into account data from the Quarterly Census for Employment and Wages. These data suggest that payroll job gains were overstated last year and may continue to be so this year. Thus, even the robust payroll numbers are consistent with a tight, but not overheating, labor market. Signs of better balance in the labor market have come into focus. For example, the ratio of job vacancies to unemployment has fallen from a high of 2.0 in mid-2022 to 1.2 in April, in line with its pre-pandemic level. Workers are also less likely to leave their current jobs in search of new ones. The quits rate has fallen from 3.0 percent in April 2022 to 2.2 percent this April and is now below its 2019 average. This decline suggests a normalization following a period of high churn. Wage growth is outpacing inflation but is also moderating. Data from the Federal Reserve Bank of Atlanta show that the wage-growth differential between job changers and stayers has narrowed. Wage growth reflected in postings from online job boards, such as Indeed, has returned to pre-pandemic levels. These measures tend to adjust quickly to changes in labor market conditions. Economic ActivityTurning to the broader picture, the U.S. economy has rebounded robustly since the short but deep pandemic recession. Overall, gross domestic product (GDP) growth eased in the first quarter from the rate at the end of last year. However, much of the first-quarter weakness was in net exports and inventories, noisy components from which I do not take much signal, while growth in private domestic final purchases remained solid. Going forward, I expect economic growth to remain near the rate of potential growth, somewhat above 2 percent, which is boosted by the increase in the size of the labor force. American consumers have driven the current expansion, bolstered by strong income growth. But recent data, including first-quarter household spending and retail sales for April and May, suggest that growth is slowing. And, in April, the total amount of credit-card balances and other types of revolving consumer debt declined for the first time since 2021. Signs of strain continue to emerge among consumers with low-to-moderate incomes, as their liquid savings and access to credit have increasingly become exhausted. Credit-card delinquency is on an upward trend, and the rate at which auto loans are transitioning into delinquency is at a 13-year high. These rates are not yet concerning for the overall economy but bear watching. Offsetting some of the slowing in consumer spending, investment spending for equipment and intangibles, such as intellectual property and software, has been strong this year. After growing at about only a 1 percent pace last year, equipment and intangibles spending grew at a more than 4 percent annual rate in the first quarter. If that strength continues, it has the potential to increase productivity over time. Productivity growth is one factor that could change the path of both the expansion and inflation. Last year's GDP growth of 3.1 percent came alongside more moderate employment gains, implying strong growth in productivity. The economy may have benefited from investment undertaken in response to strong demand when the labor market was tight. Productivity growth is volatile and difficult to measure, but if it remains strong, then a faster pace of economic growth might not be inflationary. While the pace of gains may have cooled from last year, I still lean toward optimism on innovation and productivity. Looking ahead, I see adoption of artificial intelligence (AI) technology as a potentially significant source of productivity growth, keeping in mind that breakthroughs, such as effective generative AI, will take time to fully reach their potential and disseminate throughout the economy and for complementary investment to bear fruit. Monetary PolicyConsidering the full view of economic data available at the time, my colleagues on the FOMC and I decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent when we met earlier this month. I believe our current monetary policy stance is restrictive, putting downward pressure on aggregate demand in the economy. With disinflation continuing, albeit at a slower pace this year, and the labor market having largely normalized, I see the risks to achieving our employment and inflation goals as having moved toward better balance. Given our data dependence, we will closely monitor incoming information to determine the future path of policy. Returning inflation sustainably to our 2 percent target is an ongoing process and not a fait accompli. In considering how restrictive policy is, I look at a broad range of indicators from financial and credit markets. For instance, the two-year real rate, derived from Treasury Inflation-Protected Securities, or TIPS, remains around 2.7 percent, up from an average of about 1/2 percent in the couple of years before the pandemic, while the 30-year mortgage rate is around 7 percent. Meanwhile, banks have significantly tightened credit standards over the past two years. In particular, small businesses and some small banks and community development financial institutions are experiencing diminished access to credit. Many of these businesses also face short-duration loans that need to be refinanced at higher interest rates. With rising delinquencies, a number of low-to-moderate-income households are also likely experiencing diminished access