Fed Chairman Jerome Powell's testimony to Congress on monetary policy – 2/12/2020

the area will be put in order, Senator Brown is a little late, but I'm going to move forward because, as I think most people realize, we had to realign the timing of this hearing to accommodate the fact that Votes have been called. on the floor at 10:30 that means senators are going to have to stick to their five minutes and even then we may not be able to reach everyone and I apologize for that. I'm sure Senator Brown and I will stay for 15 or 20 minutes after the first vote so we can continue as much as we can.

I will give up my questions. However, I will not give up on my introductory statement and start with that right now. Welcome, Chairman Powell, today. Federal Reserve Chairman Jerome Powell will update. Committee on Monetary Policy Development and the State of the U.S. Economy The U.S. economy continued to expand in 2019, exceeding 2% growth for the third consecutive year as the American people enjoy the expansion. longest continuous economy in U.S. history the labor market is strong with the The workforce reached an all-time high of 164 million people and the most recent employment report shows employers added 225,000 jobs in just January, with an unemployment rate of 3.6 percent, remaining near half-century lows.

Salaries also grew 3.1 percent in January from a year earlier and this is important, since these are 18 consecutive months in which salaries have grown at an annualized rate of 3% or more. Americans' views on their personal financial situation are increasingly optimistic, according to Gallup trends. Nearly 6 in 10 Americans or 59% now say they are in better financial shape than a year ago, compared to 50 percent last year, 2017 tax reform and right-sized regulations, including those of the The Economic Growth Regulatory Relief and Consumer Protection Act of 2018 have undoubtedly helped fuel this strong economy and job market. benefit further when considering the effects of the US MCA and the phase 1 tray agreement with China, despite this substantial progress, there are several external factors that could have a significant impact on economic activity and our financial markets that need to be better understood, including the feds' decision to hold a significantly larger balance sheet going forward, including its recent decision to purchase Treasury bills in response to volatility in short-term borrowing rates, the future plans of the to maintain stability and short-term borrowing rates, including possible market-based structural solutions and transition risks away from LIBOR - an alternative reference rate and the steps that should be taken to ensure a smooth transition and slow down risks to businesses and financial markets and, finally, the potential so-called coronavirus impact on global trade and growth, the Federal Reserve has also taken a number of important supervisory and regulatory actions that deserve Attention, the Federal Reserve and others Federal financial agencies recently proposed amendments to the Volcker Rule that would improve, simplify, and clarify the covered funds portion of the rule.

That proposal builds on the agency's simplification of the Volcker rule in 2019 to improve market liquidity and preserve diverse sources. of capital for businesses while striking the right balance between safety and soundness. Additionally, many Republicans on the Banking Committee and I have raised serious concerns in the past with the agency's oversight and review processes, including its use of guidelines as rules, in January Federal Reserve Vice Chairman Quarles offered a fact sheet. route. Promote transparency, accountability, and fairness in banking supervision, including adapting the supervisory framework to better align with categories developed under the Federal Reserve's adaptation rules for domestic and foreign banks.

Provide important oversight guidance for public comment and submission to Congress under the Congressional Review Act. Other common standards. -There are perceived improvements in the supervision process, such as a regulation that would cover the use of guidance and supervision by the agency in the supervision process. This roadmap is very encouraging and I urge the Federal Reserve to take action to put it in motion. Finally, there is constant innovation including in the financial services industry to increase resources for unbanked and underbanked populations reduce friction in payments and increase efficiency in the delivery of financial products and services some recent examples are the announcement of Libre by Facebook, a new stable digital cryptocurrency backed by a reserve of real assets and leverage Blockchain technology works on behalf of global governments and central banks to explore the development of central bank digital currencies, especially amid of rumors that China's launch of a digital Hwa yuan is imminent.

The numerous applications of distributed ledger technologies, including in clearing and settlement, identity verification, and cross-border transactions. and some financial institutions adopting public cloud technologies, as I have said in previous hearings, it seems to me that technological innovations in this space are inevitable and that the United States should lead the development of what the rules of the road should be during this hearing. We look forward to hearing from you, Mr. President, on these important issues and the work the Federal Reserve is doing to adequately address them, and thank you again for joining us today, Senator Brown. Thank my Lord.

Chairman and Chairman Paul, it's a pleasure to have you back and thank you for your accessibility and the conversations you have with all of us in both parties on this committee before we begin. I want to say a few words about what happened last night when we found out that Jesse Liu's nomination had been withdrawn, she was going to appear in front of this committee or she was a people who was going to appear in front of the Senate when President Trump withdrew his nomination, she was going to appear in front of this committee tomorrow. I heard some of you, my colleagues and my friends, say that the president would be punished by impeachment.

Some of you told me you knew what the president did was wrong. Some of you told me privately how much you think he lies, but you also said publicly that this is true. It was not enough to get to the level of removal from office and many of you stated that he had learned his lesson, that he would not do these things again, that he would not try to do it by illegal means, that he would try to change the

2020

election, it is quite clear . The president of the United States learned a lesson, the lesson that he can do whatever he wants, whatever he wants, he can abuse his office, he will never be held accountable before this Senate, that was the lesson he learned now since the acquittal, he went on a tour of retaliation that began in the prayer breakfast a prayer breakfast, remember to continue through the East Room where many of you were in the audience and applauded him as he attacked personally and attacked the people who have served this country, removed Colonel Ben Minh, a patriot and Purple Heart recipient who spent his life. serving our country made fun of his accent is an accent of his Ukrainian accent fired Ambassador Sandlin, a Trump appointee, after testifying about the quid pro quo and yesterday and the reason I mention this today is because he continued the tour interfering in the Department of Justice political appointees with a heavy hand on rural career prosecutors those lawyers withdrew in protest those professionals I have no idea about their political party their professionals withdrew from the case in protest in at least one case they resigned from the department entirely We can't give him a permanent license to turn the presidency and executive branch into his own personal revenge operation.

Everyone knows what's happening, even the senator who just retired knows what's happening. I'm afraid that's what we're going to do. We are looking at a personal vendetta operation, no one should be above the law if we, if we don't say anything and I include everyone on this committee, I include myself, if we don't say anything it will get worse because the behavior will get worse, the tour retaliation will continue. We all know that promise, president, now there are two issues at hand. I welcome President Paul earlier this week. Bloomberg reported on a profitable and fast-growing Spanish company.

Dolor Falls has opened locations in 36 states. They buy and sell plasma. Nice clinical sounding word that means blood. As we know, Americans struggling to make ends meet are lining up to sell their blood to put food on the table, the blood collection business is booming, shame, all the stocks are doing great, it's hard to think in a better metaphor for the Trump economy on Monday. the S&P 500 and Nasdaq hit record highs 2019 JPMorgan Chase had USS Bank's best year in history 36 billion 36 that wasn't millions of dollars in profits large corporations are spending hundreds of billions of dollars on stock buybacks and paper dividends the economy has been expanding uninterrupted for more than ten years, although the growth in the last three years of the Obama administration has been greater than the growth of the first three years of the Trump administration, we also know that , but if you talk to the vast majority of people who rely on paychecks, not investment portfolios, to make a living, it's a very different story.

They have been bleeding for years. Most families don't understand why the more they work, sometimes at more than one job, the harder it becomes to pay for almost all child care. healthcare rental college tuition People in this room may remember last September, when the financial industry panicked over a benchmark interest rate that soared above 10 percent. Wall Street faced uncertainty, so we respond leptin-fueled to actions smart government employees came up with a plan that led to the federal reserve lending about $200 billion each day to the financial markets through a mechanism that was not has used since the financial crisis 200 billion dollars every day let me be clear, I do not think it is wrong for the Federal Reserve to be creative and make sure the economy continues to function, it is in everyone's interest, mr. president so that banks keep lending money and credit keeps flowing so that companies can invest in manufacturing consumers can buy houses and cars my problem is this when Wall Street faces uncertainty no one at the Federal Reserve takes action or gets creative the president does not criticize by tweeting in person but by name the

chairman

of the Federal Reserve when he says that he never demands that corporations raise the wages of their workers, that is never his criticism of President Paul, it is difficult for families to understand why Wall Street gets angry at 10% interest. rate when so many families are lucky if the street payday lender charges them less than 400% small businesses struggling to make payroll don't have access to so-called buyback funds at their local Federal Reserve branch the Fed Doesn't Take Action Won't take action when its own research has found that 40% of Americans don't have the cash we think;

There probably aren't many people in this courtroom, but 40% of Americans don't have $400 in cash when their car breaks down. They get to work trying to fix it, so they go to the payday lender and then things go south and no one is sounding the alarm when 40 million Americans predict they won't make at least one credit card payment, which means 1.2 billion dollars. and late fees will flow out of the pockets of struggling families to help JPMorgan and Chase make $36 billion last year. Serious people haven't dropped everything to reduce housing costs or raise wages once they discovered that one in four renters are paying. more than half of their income goes towards housing something goes wrong in their lives their lives are turned upside down people look they see two different economies and two different responses we hear a lot about the divisions in this country between red and blue between rural and urban On the coast and in the center people watch MSNBC and people watch Fox, but people in all these places feel that no matter how hard they work they can't maintain any real economic security.

The real divide I see is between those whose problems are considered an emergency in Those fighting Wall Street in much of Washington have decided they can ignore that theFed needs to get creative for the people who make this country work. In particular, it has become abundantly clear that the president and the majority leader are simply not willing to flaunt President Trump. a storage stock market that is inflated with its deficit busting million dollar tax breaks for billionaires deficits topping trillion dollars you don't hear much about it anymore and now you want to pay for those tax cuts sorry or we have a big Duff deficit I have to pay for those tax cuts like he said in Davos and he is saying that in his budget by cutting Medicare and Medicaid and Social Security he lies about a blue collar boom I heard at the State of the Union at night .

