Most critics of HFT rely on three major arguments:<p>1) It is a front running operation.<p>2) It has no &quot;social benefit&quot;.<p>3) It increases volatility or structural instability.<p>Items 2 &amp; 3 are not germane to the question of &quot;it is a front running operation&quot;.<p>My response to item 1 is simply, no it&#x27;s not.  If you state it is, then either you have an unclear understanding of how market mechanics work, or a specific natural opposition to HFT systems.  When the OP said that HFT &quot;insert themselves into transactions&quot;, I really wanted him to clarify if he meant &quot;insert&quot; in the sense that he thinks they can change a standing order based on new orders before they execute, or the more general sense of &quot;inserting themselves&quot; that any middleman does in any commercial transaction.  That is, as an expert in sourcing&#x2F;warehousing&#x2F;etc items that have varied demand curves.<p>Your response (and the fed&#x27;s part in it) seemed to muddle the responses to items 2 and 3.  My answer (and the common one) to item 2 is that it provides liquidity cheaper than the prior regime.  That is largely not debated, though it is an open question of whether you could provide the same liquidity even cheaper within some other environment (batch auctions etc).<p>The question of whether HFT contributes to high volatility vs acts as a response to it is much more nuanced and I suspect unanswered&#x2F;unanswerable, but the problem with the Fed specifically speaking to it, is that the Feds own actions are at the heart of the question as well.  A given bank or investment fund service is unlikely to have the systematic impact of the Fed.<p>Finally, notice that the Fed did not speak to whether HFT lowers the cost of trading (ie item 2) they only spoke to the volatility question.  So using the Feds statements as a counter to the argument that HFT lowers the cost of trading does not work.