to credit. On the other hand, the largest firms and the largest banks do not report a lack of access to funding. Larger firms, like many homeowners, were able to lock in low interest rates for longer terms a few years ago, before rates rose. Of course, the economic outlook is always uncertain. One way to address such uncertainty is to consider a range of scenarios and not just the baseline forecast. One scenario is the possibility that persistently high inflation durably increases inflation expectations. While this appears less likely than a year or two ago, I am very attentive to the evolution of inflation expectations. Such a risk would imply keeping monetary policy restrictive for longer. Another scenario would be that the economy and labor market weaken more sharply than expected in my baseline forecast. In that case, monetary policy would need to respond to such a threat to the employment side of the dual mandate. Considering the balance of risks related to these scenarios, I believe that our current policy is well positioned to respond as needed to any changes in the economic outlook. With significant progress on inflation and the labor market cooling gradually, at some point it will be appropriate to reduce the level of policy restriction to maintain a healthy balance in the economy. The timing of any such adjustment will depend on how economic data evolve and what they imply for the economic outlook and balance of risks. Financial StabilityBefore I conclude, I would like to say a few words about the financial system's resilience. Following the 2007–09 financial crisis, a broad set of reforms was put in place to bolster financial stability. To ensure an ongoing focus on that area, the Board established its Committee on Financial Stability as a venue to discuss related developments and policy issues. Earlier this year, I became the chair of this committee. Consistent with some easing of financial conditions since late last year, valuations for some asset categories have risen. Home prices, for example, have outstripped rent gains for several years. That leaves measures such as the price-to-rent ratio high relative to historical averages. Yet, these valuations have not led to an appreciable increase in risk-taking. While house prices have been growing rapidly, mortgage debt has not, and most households have ample equity cushions. As I said earlier, some households are experiencing financial strain, and rising delinquency rates suggest some caution. Borrowing by businesses and households has been expanding at rates below GDP growth for several years. I use the ratios of their debt levels to GDP as a rough proxy of whether the sectors are overleveraged, and those stand well below pre-pandemic levels. Financial institutions and markets also appear broadly robust, with high capital and liquidity levels at the largest and most interconnected banks. While there is less visibility into nonbank financial institutions, this tightening cycle has seen markets absorb a number of risk events, suggesting that leverage does not appear too great. A subset of banks has a high concentration of commercial real estate (CRE) loans, and supervisors are working closely with those banks. As the CRE market adapts to the shifting preference for downtown office space, prices for some buildings will likely continue to fall, and more loans will need to be worked out as they come due. However, markets have broadly taken the bumps in stride so far, without notable spillovers. In sum, I see a system that has some vulnerabilities but also important sources of resilience and, on balance, is not currently positioned to unusually amplify any future shock. A stable and resilient financial system is critical to the well-being of households and firms, allowing them to access credit, and it is essential for the Federal Reserve to achieve its dual mandate of maximum employment and price stability. Thank you. It is a pleasure to be back at the Economic Club of New York. I look forward to continuing our conversation. 1. The views expressed here are my own and not necessarily those of my colleagues on the Federal Open Market Committee. 

I support the Commission’s approval of four comparability determinations and related orders finding that the capital and financial reporting requirements in Japan, Mexico, the European Union (France and Germany), and the United Kingdom (for swap dealers (SDs) designated for prudential supervision by the UK Prudential Regulation Authority (PRA)) are comparable to the Commission’s capital and financial reporting requirements applicable to nonbank SDs. These are the first comparability determinations that the Commission has finalized for applications filed following the July 2020 adoption of its regulatory framework for substituted compliance for non-U.S. domiciled nonbank SDs.