I was in quite a bit of disbelief when my own job growth in the state of Ohio has been a our non-existent manufacturing jobs are stagnating compared to when he took office and now in his budget after promising workers in Lordstown Ohio not to sell their homes, we will get those jobs back to pay off the loan. program that was giving the Lordstown community a little hope that some manufacturing jobs would actually return President Paulo, you and your highly trained staff and the Federal Reserve have been proactive and creative and have protected Wall Street and the money markets from erratic behavior of the president. and I'm glad you did, we're all pretty sure of that, but what I'm hoping to hear from you today is how you're going to be proactive and use that same level of creativity to make this economy work for everyone else.

Thank you. President Powell, for my part, I congratulate you on the work that you are doing. I think there are tremendous results that I hope he will discuss with us today from the efforts that he has made. Now you can make his statement and then we will proceed. thank you very much Chairman Crapo Ranking Member Brown Committee Members I am pleased to present the Federal Reserve's semiannual

monetary

policy

report, my colleagues and I strongly support the goals of maximum employment and price stability that Congress has established for

monetary

policy

. Congress has given us a significant degree of independence to pursue these goals based solely on objective data and analysis.

This independence brings with it the obligation to clearly explain how we pursue our objectives. today's objectives I will review the current economic situation before turning to monetary policy the economic expansion is now in its eleventh year and is the longest recorded during the second half of last year economic activity increased at a moderate pace and the labor market was strengthened further as the economy appeared resilient to the global headwinds that had intensified last summer inflation has been low and stable but has continued below the FOMC's symmetrical 2 percent target. Job gains averaged 200,000 per month in the second half of last year and an additional 200. and twenty-five thousand jobs were added in January, the pace of job creation has remained above what is necessary to provide employment for new workers entering the workforce, allowing the employment rate to decline over time.

Throughout last year, the unemployment rate was three points. six percent last month and has been near half-century lows for more than a year job openings remain plentiful employers are increasingly willing to hire lower-skilled workers and train them as a result the benefits of a labor market strong have been shared more widely among people living and working in low- and middle-income communities are finding new opportunities employment gains have been widespread across racial and ethnic groups and education levels wages have increased, especially in the lowest paid jobs. GDP increased at a moderate pace during the second half of the year.

Last year, consumer growth and spending moderated toward the end of the year after earlier strong increases, but the fundamentals supporting household spending remain strong. Residential investment rose in the second half, but business investment in exports was weak, largely reflecting slow growth overseas and trade developments. The factors weighed on activity at the country's factories, whose output declined during the first half of 2019 and has changed little on a net basis since then. The February monetary policy report analyzes recent weakness in the manufacturing industry. Some of the uncertainties around trade have eased recently, but risks to the outlook remain.

In particular, we are closely monitoring the emergence of the coronavirus, which could cause disruptions in China that spread to the rest of the global economy. Inflation was below the FOMC's symmetrical 2 percent target throughout 2019 for the 12 months through December. General inflation. based on the price index for personal consumption expenditures was 1.6 percent, core inflation, which excludes volatile food and energy prices, was also 1.6 percent in the coming months. We expect inflation to approach 2% as the unusually low readings from early 2019 fade from the 12-month estimate, the country faces significant longer-term challenges. Labor force participation is tied to people in their prime working years and is at its highest rate in more than a decade;

However, it is still lower than in most other advanced economies and there are labor-market issues. to parities between racial and ethnic groups and between regions of the country, furthermore, although it is encouraging that productivity growth, the main driver of increasing wages and living standards in the long term, has increased recently, increases productivity have been deficient throughout this long economic expansion. Boosting workforce participation and productivity growth would benefit Americans and should remain a national priority. I will now turn to monetary policy. During the second half of 2019, the FOMC adopted a more accommodative monetary policy stance to protect the economy from weaker global growth and trade developments and to promote a more rapid return of inflation to our symmetrical 2 percent target, we reduced the target range of the federal funds rate at our July, September and October meetings, bringing the current target range to one and a half to one and three-quarters percent and our At later meetings, when some uncertainties around trade had eased and amid some signs that global growth may be stabilizing, the committee left the policy rate unchanged.

The FOMC believes that the current monetary policy stance will support continued economic growth. A strong labor market and inflation returning to levels. The committee's symmetrical 2 percent target As long as incoming information about the economy remains broadly consistent with this outlook, the current stance of monetary policy will likely remain appropriate, of course, policies that will not follow a preset course if they emerge. events that cause a material reevaluation of our perspective. would respond accordingly by taking a longer-term view there has been a decline over the last quarter century in the level of interest rates consistent with stable prices and an economy operating at its full potential this low interest rate environment may limit the ability of central banks to reduce policy interest rates sufficient to support the economy during a recession Taking this concern into account, we have been conducting a review of our strategic monetary policy tools and communication practices.

Public participation is at the center of this effort through our Fed listening to the events we have been listening to. from representatives of the business community, consumer labor and other groups, the February monetary policy report shares some of what we have learned, the insights we have gained from these events have informed our framework discussions, as reported in the minutes of our meetings, we will share our conclusions. When we finish the review, probably in the middle of this year, the current low interest rate environment also means that it would be important for fiscal policy to help support the economy if it weakens, put the federal budget on a sustainable trajectory when the economy is strong. help ensure that policymakers have the space to use fiscal policy to help stabilize the economy during a recession. a more sustainable federal budget could also support long-term growth of the economy.

Finally, I will only briefly review our planned technical operations to implement monetary policy. and the February monetary policy report provides details of our operations to date Last October, the FOMC announced a plan to purchase Treasury bills and conduct repurchase operations and these actions have been successful in providing an ample supply of reserves to the system banking and effective control of the federal funds rate as our bill purchases continue to build reserves toward levels that maintain ample conditions, we intend to gradually transition from the active use of repo operations and, as reserves reach levels broad durables, we intend to slow down our purchases at a pace that allows our balance sheet to grow in line with the trend demand for our liabilities.

All of these technical measures support the efficient and effective implementation of monetary policy. They are not intended to represent a change in the monetary policy stance. As always, we are ready to fine-tune the details. of our technical operations as conditions warrant. Thank you. I will be happy to answer your questions. Thank you President Palin, as I said before, I will not use my five minutes for questions and, indeed, I will not use much of my five minutes. trying to set a standard for the rest of the committee members before giving Senator Brown's time; However, and to give up my time, I wanted to point out that I have been informed that Senator Shelby, who fortunately cannot be here right now recently became the longest-serving member of the Senate Banking Committee in history.

He began his service on the committee on January 6, 1980 and has now turned approximately 33 years, one month in six days, which surpasses Senator Sparkman, interestingly also of Alabama, who previously served on the Banking Committee between January 6 1947 and January 3, 1979, almost 32 years. Senator Shelby has clearly seen dramatic changes in the financial services industry over those years and has himself had a significant impact on financial institutions' markets and consumers during his tenure on the committee. even as Chairman I take this opportunity to thank you for his service on this committee and congratulate you on this important milestone Senator Brown, he is not here I will give you my time and you will applaud again when you come.

Thank you mr. The president appreciates that when the Federal Reserve says that maximum employment is approaching, the labor market is strong, it could mean that workers have a well-paying job or a commune, that a worker works less than 40 hours in three part-time jobs with a minimum wage. I think this highlights how the economic recovery has not benefited almost everyone, you hear these statistics 40 percent of 50 percent of the sorry 25 percent of people can pay half their rent and half their income and rent 40 percent of Americans can't get $400 so clearly that doesn't reach everyone if you have to work three jobs or if you're working one job and one of the 10 fastest growing professions, 7 of every 10 of those jobs are this, you still can't pay the rent, something is wrong.

I appreciate you being on a listening tour and I look forward to reporting, but I want to know who they have at the Federal Reserve working on bold and creative ways to use federal authority, some tools that we probably don't know about using their authorities to help the working families and We don't benefit from economic growth, what can we do to make sure that the majority of our economic growth is not even a smidgen, but that the majority of our economic growth ends up in the pockets of working people? Well, our tools are not focused on distributional effects, they are really focused.

In terms of aggregate effects, we don't have the tools that other agencies have, and of course elected officials really have the power to address those issues, but I will say that, you know the goal of our monetary policy review, thefirst one we've done. The objective of this nature is to ensure that we have the tools to carry out the mandate we have been given of maximum employment and stable prices in a world where inflation is trending downward and where the Phillips curve is very flat, so so the connection between inflation and the rigidity of the economy are very, very low now and also where interest rates are quite low, which creates a very challenging environment for us to carry out the work that we have been given and That's why we're doing a deep dive into issues around strategy tools and communications or, okay, I'm asking you and these conversations can also take place individually, but I'm asking you to be as creative as the Federal Reserve was. .

I mean, I just have a list here of extraordinary federal actions that Congress doesn't need. I'm not arguing that Congress has done its job. You know, Senator McConnell and the president have refused to raise the minimum wage. It has been stagnant for 11 years. Below 8 dollars, they took away overtime from about two or three million. Americans because of truncating the overtime rule, tax cuts for the rich and now cuts for medical spending, I know that Congress is not doing its job of reading crookedly to redistribute income in any way that is fair for hundreds of millions of Americans, we know that, but only this. quickly list Maiden Lane's direct asset purchases the line of credit for primary dealers the conversion of investment banks into bank holding companies so they could borrow through a discount window the Federal Reserve has been very creative for the benefit of the country when Wall Street has hit hard times time, sometimes it's its own creation, but the Fed is a supporter of the Fed, some people with my political philosophy are not and I think they have.

