Going forward, our policy decisions will continue to be data dependent and will take into account new information as economic conditions and the outlook evolve. For guideposts on appropriate policy, the FOMC routinely looks at monetary policy rules that recommend a level for the federal funds rate based on measures of inflation and the cyclical position of the U.S. economy.
Growth in mortgage loans and mortgage-backed securities requires lenders to monitor and manage the significant and sometimes complex interest rate risk profiles associated with such exposures, especially as market interest rates have risen over the past several months. Compliance, too, has received more attention from both bankers and regulators. Historically, however, credit risk has been the most affected by changes in the economic cycle.