[1] There are currently 15 non-U.S. nonbank SDs that are eligible to comply with these conditional orders: three in Japan; three in Mexico; two in Germany and one in France for the EU; and six in the UK that are PRA-designated. As part of the process leading to the Commission’s final comparability determinations and orders, Commission staff engaged in a thorough analysis of each foreign jurisdictions’ capital and financial reporting frameworks and considered the public comments received on the proposed determinations and orders. Based on those reviews, the Commission has determined that the respective foreign jurisdictions’ rules are comparable in purpose and effect, and achieve comparable outcomes, to the CFTC’s capital and financial reporting rules. Specifically, the Commission considered the scope and objectives of the foreign regulators’ capital adequacy and financial reporting requirements; the ability of those regulators to supervise and enforce compliance with their respective capital and financial reporting requirements; and other facts or circumstances the Commission deemed relevant for each of the applications. In certain instances, the Commission found that a foreign jurisdiction’s rules impose stricter standards. In limited circumstances, where the Commission concluded that a foreign jurisdiction lacks comparable and comprehensive requirements on a specific issue, the Commission included a targeted condition designed to impose an equally stringent standard. The Commission has issued the final orders consistent with its authority to issue a comparability determination with the conditions it deems appropriate. These conditions aim to ensure that the orders only apply to nonbank SDs that are eligible for substituted compliance in these respective jurisdictions and that those non-U.S. nonbank SDs comply with the foreign country’s capital and financial reporting requirements as well as certain additional capital, financial reporting, recordkeeping, and regulatory notice requirements. This approach acknowledges that jurisdictions may adopt unique approaches to achieving comparable outcomes. As a result, the Commission has focused on whether the applicable foreign jurisdiction’s capital and financial reporting requirements achieve comparable outcomes to the corresponding Commission requirements for nonbank SDs, not whether they are comparable in every aspect or contain identical elements. With these comparability determinations, the Commission fully retains its enforcement and examination authority as well as its ability to obtain financial and event specific reporting to maintain direct oversight of nonbank SDs located in these four jurisdictions. The avoidance of duplicative requirements without a commensurate benefit to the Commission’s oversight function reflects the Commission’s approach to recognizing the global nature of the swap markets with dually-registered SDs that operate in multiple jurisdictions, which mandate prudent capital and financial reporting requirements. This is, however, an added benefit and not the Commission’s sole justification for issuing these comparability determinations. The comparability orders will become effective upon their publication in the Federal Register. For several order conditions, the Commission is granting an additional compliance period of 180 calendar days. To rely on a comparability order, an eligible non-U.S. nonbank SD must notify the Commission of its intention to satisfy the Commission’s capital and financial requirements by substituted compliance and receive a Commission confirmation before relying on a determination. I appreciate the hard work and dedication of the staff in the Market Participants Division over the past several years to propose and finalize these four determinations. I also thank the staff in the Office of the General Counsel and the Office of International Affairs for their support on these matters. RELATED LINKS CFTC Approves Final Capital Comparability Determinations for Certain Non-U.S. Nonbank Swap Dealers [1] Capital Requirements of Swap Dealers and Major Swap Participants, 85 FR 57462 (Sept. 15, 2020). The Commission issued the final rule on July 24, 2020.

The Commodity Futures Trading Commission announced today it has approved four comparability determinations and related comparability orders granting conditional substituted compliance in connection with the CFTC’s capital and financial reporting requirements to certain CFTC-registered nonbank swap dealers organized and domiciled in Japan, Mexico, the European Union (France and Germany), or the United Kingdom. Pursuant to the orders, non-U.S. nonbank swap dealers subject to prudential regulation by the Financial Services Agency of Japan, the National Banking and Securities Commission of Mexico and the Mexican Central Bank, the European Central Bank, or the United Kingdom Prudential Regulation Authority may satisfy certain Commodity Exchange Act capital and financial reporting requirements by being subject to, and complying with, comparable capital and financial reporting requirements under the respective foreign jurisdiction’s laws and regulations, subject to specified conditions. The comparability orders will become effective upon their publication in the Federal Register. For several order conditions imposing new obligations on non-U.S. nonbank swap dealers, the CFTC is granting an additional compliance period of 180 calendar days. To rely on a comparability order, an eligible non-U.S. nonbank swap dealer must notify the CFTC of its intention to satisfy the CFTC’s capital and financial requirements by substituted compliance. The non-U.S. nonbank swap dealer may not apply substituted compliance until it receives confirmation from CFTC staff that the swap dealer may do so. The notice of intent must include certain representations enumerated in the respective order’s conditions and must be submitted to the following address: MPDFinancialRequirements@cftc.gov. RELATED LINKS Fact Sheet Japan Order Mexico Order European Union (France and Germany) Order United Kingdom Order Supporting Statement of Chairman Rostin Behnam Regarding Final Capital and Financial Reporting Comparability Determinations and Orders for Certain Non-U.S. Nonbank Swap Dealers in Japan, Mexico, EU, and the UK