You have taken a step forward in many ways. I ask you to be equally creative in thinking about shapes. that this wealth is shared beyond the 1 or 2 or 5 or 10% who are doing very well and who are excited about the economy as it is and you just don't get to as many other questions, mr. President: I am concerned about other risks in our economy. I'm glad the feds are getting serious about leveraged lending and incorporating it into relief tests, at the same time we see the financial system becoming more and more exotic. JPMorgan Chase is supposedly in its affiliated funds.

Buying a power plant in El Paso also owns a stake in a nuclear power plant, meaning JP Morgan Chase could likely own a nuclear power plant. Japan's equivalent of Amazon wants to form an industrial lending company in Utah so it can reap the benefits. from being an unregulated bank and recently voted with other banking regulators to weaken the Volcker rule by rolling back protections in the 2013 rule, allowing riskier, more leveraged investments. Are we heading in the right direction? It seems that the financial system is once again becoming more complex. more exotic things that people don't understand, shouldn't we focus on simplifying it?

Well, what we're focused on is maintaining much higher capital, much higher liquidity requirements, stress tests, as you pointed out, that keep banks on their toes. and timely addressing the issues of the day and also resolution planning, so those were the big four important measures that we implemented after the financial crisis and we are focusing on sustaining them, making them more effective and keeping them strong. Senator Toomey thank you very much mr. president welcome back mr. President, it's a pleasure to see you again. I have several somewhat technical questions that I'd like to go over with you, and some of them we've discussed to varying degrees in the past, but one is the feds' real-time pay system, as you may recall.

I was never convinced that it was a great idea for the Fed to implement this, since we have a private sector system in place and really encouraged by the Fed back in the day, but I understand that the Board of Governors has made its decision. Here is my question for you, several constituents have expressed concern that we will end up with two systems that are not fully interoperable and to the extent that employers, financial institutions and other participants would connect to different systems if they are not fully interoperable, there is a real concern that that, at the very least, will diminish the ability to innovate on these systems in the future, so I'm wondering if you could briefly, because I do.

I have several other topics that simply address the question of whether it is a Federal Reserve priority to ensure that the current Federal Reserve system is fully interoperable with the Clearinghouse system. Full disruption capability is the goal. It will be a challenge to achieve this, but it is one of our priorities to ensure interoperability is something that we are very focused on at the design stage, okay, and as I'm sure you know, the Clearinghouse system is committed to having fixed rates and not offer volume discounts. and the size of the transactions, as long as the current Federal Reserve system does not provide those types of discounts, can kill them.

The Federal Reserve is committed to having uniform prices on this platform. We have not made that commitment and it is not clear if that is what we want. The banks that really wanted us to do this are looking. Well, just this is often cited as one of the reasons why the Federal Reserve needed to do this because the private system could discriminate based on price, so I think it's important that the Clearing House The Clearing House system Representatives have said clearly that they are happy to be regulated if necessary to ensure this happens. It would be really ironic and a shame if it turns out that it is, in fact, the Federal Reserve that is making it more expensive for small banks to participate, so let's continue so far, as we've discussed, you know that one of the challenges of replacing LIBOR is that LIBOR has an element of credit risk built into it, it is an interbank rate, whereas until now it is a risk-free rate because it is essentially a repo rate. and that mismatch could possibly create some problems, especially to the extent that banks fund themselves in an interbank market that is subject to credit spreads that they may not reflect and therefore a mismatch in assets and liabilities could become problematic, so my question is: I think yesterday I may have done it and I didn't see the transcript, so correct me if I'm wrong, but I may have suggested that there is an idea of ​​trying to introduce a credit component, some type of credit spread or credit risk component as a compliment or an alternative or somehow integrate that with Sofer and I wonder if I understood it correctly.

It's something you guys are thinking about. Are you worried about that? I will quickly say that LIBOR itself will do it. Don't assume it will be released after the end of 21, so that hasn't changed and everyone needs to keep that in mind, so what will be the rate at which many of the derivatives and many others around the world are going. the broader financial system will be put in place but several banks have come forward and said they want to work on a separate rate that would not replace Sofer but would be credit sensitive and that is why they are doing it now and we are working with They must support that process, so it's not us, you know, we're open to that, but that doesn't mean that the transition out of Live Word is Sofer will stop, it has to move forward, okay, the last thing. on my list here the glitch in the repo market, as you and I briefly discussed Mike, my concern is when banks choose to earn less than 2% on excess reserves when they could be earning up to 10% at least briefly in the repo market, suggests that something is happening here, they could have put their money in the repo market, they chose not to.

No, I'm not aware of an explicit rule that required that during the episodes where these rates skyrocketed, but it had happened anyway and so I'm wondering if I'm a little worried that there might be some sort of unspoken pressure for part of regulators to favor cash deposited at the Federal Reserve over liquidity in the form of repurchase transactions that goes beyond what is actually in the rules. And I wonder if you share that concern, what do you think about it? I know the feds' response has been to provide liquidity and that works at some point, but if there is an underlying problem that hasn't been fixed, then it hasn't been fixed.

There is a risk that the increase in repo rates could occur again and then you will have to provide liquidity again. Could you safely address that so that there is no preference for reserves over Treasuries in the LCR, but there is in domestic liquidity? stress tests in the sense that they are, you know, it takes a day to convert our treasury into liquidity, it just exists inherently and I think the idea of ​​putting those who put up the Treasuries and the reserves on a level playing field in terms of their treatment so that they can Achieve liquidity is a good objective because we do not want banks to have to have more reserves than they really need, as long as the overall level of liquidity is at the appropriate level.

If we want to tilt them in that direction, we might be doing that. You may have seen Vice President Quarles give a speech about this and talk about this at some length, so we are looking at ways to address that and one of which is to simply assume that the discount is an available window in that stress test, which is a reasonable assumption, but I think there are things to do there and the reason is, as you mentioned, there was liquidity but it didn't flow. so it was not liquid and the question is why not and we are looking for ways to address it that do not undermine safety and soundness but make the markets work better.

Thank you Senator Reid. Well thank you very much. Chairman, let me thank you, Chairman Powell, for your leadership, thank you for joining us in Providence, it was a wonderful evening and I think it is also important that your efforts to ensure the independence of the Federal Reserve without an independent Federal Reserve, our national policymaking be my See Sirleaf Lord, so continue your efforts please, we mentioned that you mentioned that we have had to expand the economy for 11 years, by my calculations, which would be eight years under President Obama and three years under President Trump, but expansion is good, but there are still Some issues that I think we should address: The Pew Center released a report in January and it indicated that the share of wealth in the hands of middle-income families has been falling terribly for 20 years and I guess I would like you to comment if it continues to fall. they fall despite this expanding economy and on top of that they point out that income inequality in the US has increased since 1980, if it continues to increase please comment on that and is it higher than in peer countries, other countries that They are similar to us, in many other aspects.

Despite this expanding economy, if we are seeing a reduction in wealth in the middle class and income inequality, those are social, political and economic trends that I do not believe are sustainable over time, they go into the fabric of the country and those trends are too. continue and what policy we can adopt, both fiscal and monetary, to change them. Those are longer-term trends that I think are driven by important underlying factors, many of them global, so I think I would assume the data will continue to move. In that direction, I think what they show is that income has increased across the income spectrum, especially if you look at earnings and the after-tax effect, it becomes more uniform in that sense, but it has been a moment especially good for being at the higher end of the income spectrum and I would like to point out two key issues that I think we had to address: one is low mobility, we actually have lower mobility from, say, the bottom quintile to the middle quintile or the top quintile. than many other advanced economies. not our self-image as a country and something we need to address the other is just the relative stagnation of those incomes at the middle and lower end, you know, we want, of course, prosperity to be widely shared and it all comes down to really education. and training and things like that that allow people to be successful in the modern economy, which is a globalized economy that has less to do with manufacturing and manufacturing jobs are more technical than they were, so we need a force labor that can benefit from technology and globalization and those are policies that the Federal Reserve does not have in our hands no, we do not have those policies but if we just sit back those trends will continue andThey will cause even more divergence among the vast majority of Americans and very little covariance, so it is up to Congress and the executive to start taking action.

It was that fair. I think so and I also think that corporate America very much understands this now if you talk to business leaders, they see the workforce and the need for a You know, we don't want prosperity to be shared as widely as possible. You hear it all the time from business leaders and certainly from government leaders as well. I think it's an important national priority. Thanks for just changing the subject, I'm sure the Community. The Reinvestment Act is being manipulated by both Currency Control and the FDIC and there has been some critical commentary of their efforts, not only from affordable housing advocates but also from some banking institutions who say they are not doing a proper cost-benefit analysis that your proposal could inadvertently discourage revitalization of the neighborhoods that really need it the most and why can you tell us what role it could play and how you can help do it right?

So, first of all, we are not going to comment on your proposal and it is available for a proposal. I think all of us, including the FDIC and the OCC, are eager to see those comments and learn more. I believe we share the goal of modernizing the technology and demographics of the CRA. They have really changed the delivery of banking services, particularly in rural areas, for example, but everywhere, so it's time to do something that hasn't been done for 25 years. I think we agree on the goal, which is that we want to be more effective and it would help if it were more transparent, more objective, so I think we share goals with those agencies and we worked closely with them for a long time to try to be completely in line. tuning.

We developed our own approach, which was slightly different and we couldn't meet on it until the end, but I think we should see it as an ongoing process in which we will continue to learn. That will be our focus again. Thank you, Mr. President and I will be independent for the first time Senator Sassy Thank you President President Powell thank you for being here we are grateful for your work you have been constantly ringing the warning bells about what you call the greatest threat to the financial system with whom Many of us speak privately about cyber issues and you said it yesterday on the side of the house.

I don't think you're breaking through, can you summarize for us why you're lying awake at night worried about cyber attacks on our financial system? We get paid to stay up at night worrying about things and I would say if you look at what happened in the financial crisis, we had a game plan, we implemented it over ten years, I won't say it's perfect. or something like that, but we have a plan meant to address that kind of thing. What's new in the threat environment is that you know the current level of cyber threat and its increasing sophistication, and that's where we were.

You spend a lot of time worrying about that and then you know the Treasury Department has really been taking the lead on that and I think you know we have, so we're very focused on it, we're focused on making sure that the financial institutions that we we monitor are doing the best they can to maintain good state-of-the-art cyber hygiene. It turns out that a lot of these things are simply because people don't implement updating their software and things like that, that's where a lot of the breaches happen, so I mean there's an intense focus on the part of the supervisors and the financial institutions, also by finit unregulated, you know, non-financial institutions, companies that are in, you know, all types of businesses are having this now, it's a huge focus.

Never say that we have done it, it never seems that we have done enough, but it is something that we continue, we continue to try to improve more and more in many resources in all agencies and in all companies, and if the concurrency ties for us give us maybe two examples of one way you think this attack could take. You know, side effects. How did Domino's operate without giving someone a template or a roadmap? You have spoken privately several times about ways this could cause bigger consequences than 2008/9, how could that happen? Yeah, without wanting to get too much into that, I would just say that trust in the financial system is really important, people the public should have trust in the financial system and So, a successful cyber attack on a payment services company, for For example, would you know it would be a challenge?

We could address it, we could isolate it, we could fix it, but in some ways I would want to avoid broader blows to trust, because when trust weakens, people will take your money. They will stop acting and things like that, uncertainty and lack of confidence are enemies of economic activity and growth. I think we also need to recognize that a lot of different conversations we have with the Chinese government tend to have a benign diplomatic tone. I think we should highlight what happened this week with the Equifax hack that has new headlines, so the Equifax hack in 2017, which compromised the personal financial records of more than 30% (35%) of all Americans in the Department of Justice earlier this week, was accused of Chinese Communist Party officials affiliated with military intelligence in China this is not an accident, this is the same Communist Party that hacked OPM records and now moved on to Equifax.

Can you imagine scenarios where the Chinese Communist Party was hacking the US banking system? Well, we must be resilient against all cyber threats. and certainly you know that state actors are a big part of that and so we are very aware of them and, by the way, we have the help of the intelligence agencies and others in the government to watch for them to change a little bit of March. The president's budget came out last weekend and some of us will be on the finance committee later today discussing the larger budget. We tend to have headlines that focus on whatever discretionary programs tend to be hottest and most current in the news, but you've consistently talked about health rights and your defiance of the law or maybe more broadly than the health rights, the inefficiencies of our healthcare delivery system for a developed nation, we have very mediocre health outcomes and we have ridiculously high prices, can you?

Talk a little bit about the consequences of the health of the US on the competitiveness of our economy as a whole. I'd love to do it, of course. I should start by saying that we're not really making two fiscal policies and we don't give advice on fiscal policy, but since you actually asked about the budget, the biggest problem with our federal budget is simply its spending on health care and it's not that our benefits are too generous, but we deliver them in a way that is measured only by results. They are perfectly average for a first world nation, but we spend seven, six or seven percent of GDP more than other countries, so it is about to be met and that really is a lot of money each year that you are effectively spending and getting nothing and I have to leave it there, it's not for us or me to prescribe, you know, solutions, but I think that's what it's really about.

None of the things, of course, are very high profile and get a lot of reports, but ultimately. That's what drives him again. I would emphasize that it's not that these benefits are fabulously generous, they're just what people get in Western economies, but we deliver them at the cost of, you know, 17 18 percent of GDP and others do it at 11 percent of GDP. GDP, that's what we should focus on. Thank you, President, Senator Tester. Well, thank you, sir. Chairman, Ranking Member Brown, for having this hearing and I want to thank you, Chairman Powell, for yourself or for your work.

I didn't hear all of Senator Reid's questions, but if he's all about the independence of the Federal Reserve, count me on that block too. I think it's vitally important that you maintain that independence and hold on to it, and I applaud you for your efforts. What's more, both the Federal Reserve through one-third lower rates and Congress through increased spending and higher debt have been taking steps to boost the economy for a long period. of growth I am concerned that if we are approaching a recession and there are a number of indicators that concern me and that the options to address a recession are limited I want to hear his perspective on the ability of the Federal Reserve to react. an economic recession the tools thank you so a traditional tool, of course, is interest rates and low rates are not really an option anymore, they are a real fact and they persist, so we will have less room to cut, that It means that it is much more likely that we will have to resort to the tools that we used in the financial crisis when we hit the lower bound, which is the forward guidance that says we will keep rates low and then it is also the large scale asset purchases of securities.

In the longer term to reduce long-term rates and support the economy we will use those tools. I think we will use them aggressively if the need arises to do so, there is no need to do so now, but we will use those tools aggressively, the meaning of the review is that We are carrying out our strategic tools and communications at this time that we believe we will announce Our conclusions at mid-year is that we were looking to make sure that all of that in this low rate environment, a difficult environment for central banks and for those we work for, that we are using our tools to the best of our ability, that we have explored all the possible ways to find them, you know more, every fragment of political space, if you want, to be able to support the economy and, finally, I would simply emphasize that it is important that fiscal policy is in a position, as it always has been, to support the economy as well in a recession, so let me ask you this: the debt says 23 trillion right now, something like that is not correct, that is at what point do you eventually worry?

I mean, I think the president's budget just allocated another trillion to the debt. It's very difficult to say at what level you care. I would say I'm worried now because it's really the level of the rate. of increase is what we have to do is that the debt grows more slowly than the growth of the economy. If the economy is growing faster than debt, then effectively leverage is decreasing, so debt to GDP will not be what is happening is debt. GDP is rising and rising quite rapidly as these things go, other countries have managed to get to very high levels and have much more than ours, but what it means is that in 20 years we will be spending those tax dollars . our kids will spend those tax dollars on debt service instead of the things they really need, we'll send them those bills and then the debt won't go down if the economy crashes, no, not at all, quite the opposite. .

True, it becomes a much bigger problem. I want to talk about housing and because it's a big issue, I think everywhere in rural and urban America, from your position, what do you see as the challenge that housing challenges impact on people and the economy? In general, it faces difficulties and affordability. I mean, the housing industry is doing better, it's building more houses and it's profitable, and housing construction is increasing, but I think from the public's point of view, there's a problem that has to do with the difficulty in getting lots with you know they are simply supply-side limitations that keep the number of homes low, lack of skilled labor regulations of various types and therefore what you see in many places, not just the big ones cities, you see housing affordability challenges and it's a pretty large scale problem and I just want to ask this very quickly because there has been a lot of debate for several years and much of it was started by my senator to my left about the GSE reform: does GSE reform or lack of GSE reform have any impact on the housing situation I think in the long term it is very important that GSE reform happens and that we move forward.

I think it is a great pending task of the financial crisis. It's not really ideal to have the entire housing finance system. depending on them on the federal government in the long term it would be better to move forward with something that I believe in and I believe in the long term is a more sustainable base for housing financing thank you for your work I have some of the questions about agriculture we will put them a little for the record but thank you very much for your service thank you just focused on thank you mr. president mr.President, first of all, welcome and I just want to echo what some of my colleagues have said about the independence of the Federal Reserve and I think that on both sides of the aisle you will find strong support for an independent Federal Reserve.

I would like to start by saying by asking you about a rule that I recently submitted a comment letter on and that is the Fed's building blocks approach, as I mentioned in my letter, it doesn't seem to make sense for the Fed to resurrect the original calculation of the Section 171 of Dodd-Frank, I get it. that this particular calculation inadvertently imposed entry capital rules on banks as non-insurance savings and loan holding companies that have an entirely different business model. Congress spoke very clearly in passing the insurance capital standards clarification law that its The intention was for banks to be regulated as banks and for Insurance companies to be regulated as insurance companies given the clear intent of Congress.

Why did the Federal Reserve decide to review section 171? How does the Federal Reserve intend to move forward? Thank you for your comment. We received several comments on that topic and Of course, we have analyzed the change in law and the question we ask ourselves is if there is anything that you know what the nature of the change made in the law is and whether it applies here. We will review those comments and, as you know, we must consider them to reach an opinion on this. As you know, one of the reasons for having these open discussions is to draw attention to it and, in fact, I think it is a very serious issue and I think it needs the full attention of the Federal Reserve and I hope that they resolve it as soon as possible. as quickly as possible to avoid any lingering questions.

I'd also like to talk a little bit about the vice president. Quarles recently commented that corporate fixed investment in corporate fixed investment remains weak after declining over the course of 2019. Do you think it is fair to say that a large part of this is due to uncertainty regarding trade and that the Companies are waiting to see how trade tensions are resolved before they are prepared to make further investments, you know, I would say there are a lot of factors that we need to look at, one is simply the slowdown in global growth, particularly in the manufacturing sector, another is lower oil prices in the United States.

He claims that fixed investment is an important factor in business and that fixed investment is piercing our work and the opinion of many outside economists suggests that there is also a role for trade policy and trade certainty around trade policy, as well I mean the short answer to your question would be yes. I think there are advantages to the extent that companies see that the business situation has uncertainty around the business situation as if it has decreased and I'm just thinking. Recently I understand that there has been a discussion about groupthink and what the Federal Reserve's approach to meetings is like.