Central banks should embrace artificial intelligence (AI), anticipating its impact on the economy and financial system and harnessing it in their own operations. Widespread adoption could have repercussions for inflation dynamics. The financial sector is among the most exposed to the benefits and risks of AI. Benefits include improvements for lending and payments; risks include more sophisticated cyber attacks. The increased importance of data as a cornerstone of the AI revolution hastens the need for central bank cooperation. The rapid adoption of AI requires central banks to embrace the new technology, the Bank for International Settlements said today, urging policymakers to anticipate the transformative effects of AI on the economy and to use it to sharpen their own analytical tools in pursuit of financial and price stability. The special chapter of the BIS Annual Economic Report 2024 lays out the implications of new AI applications for central banks. AI is poised to impact the financial system, labour markets, productivity and economic growth. With widespread adoption, it could enhance firms' ability to adjust prices faster in response to macro-economic changes with repercussions for inflation dynamics. The job of central banks as stewards of the economy will also be directly affected as frontline users of AI tools. Central bank use cases for AI include enhancing nowcasting by using real-time data to better predict inflation and other economic variables and to sift through data for financial system vulnerabilities, allowing authorities to better manage risks. Data have become an even more valuable resource with the advent of AI and will be the cornerstone of central banks' use of the technology.    New generation AI models have captured our collective imagination through their uncanny abilities, but they also have a direct bearing on how central banks do their jobs. Vast amounts of data could provide us with faster and richer information to detect patterns and latent risks in the economy and financial system. All this could help central banks predict and steer the economy better.   Hyun Song Shin, Head of Research and Economic Adviser at the BIS The effects on demand and therefore on inflationary pressures will depend on how quickly displaced workers can find new jobs, and whether households and firms correctly anticipate future gains from AI. In the short-run, supply could outstrip demand, which could lower pressures but those effects could reverse over time as demand also catches up through higher incomes. Central banks will need to stay attuned to these dynamics in their monetary policy. In the financial sector, AI can improve efficiencies and lower costs for payments, lending, insurance and asset management, the report said. The BIS cautioned that AI also introduces risks, such as new types of cyber attacks, and may amplify existing ones, such as herding, runs and fire sales. The BIS Innovation Hub is testing AI's capabilities in several areas together with central bank partners.   Central banks were early adopters of machine learning and are therefore well positioned to make the most of AI's ability to impose structure on vast troves of unstructured data.For example, Project Aurora explores how to detect money laundering activities from payments data and Project Raven uses AI to enhance cyber resilience, to mention just two from our portfolio.   Cecilia Skingsley, Head of the BIS Innovation Hub Background: The BIS Innovation Hub aims to develop public goods in the technology space. The full BIS Annual Economic Report 2024 and the BIS Annual Report 2023/24 will be published on 30 June.   Related information Annual Economic Report Chapter III

CME Group, the world's leading derivatives marketplace, today announced that its new U.S. Credit futures have traded 415 contracts since their launch on June 17. "In just one week since launch, our credit futures are generating strong trading activity as clients turn to more capital efficient ways to manage their duration risk and U.S. credit exposure," said  Agha Mirza, CME Group Global Head of Rates and OTC Products. "These products have already provided bid-offer spreads lower than 0.1% of index points, as well as offered access to an anonymous, centralized marketplace with significant potential margin offsets." "We welcome the new credit index futures at CME Group," said  Matthew Angelucci, Portfolio Manager at PGIM Fixed Income. "The opportunity to isolate credit or duration risk while benefiting from margin offsets with CME Group's deeply liquid futures markets enables us to hedge our portfolios and provide greater liquidity to a greater number of clients." CME Group credit futures are the first futures contracts to help market participants manage duration risk through an intercommodity spread with U.S. Treasury futures. In addition, for the first time ever, investors can gain exposure to and manage credit component risk through futures on Bloomberg's duration-hedged index. Clients can benefit from automatic margin offsets against CME Group's Interest Rate and Equity Index futures. For more information, please visit www.cmegroup.com/credit.