Do you think it is important for the Federal Reserve board to reject groupthink and consider a variety of different points of view? In fact, I believe it a lot. I am strongly inclined to think that it is necessary to hear all sides of a case, in fact, when I was a private equity investor. I used to speak out against my own agreements just to force people to defend them, so I would let you know that I really believe in things, so having diverse perspectives is essential. I really think we have, especially through If you think about it, the Reserve Bank system guarantees from an institutional point of view that we will always have diverse perspectives on monetary policy and regulation, you know where we get it from is one of the comments and from the disparate group of people that are on the board, if you look at who is on the board, several of us have experience primarily in the private sector and we bring that to the table so that you know that it is quite fair to say that There can be people with different points of view who can have very lively debates. and still, at the end of the day, still be part of a very strong team.

I really think it makes you stronger. I mean, I feel that way and of course we've had a lot of dissent at the Federal Reserve, yeah. years, thanks one last question when the board voted on its rule to adapt resolution plans last fall, Vice President Quarles made a statement essentially saying that more could be done when it comes to adaptation from an oversight standpoint Can you explain to us how? the Federal Reserve intends to move forward with this, so Vice Chairman Quarles gave a speech, as you, I'm sure you know, gave a speech on that and laid out a lot of points about it, and you know, Let's Sean, these were ideas, they are not yet at the stage of being proposed, but we will see them well, how they will manifest themselves, if they will come out as rules or if they will come out as a guide. some of this will be rule making some of this will be a guide some of this will be changes to the guide if you look, there are a lot of different ideas.

I mean, I think the key is that he highlights this, the tension between you know the right due. process and clarity that we depend on in our government, that should be the case, but also with oversight there is also a role for discretion and confidentiality, so I think it's a very thoughtful process to look at that and ask how we can make it more . transparent with more due process but still effective because supervision has to be firm but fair thank you, thank you sir. president thank you senator warner thank you mr. Sir. president president friend, it's a pleasure to see you again, thank you for a good job.

I'm going to make a couple quick comments echoing what the central rounds and Reid and others said. I think there are many of our independent institutions that are under attack these days. I share some of Senator Brown's concerns about the independence of the Department of Justice. I fight regularly to try to ensure that the intelligence community can maintain its independence. He would ask, frankly, if he sees efforts being made to undermine the independence of the federal government. you keep this committee fully informed. I think the independence of the feds is more important than ever right now.

I also want to follow up on my good friend Center's cheeky comments about Equifax. I share with you the belief in the challenges that China poses, but I also think between In the case of Equifax and credit rating agencies in general, none of us choose to be a customer of Equifax or any large credit rating agency that breaks into that .The cyberattack was due to the careless behavior of Equifax and the fact that we have not implemented frankly improved accountability rules around these credit reporting agencies is something I hope to know. I have spoken with the president several times.

I hope we come back. because I think that while we have to be on guard if we don't have at least de minimis standards and they can create this kind of obscene break in the cost of doing business, I don't think that's good for anyone and again I hope we get back to that. I also have a lot of questions for you, President Pala, yesterday in his

testimony

he spoke about this movement of his digital currency, something that interests me a lot, and he indicated that he knows what it is. There may be a backup digital currency in the United States.

We have the possibility to do that. The question I question is: would it be desirable? How do we know that I get the components of a digital currency? It could provide comfort and potentially even less friction. cost in terms of credit for consumers, but how do we weigh private privacy and cyber concerns? How would that relate to our retail banking system? Do you think the Fed has the ability to do this without

congress

ional approval? I have one last question about China's role in a space, but talk to me first about the domestic implications. Surely you have listed the potential costs and benefits that the benefits would include.

Perhaps greater financial inclusion. Lower costs. More convenience. and all of those risks or costs would include cyber risk and fraud risk and privacy risk and things like that, so I think there's a lot to weigh and a lot to work on, every major central bank in the world right now is doing a deep dive into digital currencies and we believe that it is our responsibility to be at the forefront of knowledge and think about a digital central bank. Would I act? Would you take positive action on this without input from Congress? Do you feel like you have that authority?

It will depend a lot on the design options. That is a good question. There is one we are working on. I would say we are working very broadly, including working with other central banks around the world on this, and there are many options. think, experiment and understand that we are winning and if necessary, if we come to the conclusion that we need more authority and that this is something appropriate, then we will ask for the authority, well, one of the things that you mentioned yesterday and I Enter Sharecenter Sass and several of us who are in the Intel community are concerned about China's rise in a number of areas and I think it's clear that China can move faster than we can on a digital currency.

You said you have some. visibility of what China could be doing with the digital currency. I'd love for you to spell a little. Do you think they will use their influence through their type of Belt and Road investment strategy and the number of countries they have bought? that system they could be, then you know also buy that Chinese digital currency, what would that do in cross-border terms? What would that do in terms of dollar supremacy? Any additional guidance you may have on your knowledge of China's actions in this space would be helpful. I would just say that we have to assume that what would that mean?

We have to ask ourselves what it would mean if China had a digital currency that had fairly wide adoption, even in other countries that I was asked that, I think we all also have to wonder what would happen if a private sector entity, you know, a large company with a large network of users has a digital currency, so it seems like it's already appeared and I think I had a pretty bipartisan concern about that, so that's why we're doing all this work that we need, we understand that it is. I would say Libre was kind of a fire, something that we've focused on in digital currencies, you know.

A couple of decades, but right now there's a small fire going on around the world, so we're doing a lot of work. Time is over. I just want to say that I would recommend having seen China's ability to move aggressively in a number of other areas starting to take shape. that Coalition of the Willing among other central banks sooner rather than later Thank you sir. President Senator Perdue Thank you President Mr. President, thank you for being here, it's a pleasure to see you. I just have a quick question in light of the moment you know we have two dynamics right now that are driving the economy in different directions.

Potentially, work is now a limiting factor in terms of us. We have about seven million job openings out of about five million people looking for work, so it's a phenomenon right now and it's a limiting factor. On the other hand, we have had low energy costs since 2007, when we have doubled our oil production so that we are now a net exporter of oil and gas, the largest producer in the world, eight percent of our economy is energy, the 15 percent of our capital spending goes so that today we produce 50 percent more barrels of oil per day than Saudi Arabia and about 18 percent of world production.

My question is, are we in an environment of low oil prices? energy, in what environment what meaning are you making of this over the next decade and what impact do you think that will have on inflation and deflation. I know you've talked about deflationary concerns in the past, where are we today on that big factor in our economy, energy? So, it's been transformative if you think about when we were in college, if energy was skyrocketing, inflation was going up, people were going out to work, there were long lines for gas. bomb, we now have a very large domestic energy and industry that amounts to a shock absorber when that happens, drilling increases with the price of oil, it puts people back to work, it controls prices, it controls inflation, so we are in a situation where it is worth it.

In that particular mechanism of rising inflation, it's just not happening anymore because the supply response of US industry is rapid and large, so you won't see that you know it has sustained effects on inflation and you won't see it have a sustained negative effects on growth because it somewhat roughly offsets the effect of lower energy prices on thepump and that will slow down the economy a little, but the new supply that arrives will put people to work, they will be different people, but Overall, it is a very different and better place to be. Are you concerned about the labor force participation rate with job growth over the past three years?

Labor force participation has recently increased a little, but it hasn't really moved as much as it could. I've thought it's a big surprise to the upside, which is great, but remember that predicting basically what workforce, just because demographics should reduce participation by about a quarter of a percent a year, has now been stable since 2013, we believe that there are more advantages, so what is happening is that labor is scarce everywhere, but there is actually a supply response from the public, which is a very positive thing and you know, We never thought we would see 63.4% labor force participation again, no one had that in their model seven years ago. but that's what we have and it's really something very positive.

Thank you mr. long time president mr. president thank you very much Oh, yield again thank you Senator Schatz Thank you mr. President: I thank Chairman Powell for being here. First question: how does income inequality affect economic growth? There is a lot of talk on the policymaking side about the impact on families, how this affects their analysis, and what can be done on their side of the business. Well, obviously, people who were at the lower end of the income spectrum whose income is not increasing, their consumption will be limited, since you know their consumption will be limited and their marginal propensity to consume with new dollars will be high in the as profits increase.

They go to the people at the top, their marginal propensity to consume from wealth will be low, so it won't affect GDP, it will go into savings, so those are those, but those are effects that will show up, you know? Quite gradually over time equality is a gradually moving phenomenon, tell me about the relationship between productivity and unemployment, is there a new relationship emerging? Are there any new thoughts in that regard? Because I think the traditional analysis is that productivity increases. that's basically good for the economy, but it seems to me that at least the way people perceive it is that those two things are decoupled, that productivity increases, that doesn't mean that wages increase and I wonder if that's a change or if that's some kind of political overlay to say, hey, look, things may look good, but we're still at the bottom eating your leftovers.

I'm wondering if it's more than that and if there's actually a change in the way I analyze this well. I think we are always learning and we are always learning and we have seen relatively low productivity in the wake of the financial crisis and it appears to be persistent and that will mean lower wages; Ultimately, what you need is for it to increase. productivity to create rising living standards, it just has to be that way, it doesn't mean that in any given year you'll see that, but you do see a pretty close connection between whether you add benefits, not just wages, but also When looking at the total cost of employment, It seems that no, I wouldn't call it strict, but there is a connection between the two.

I guess the question is that they are no less correlated than before. I wouldn't say that. No, I would say that if you look at the moment, if you think that wages are around 3%, productivity growth has been low, recently it has gone up, recently it has gone up about 2% and inflation is 2%, yes , The other thing. I would add that if you're doing full compensation, if all, if most of the increase in total compensation is just because the employer absorbed a 7% increase in healthcare costs, you know that's not really an increase. in salaries in the traditional sense, I understand that from the employers' point of view it feels like an increase in salaries, but if you're trying to maximize compensation, it doesn't mean anything to a normal person who says: "Okay, I guess I don't have more money, but it costs my employer more." I should be happy about that, let me move on to the weather.

I have a couple questions: What is the Federal Reserve doing regarding climate-related financial disclosures? I know they are making some progress. I would like you to talk about that, so I mean. I think we, like others, are at the beginning of the process of understanding how climate change affects our work. I think one way to know that it will affect our work is for the public to count on us to make sure that the finance The institutions that we regulate, the central counterparties, the banks, things like that will be resilient to the risks that come from climate and, as I said , it's worth starting to understand exactly what that all means in terms of disclosure, you know, it's more of an FDIC thing.

They are the ones who regulate proper disclosure. I think they've been working on this lately. You had an exchange with a House member. I think it was yesterday and the question was whether we should do stress testing. for climate risks and you said you are watching the Bank of England. I'm wondering if you can elaborate on this, so you are doing resistance testing that is not at all related to sea carp, what would be the secret process? one that relates to the amount of dividends and distributions a company can have. This is more simply exploratory. There are exploratory scenarios and we are monitoring that work very closely.

You know, we have good relationships with the major central banks, especially. the Bank of England and others, so we will look at it and it is something we will be thinking about, we have not made any decisions, but as I said, these are early days, we are actually doing a lot of work. through the Federal Reserve System to understand this emerging risk. Thank you, Mr. President, thank you for being here. I think he's doing a great job. Kenny, thank you, thank you mr. our labor force participation rate is much better, but compared to other OECD countries we are lagging behind, why that is a big question, so it is a combination of things, there is no doubt that the educational level in the United States United, which was once the highest, has actually fallen relatively.

For our peers and particularly among low- and middle-income people, the level of educational attainment has really plateaued and that is the key to staying in the labor market. What else? I would say the opioid crisis is not helping. I would say let's say that if you think about globalization and technology and it probably benefits people who are relatively highly educated and it doesn't benefit people and, for example, in the manufacturing industry, then you think about what has happened to the base manufacturing in many countries, many of those jobs have been automated or moved abroad. The manufacturing we have now is very efficient and doesn't use as many people.

What else hmm, did trade have an impact? Sorry trade, yes Sheriff, well I would say trade tariffs are welcome during this period. we've had declining tariffs since World War II and lately here and we've had increasing labor force participation here because of this underlying strengthens the richness of our social programs plays a role it's very difficult to make that connection I'll tell you why if Look in real terms adjusted to inflation the benefits that people obtain; In reality, they have declined over this period. Of the decline in labor force participation they have not increased in real terms, so it is no better or more comfortable to be poor and in terms of public benefits it is now worse than it was. , it seems like that to me and there will be a question here.

I promise it seems like I know that sometimes you never get something that's right. It seems to me that any impartial person would have to conclude that our economy is better. I'm biased of course but I think the tax cuts and the Jobs Act worked and we have seen wage increases including but not limited to the bottom quartile and we have seen unemployment decline but we still have a problem in America and a lot of anger and I believe that the path is the opinion of one person, but the root of many. The reason for that anger is that we still have too many people in this country who do not participate in the great wealth of this country, economically, socially, or culturally.

I think Sanders supporters and Trump supporters have more in common than they realize. The American Dream has become the American game for them and they think it's settled, the management elites are doing well, but I'm talking about everyday people, what role, if any role, do you think management should play? Federal Reserve to help us address that first? I think there's a lot in what you said that the most important thing we can do is take your order seriously to achieve maximum employment, maximum employment, that's what the law says and that's what we're doing, we're using our tools to Keep an eye on maximum employment and I think there is no reason why the current situation of low unemployment, rising wages, high job creation, there is no reason why it cannot continue.

In reality, there is nothing in this economy that is unbalanced or unbalanced. that's the main thing we can do, we do other things that are call type things, you know, in our, we do a lot of research in your state and in others, the Federal Reserve Bank will have an operation where they're trying to gather resources around issues of education and poverty and things like that in poor communities, but we know we're not giving, we don't have the ability to spend money on it, we just get it, we bring people in the community together around a table and try to organize things that help the community like you, as I'm sure you know, so it's not something we can do much more than research and do our work on monetary policy.

Thank you sir, have another ten seconds, sir. President I was distracted because you were talking stay independent I think you are doing a great job and all of us in politics are going to give you a lot of advice but call it what you see it Thank you Senator Cortez Masto Thank you President Pao it is great to see you again, thank you very much for being here and always be responsive, let me continue this line of discussion about maximum employment and I really appreciate the conversation that you continue to talk about a level of educational attainment that is so important, what do you define? like that education, what is it when you talk about that, what does that mean?

Anything that gives you skills that would work in the workplace that might include internships that might include the kind of training that people are getting now coming out straight. from high school to a program, it's not meant to be limited to college as such or getting a liberal arts degree, it's actually about the acquisition of skills in society, so do you think we've changed in society? It is now very difficult to graduate from high school and get a job that pays a decent wage for your family without receiving some additional education. Yeah, it is, I mean, I think you see that largely for people with high school degrees, their income. have stagnated, you know very well for a long time that the economy is what happens with technological changes is that it wants higher and higher levels of skills and if society provides them with those people with those skills, then incomes can increase in everyone areas and inequality can decrease And that was the American story for a long time, but it's not part of that and that's why I'm curious to know what you think about this part that also has to do with wages and rising wages. salaries and the level of salary that you are paying, are you saying that just because you graduate from high school you shouldn't do it and you want that job, whatever job you can do, it should be a minimum wage level that should never increase ?

Even with the profits and productivity that we've seen over the years, no, I'm not saying that at all, that's fine, because I agree with you, because I think there are also people in this country and I'm very happy with a high unemployment. rate, but I also think they live in my state and they have two jobs, they actually have two jobs because the wages are very low and I think there's a disparity where we have to do a better job of understanding what I was looking for. through the monetary report that you provided and I'm curious if it identifies that because I didn't see it here, but does it identify people who actually have two jobs?

Those are identified in data collected by the Labor Office. Statistics, yes, and we, and that's what they use here, is the data that they can provide us that gives us a better understanding of how many Americans across this country actually work two jobs, again at a very high level in this moment, yes, and that's what ILook, I think that would be helpful as we work with you in the future. Allow me just one last question because I know that the votes have already been called. You note in your opening remarks that there are concerning disparities in the labor market between racial and ethnic groups and between regions of the country, can you go into more detail with that statement?

Of course, I think we and we had a box in our monetary policy report, I think a year ago, about the rural and urban disparities that are getting wider and wider. I talked about what might be causing that and you know there's really a long-term trend that is challenging for people in rural areas in terms of racial and ethnic disparities. I mean, the African American unemployment rate is about double that. that of the overall unemployment rate and you know you see different groups, so it's concerning that these things persist in this way, we don't have the ability to operate directly on that other than again carrying out our maximum employment mandate. and stable prices, but as you study it, what do you find?

Why does this disparity exist? What can you point out? What would be the racial disparity that you just talked about? You know, I think it's tied to the history of our country. history and you know there are higher levels of poverty in the African American community, as you know, and that is because of our history, but we would like to see those gaps decrease more that they are not tools that we have tools that you have to have, but there are no nothing and what I'm looking for is the data, there is no set of data or data points that they are collecting that will help us identify that racial disparity, why it is happening and how we can address it, oh, there is a ton of research on it.

Could we be happy that you have access to perfect insurance? Thats what Im looking for. Thank you, Senator Tillis. Thank you Chairman Powell. Welcome back. Thank you for the good work you are doing in your lane. I have a There are a couple of questions, the first one I want to talk about we've seen particularly at the FDIC, we've seen a real stepped up effort to look at guidance and other actions aside from a rule promulgated by the APA to rethink and review. or rescind, can you give me an idea of ​​how that is happening at the Fed?

So you know we've said frankly that the guidance is not a rule, the guidance is not binding, it is not the basis for enforcement actions and things like that, and we. We've made it very clear to our supervisors, so I think we are and you may have seen Vice President Quarles' speech where he addressed some of these issues, so we're working on that as well, if we dig deeper, I know. you are aware of Gao's ruling on Lisak, there is a lot of talk here. I agree with the discussion that everyone should remain independent, but there is something that concerns me that came up after they received the news from the GAO or OMB and it relates to, I believe, a letter that their general counsel wrote in June of the year past and what I have in front of me now says that it continues to evaluate the scope of the Federal Reserve's obligation to send out supervisory guidance documents. to Congress under the CRA, does that mean you are exempt from that oversight?

So the question is whether we are required to send guidance. We sent out some guidance and again this is other than Vice President Quarles, so what is the composition? the list is consulted by the GAO, so when Lincoln puts it on the list, we won't, I think we're going to articulate clear standards for what companies should be, unless, in fact, we do. VP Quarles already laid out an approach that I think makes a lot of sense and is listed for US g-sibs and we really tried to tie that whole approach more into the tailoring categories that we've established now for the Another CRA is the Community Reinvestment Act.

I have a question: You know, rumors swirl around this building, probably the same way they do, and the Federal Reserve and the entire government, so the question I have is does it relate to the feds' plans to join . with the FDIC and OCC on regulation, some have said that you have given assurances to Waters that without Governor Brainard's support he would not join that, that is just a rumor or an assurance that you have given him the Waters presidency. That's not how we're looking at it, what we're doing is trying to develop, we developed our own thinking on CRA reform, just like the OCC did, they took a lot of our ideas, but in the end we did it.