Trading Technologies International, Inc. (TT), a global capital markets technology platform provider, today announced that it has partnered with Hidden Road, the global credit network for institutions, through Hidden Road Partners CIV US LLC, its futures commission merchant regulated by the U.S. Commodity Futures Trading Commission (CFTC). The move will enable Hidden Road clients to utilize the TT platform for trading across a broad range of asset classes and products, including traditional cleared derivatives as well as digital assets. TT is the first independent platform Hidden Road has made available to clients for cleared derivatives. TT COO Justin Llewellyn-Jones said: "Like TT, Hidden Road is a fast-growing and trusted partner to institutional clients, and we're very pleased to make our platform available to its wide base of clearing and prime brokerage customers. Our expanded cross-asset coverage will give Hidden Road's prime brokerage clients the ability to trade a breadth of asset classes, products and global markets through TT." "As Hidden Road continues to expand our product coverage – now including FX, cleared derivatives, OTC derivatives and synthetics, digital assets and more – offering our counterparties streamlined access to leading third-party technology is a logical extension of our strategy," remarked Michael Higgins, Global Head of Business Development at Hidden Road. "TT is recognized throughout the industry for its broad coverage and low latency, both of which align with Hidden Road's modern approach to quantitatively driven credit intermediation and multi-asset prime brokerage." The TT platform is a global financial ecosystem for institutions and professional traders that offers end-to-end, cross-asset, interoperable solutions for managing the full lifecycle of derivatives, commodities, fixed income, foreign exchange (FX) and digital asset trading. The platform streamlines high-volume, real-time trade order entry, execution and workflow automation. Handling 2.2 billion transactions in 2023, the broker-neutral Software-as-as-Service (SaaS) solution provides connectivity to more than 100 global exchanges and liquidity venues. The platform's breadth and rapid scalability allows institutions to meet a full range of needs throughout their organizations, from order and execution management and algorithmic trading through to surveillance and risk management, analytics and data, infrastructure and hosting, and post-trade allocation.

Chapter III: Artificial intelligence and the economy: implications for central banks Press release: Central banks must prepare for AI's profound impact on economy and financial system: BIS (French, German, Italian, Spanish)    The chapter tackles the implications of artificial intelligence for the global economy and central banks. Key takeaways Machine learning models excel at harnessing massive computing power to impose structure on unstructured data, giving rise to artificial intelligence (AI) applications that have seen rapid and widespread adoption in many fields. The rise of AI has implications for the financial system and its stability, as well as for macroeconomic outcomes via changes in aggregate supply (through productivity) and demand (through investment, consumption and wages). Central banks are directly affected by AI's impact, both in their role as stewards of monetary and financial stability and as users of AI tools. To address emerging challenges, they need to anticipate AI's effects across the economy and harness AI in their own operations. Data availability and data governance are key enabling factors for central banks' use of AI, and both rely on cooperation along several fronts. Central banks need to come together and foster a "community of practice" to share knowledge, data, best practices and AI tools.   Read more...   The full Annual Economic Report, to be released on 30 June, will look at the outlook for the global economy and lessons learned from 25 years of monetary policy.

To catalyze a viable blue finance market, foster green bonds and support smaller businesses in Vietnam, IFC is providing a financing package of $150 million to Southeast Asia Commercial Joint Stock Bank (SeABank, stock code: SSB). The investment entails Vietnam's first blue bond and the first green bond by a private commercial bank in the country.   As part of that, IFC's $25 million subscription in blue bonds will allow SeABank to expand its funding for sustainable economic activities associated with ocean and water (aquaculture and fisheries, water supply, etc.). IFC's $50 million subscription in green bonds will help the bank increase financing for green assets (green buildings, renewable energy, and energy efficiency). As the implementing entity of the UK's Market Accelerator for Green Construction (MAGC) Program, IFC will provide a performance-based incentive of up to $0.48 million targeting retail borrowers to help offset the incremental greening costs associated with green housing units purchase.  Additionally, IFC's $75 million loan to SeABank is aimed at promoting financial inclusion through boosting financing for SMEs, including women-owned businesses. "IFC's investment will help SeABank increase funding for initiatives that support the country's climate and financial inclusion agenda. We are proud to be issuing Vietnam's first blue bond and the first green bond by a private commercial bank. We look forward to working with IFC to further bolster our green and blue portfolio strategy," said Le Thu Thuy, Vice Chairwoman of SeABank BOD. Alongside the investment, IFC will advise SeABank on adopting green and blue bond frameworks, while helping SeABank identify eligible green and blue assets and develop a pipeline. "Vietnam's green transition relies heavily on private capital, and the launch of innovative financing instruments such as blue and green bonds offers a new source of funding for climate-related projects," said Thomas Jacobs, IFC Country Manager for Vietnam, Cambodia, and Lao PDR. "With investment in a leading player, IFC is establishing new asset classes while mobilizing capital and strengthening the capacity of local financial institutions to drive increased climate finance in Vietnam." Two parties have partnered since 2021 to expand SMEs lending via tailored products, increase climate finance access and international trade. With IFC's support, SeABank could develop an integrated ESG framework and prioritize funding for green projects, thereby promoting climate change mitigation and resource efficiency.