I can't be on the same page. I feel very comfortable with where we are now. What would be the rational basis for two standards? Anyway, it will be two standards. Under the FDIC OCC proposal, about seventy percent of its institutions will be able to. opt out of that standard, so there will be the existing standard and then there will be the new standard, assuming they go ahead with it, so there will be two systems and we will be if we do. I don't do anything that's like 70% of the institutions they supervise. His vice president is fighting over this.

He is he. For this reason, he is just a witness. within all of our lanes on the board, we will all have to vote on this, this has actually always been handled by a different group which is DC CA, which Governor Brainard chaired and I asked him to take the lead on this, but ultimately Ultimately, everything boils down. I feel very comfortable with where we are on this. Thank you. I was going to ask some questions similar to those of a Senator Toomey. I won't do it about the unfed now, but I will, so I'm just going to go.

To submit some questions for the record that are basically about the mechanics of the Fed's current implementation, five simple questions. Thank you. Hello, Mr. Tillis Senator Jones Thank you mr. Chairman Chairman Powell, thank you for being here, let me echo other colleagues on both sides of the aisle regarding the independence of the Federal Reserve. I agree that it is extremely important that we maintain that we have independence when I ask you a little bit about home ownership. Following a little bit from what Senator Kennedy was talking about about the wealth gaps among so many Americans, it appears that homeownership across the country is relatively stable, but there are also massive disparities in homeownership by age, by race, by ethnicity.

The African American homeownership rate fell to 50%. The year's low in 2016, of just forty-one point seven percent, is still about 30 points below white homeownership. Similarly, the Hispanic homeownership rate is only forty-eight percent again, well below the white or average homeownership rate. Millennials are less likely to own a home by age 34 than their parents or grandparents and I am concerned that if the trends continue and by this I mean to some extent we have relatively their wages are increasing but they have not been increasing as fast How we would like home ownership costs to be increasing at a greater rate. rate, so I'm concerned that if these trends continue, a growing number of Americans will simply be locked out of homeownership, so my question is what are the economic consequences in terms of wealth creation for minorities and for a broader economy by leaving this disparity. in the area of ​​homeownership and do you have any suggestions for how we in Congress or the Federal Reserve can address the issue of homeownership?

Let me say first that I agree with you that there are pressures on affordability that are widespread and that have to do with the difficulty in getting land ownership and the difficulty in acquiring workers and fair costs regulatory costs materials costs are really putting pressure on house prices, upward pressure and, as I said, it's pretty widespread across the country, you know, in terms of the level of home ownership, I think we don't want to go back to a situation where we push the idea of ​​home ownership beyond what is financially sustainable for people and we sort of did that in the pre-crisis era, so and so, what has happened?

It's that credit is now much less available to people without impeccable credit histories and that's a lot of what's behind some of the data that you cited and I think it's a good question for us to ask. So far I don't have the opinion of that we have, but I think it's a good question to ask about it and make sure that the people who should have access to credit and who can handle loans of that size get it. It seems I know Senator Cortés Master who asked me: I would like to get some of that same information on racial disparities because I suppose there is some connection to that in economics and let me in the little time I have.

We are left to go back to the rate, the lowest rate of forced work or participation, how can we just encourage that? How can we get more engagement and increase those numbers? What can we do? What, if anything, can you do to try to attract more people? In that very good market participation, what we can do is continue to use our tool to support a strong labor market and it's very good to see those participation rates increase to levels that people didn't have, I mean, economists didn't. I think we would see those levels again and we are seeing them, which is a really positive thing, but that's something that you know, in the long term, that's not really a strategy, you know, we need policies that, ultimately, the people have. have skills and abilities that will keep them in the workforce and ways of knowing how they can participate in the workforce and I think that's where other government policies come into effect and you need a lot of education and training and and also policies that support the link to the workforce, you know, there are many things we can do, we will be happy to sit down with you and talk about it, but it is important that other countries that have surpassed us do it.

More of that kind of stuff and I've also been more educated, which I think all of those things will be a big help. Thanks for that and I look forward to a little discussion on that. Thank you, Mr. President, I will turn my back. Thank you, Senator McNally. Thank you, mr. president president paul on february 2 the american banker published an article titled when a small town loses its only bank. The article mentions Duncan Arizona, which had only one bank and recently closed its doors. Duncan residents are now forced to drive approximately 40 miles to do any banking business, local businesses no longer have a place to deposit, make daily deposits or receive change and any customer service issues require driving long distances, the article says the economic implications are enough of a concern that the Federal Reserve has been studying what's happening. in areas where residents no longer have access to a local branch, then my first question is what the Fed learned in that study and why do you think this is happening;

It's not just happening in Duncan, Arizona, but throughout rural Arizona in rural America. we did we didn't publish to publish this study as you mentioned, we had meetings around the country and we did research and I think we found that the loss of a branch, particularly in these rural communities, can be a hard blow. it's the availability of financial services, but it's also a bank that is an important civic citizen and contributes in many ways to doing that in that city and, in fact, I think Duncan was. I think we had an event in Duncan. I think it was one. from our events now that I think about it, we learned that and you see it happening.

Bank branches are falling, they have been reduced in several jurisdictions, but you see it more in rural areas and also with people who are in rural areas. Areas are more likely to be more inclined to use a bank branch rather than electron. Thanks, the effects are really significant, so we looked at it and it's a pretty negative effect, so how do you know this? You know these are banking deserts, how does the Federal Reserve do it? Define a banking desert, is it just about the geographical distance you need to travel or the number of customers or any other economic statistics for this?

You are absolutely right, you are well aware that more people in urban areas may be using online banking. Rural areas have two. One of the challenges is that they are possibly less inclined to do something that is not part of the culture, but we also have connectivity challenges without rural broadband, so those two things hurt rural communities even more, so how Do you define banking deserts and what more can be done to address this issue so that there really isn't an accepted definition, but I think it's one of those things that you know when you see it, so it's a place where peopledoes not have access to basic banking services.

Duncan would be a classic example, the fact that you would have to drive 40 miles to get there, it's a banking desert. It turns out, by the way, a lot of these banking deserts are actually in the high desert, so it's another setup, but you know, it's a real problem in rural America primarily, do you have any ideas, I mean , within your role and ours, about how we can address this issue there so that we know we can't be in the business of ultimately telling banks that you know we can't close branches, but we can find incentives for them to support rural areas and the CRA is a reform of the CRA, perhaps a vehicle for that, where we can move Sierra, this is a constructive aspect of the other agencies' proposal that is moving to support. more CRA nature activity in rural areas, so that's an idea, that's a challenge, although you know, for quite some time now people have been leaving rural areas and moving to cities, so these are demographic pressures to long term.

Excellent thanks. Thank you. I hope to continue with you. Talk more about how to do it. Thank you. I also want to touch on the topic of labor force participation and wage growth in particular. I know a lot of members have already asked you about it, but it's really cool. seeing so many Americans and Arizonans get off the bench and back into the workforce and we're starting to see wages rise as well, especially at the lower end of the economic spectrum. Can you touch on the topic a little more? dynamic where you're seeing the positive nature of that and you know where you're seeing people coming off the bench and how the pay increases are impacting, so it's a combination of people who just don't leave as much and people who in they actually come back like You may have seen how unusual that at this point most of the people who were naked and who are newly employed are not coming off unemployment, they are coming from outside the workforce, so we split them up, we split everyone up into different categories so that the largest flow is What I think for now is from out of the labor force into employment, which is clearly a sign of relatively low unemployment.

There are simply fewer people unemployed, but there are also people who are out of the labor force who have job opportunities. So that's very positive, I mean, one thing is we didn't expect this, it's very positive and we just want to do everything we can to continue to encourage this trend because if you know, there's nothing like a job to improve the lives of people. well and get them on the right path, so it's very good to see this and we know that we are using our tools to make sure that we can foster that great gratitude.

I'm in a moment. Thank you, mr. President Senator Van Hollen Thank you Mr. president and thank you mr. President and like my colleagues, I want to thank you for your accessibility and I always appreciate the opportunity to have a fact-based conversation here before you answer some of my questions. I just want to thank you and the Federal Reserve for advancing the Fed Now system. I believe it will save billions of dollars for millions of Americans when implemented. Now we passed a huge tax cut in December 2017, it dramatically increased annual deficits and long-term debt and at that time, in December 2017, this is what President Trump tweeted.

He said that with his tax cuts we are going to shock the economy to growth rates of 4%, 5% and maybe even 6%. President, the economy has not achieved growth close to 6% in the last three years, has it not? We've had continued moderate growth of a little better than 2%, right, and we haven't had 5 percent or 4 percent growth. and in fact, the Trump administration has never achieved 3% annual growth, which is why 2018 was marked at 3% but then especially reduced: you never know, maybe you will get more, but we are having a conversation based on the reality, so the answer is no, it has not reached 3%, that is the case according to current statistics and if we look at the budget that the Trump administration has just presented, they are predicting a growth of 2.8 percent for the next year again with a big difference.

From what President Trump was talking about, four five six percent, but even at that number 2.8 percent, that's higher than the most optimistic projections for

2020

GDP from the 17 members of the FOMC, so no. We have a you know, a unified. forecast we don't adopt or vote on a forecast, but we do show a dot plot of the mortgage foreclosures data and I think the median forecast would be at the two lows of 4 FOMC participants for this year, yeah if I look at the median forecast , is actually 2% and the maximum, the most optimistic bullish was 2.3 percent, still half a percent of GDP below the president's projections, so now let me turn not from the aggregate numbers but to the real wages because there's been a lot of commotion lately, but I think I want to get a sense of where people are really at and obviously it's good news that the unemployment numbers have continued to decline on the trajectory they were on when President Trump was sworn in, but if we really look at the real calm, the real compensation and the compensation, I remember.

According to a previous audience, his opinion is that the CCI employment cost index is probably the best compensation sure man, it's like that, in a sense, they all have their little virtues, although it's great, that's how it is, so, just . He was noting that numbers and compensation grew an average of 0.94 percent per year during President Obama's second term and that compares to 0.6 3% per year. These are inflation-adjusted terms of 0.63 percent compensation growth under President Trump, so in The fact that the actual compensation workers in the workforce receive was actually higher over the last Obama's tenure compared to now, is this a reflection of how difficult it has been to translate overall economic growth into higher real wages for Americans?

Yes, it is, I mean, in part. The really important thing about that is that inflation has gone back up a little bit, which is something we've actually been trying to achieve, but I think more broadly, wages have gone up from about two percent to about three percent. hundred now and you would see it if you look. In other expansions, even adjusting for productivity, they would have been expected to go up more, so it's a little surprising that we haven't seen real unit labor costs go up, that is, that people were pays more than productivity and inflation. in what should be a tight labor market, but it's not exactly showing up that tight on wages and you say inflation you know has increased and that was the intention, but of course when it comes to the real purchasing power of Americans, that is what they care about if their salaries can, yes, buy, make purchases, we don't have time to get into that, but the budget just appeared here.

The

chairman

of the Senate Budget Committee has announced that he does not want to have a hearing on the budget. I hope so. You'll change your mind, but a lot of the cuts that were made there include cuts to student loan opportunities and some of the things that you mentioned that could actually lead to a better economy program, so I'll follow up with some written questions about that. thank you thank you senator cotton thank you mr. President for joining us again. I want to talk today about the coronavirus and its potential impact on the US and the global economy.

Yesterday Senator Menéndez, I and a couple of other senators presented a resolution in honor of Dr. Li Wen Lange, a Chinese doctor who died last week from coronavirus. What makes him unusually notable among the more than a thousand victims of the corona virus is that he was one of the first people to report the Wu Hen coronavirus in early December, he was silenced by the Chinese Communist Party, in fact, he was summoned in the dead of the night and they forced him to sign a statement denouncing their warnings and unfortunately he contracted it and died leaving behind, as I understand it, a wife, a small child, another child on the way, another example of this type of practice that I want to cite is the Chinese lawyer and journalists Chen cui the effects. of this outbreak, obviously, that has the biggest impact on our ability to understand the virus and develop effective vaccine forest testing, but what kind of effects does that have on you and the feds' ability to try to understand the impact economical to deal with such non-transparent conditions? coming out of Beijing as you understand what the possible impact could be for China, for the United States and for the global economy, the real question for the Federal Reserve is what is the likely effect on the US economy and I think that we will see it, we will start to see it in the economic data that will be released fairly soon and we don't know, it's too uncertain to even speculate on what the level of that will be and whether it will be persistent or whether it will lead to a material change in the outlook, but we hope let there be some.

Some effects should be substantial in China, significant but perhaps less substantial in its immediate trade partners and we will know that we will be looking at the economic data and I can't really comment on the other types of data that we are looking at, very nice and not of course. You wouldn't expect the Fed to get that from HHS and the CDC and other agencies like that, they are Chinese economic or central bank officials in contact with the Fed or their other counterparts around the world to try to help you and your counterparts. to understand what economic impact, although I recognize the dishonesty and lack of transparency of health officials and political leaders.

I am absolutely sure that will be the case. I know there have been some conversations, but I think it's too early to say. I don't think so. you really know, I think their focus now is the big focus on containing the outbreak and of course the central bank and the government itself have been the rest of the government that has been taking a lot of measures to support economic activity, I think that also. Certainly, the more they know, the more they will know: of course, we have that kind of relationship with their central bank. Okay, I want to congratulate the Trump administration for taking action of the magnitude a couple of weeks ago to stop travel. from China and the other steps they've taken in terms of contact tracing and trying to get testing kits to the front lines, so right now, as of this morning, I think we only have 13 confirmed cases in the United States.

I think we are I will be sure there is more than that, but I hope there are not many more if that remains the case, if there is not a widespread outbreak in the United States due to the actions that the United States government took, it is the main economic risk for the United States, fragility. of supply chains that originated in China and what happens at the beginning of those chains in factories that may not have enough or any workers. You're right, some supply chains are an important issue. We get a lot, we import a lot of type. of intermediate goods from China and final goods, and that will be a problem, it will also be our own exports there, of course, they will be suppressed during this period, we will not receive as much Chinese tourism and then the other channel.

I would mention that the financial markets are the ones that can create their own transmission to the economy to the extent that there are really strong reactions in the financial markets, so we will look at all of that and again we hope to start picking it up relatively soon, okay. Thank you mr. President, of course, by far the top priority of our government should be the health and safety of our people, but we do not want to lose sight of the potential economic damage to the well-being of our people in prosperity, so I appreciate your attention in This important issue, Senator Menéndez, thank you.

Thank you, Mr. President for your service, let me ask you something: The Northeast Corridor, where I come from, in the Jersey region of New York, generates about twenty percent of the entire nation's GDP if we had a major infrastructure failure, for example, the closure of one or both of the Hudson Tunnels into New York City at the end of the Portal Bridge, which is the axis linking Boston to Washington along the Northeast Corridor, that would not create a significant economic risk if maintained . Yeah, I mean, you're talking about I held the closure on that. That could say that things happen and then we fix them and they don't reflect much in the GDP, but if they stick, then yeah, well, let me share with you something that I'd like to bring to your attention as you watch. analyzethese issues and track estimates that a closure of the Northeast Corridor for a single day, for a single day, talking about sustained problems would cost our economy a hundred million dollars again, that's just in one day, so if we can't get this infrastructure to finally hold up when we saw through Superstorm Sandy the tremendous damage to the Trans Hudson tunnels, both of which are a century old, we have a century-old bridge that doesn't close properly and that stops everything. traffic along the Northeast Corridor, so every lawyer is a medical patient, ooh every companies that run intercity train trips from Boston to Washington stop and waste time and if it can't be closed successfully, they use sledgehammers to close it, which has a significant economic impact and I urge the Federal Reserve to consider that as a question. about our infrastructure needs, that's why I'm so frustrated that the administration doesn't see the importance of what we call the Gateway project to the new Trans Hudson tunnels, the rebuilding of the one hundred and nine year old Portal Bridge, we just got some good news to the respect, but Overall, this is a project of national importance in a region of the country that generates 20% of GDP for which intercity rail traffic is incredibly important.

Let me turn to the Community Reinvestment Act, which I believe is an essential tool as one of the minority members on this committee and in the Senate against discrimination on limiting redlining to meet the needs of low-income families and moderate; However, instead of strengthening this important civil rights law, the OCC and FDIC published a proposed rule that relies heavily on a dollar ratio metric to measure all of the bank's CRA activities and gives little value to the contributions of the community Mr. President, why is it important that an updated CRA rule focus on loan counts instead of just dollar value?

In our view, loan counts are important because they serve the very purpose of the statute, which is to ensure the provision of credit to low- and moderate-income persons. income and their communities, so we believe loan counts are an important aspect. Indeed, do you agree with Governor Brainard that focusing on long-term value, as the updated OCC and FDIC proposal does, risks encouraging some institutions to live up to expectations? mainly through some large Community Development loans or investments rather than meeting local needs. I think it's a risk and you know, really, as you know, we worked, we worked to try to fully align with the proposal that we couldn't achieve.

We can't come up with our proposal either, so we'll keep an eye on comments on all those provisions to come and look at them carefully as we think. However, when you said that, did you share the reservations? shares his concerns about emphasizing metrics that place too much value on loan volumes and not community input. Yes, we share all of our work and we try and they took a lot of our ideas because of the way they incorporate a lot of our ideas, so they think yes, but they will send us what particular elements were incorporated that you shared with them.

Sure they have and they know that comptroller ah ting has identified many of them in his

testimony

at the house a couple of weeks ago as ideas they had incorporated from work, but key concerns seem to have been ignored, particularly the one I think that your proposal considers both counts and ten dollars, so But there are a number of differences and so one last question on this is whether you or Governor Brainard have brought the CRA proposal to the federal reserve board , but no, we haven't, really our focus was on trying to We side with a proposal with the OCC and the FDIC and now we see ourselves waiting to learn more from that process.

Well, for those communities of color, this is vitally important and I hope that the Federal Reserve will demonstrate leadership in this regard and make sure that community participation remains a hallmark of what the CRA is, thank you and with that The questions conclude, although I'll come back and ask a quick question, it wasn't on my list to start with you. I have been asked a lot, Mr. president today on wages, I just want to ask, I just want to check with you on a statistic that I'm familiar with and I understand that wage growth was 3.1 percent last year, which is the average hourly wage for the twelve months which ended on December 31 and that made 18 consecutive months in which the wage rate was above 3% the rate of wage growth.

I have to check it certainly sets you back, well you're not really looking at it every month, you're looking at it for the last three levels. point one percent higher, we could check that sounds good, although that sounds good, yes, I think so, well, if they checked the facts, that would be enough and they would let me know. I would appreciate it, that now concludes the questioning and for those senators who wish to submit questions for the record, those questions must be submitted to the committee by Wednesday, February 19, President Powell, we ask that you respond to those questions as soon as possible, again we thank you for to be here.

You are late for a vote and I am sure you have other matters to address, so this committee is adjourned. Thank you, Mr. President