We are supposed hold back on that final decision and listen carefully to each others views, all the governors. Thats how we do it out of respect for each other. I think the case for raising Interest Rates at our next meeting is coming together. Senator heller you anticipate we will be raising rates in december . Jerome powell to repeat myself, im not going to give you a specific answer on december. Senator heller thats why i asked the question again. Jerome powell the conditions are supportive of doing that and we need to have the meeting and listen to each other. It we are not supposed to be saying exactly what we are going to do before we listen to one another. Thank you for being here and thank you for taking the time. Senator warren the on your nomination. Before the crisis, the fed had a lot of authority to regulate and supervise the biggest banks, but they failed to use that authority. When times were good, it looked like we did not need strong rules during when things went south, the feds failure to what strong rules in place ended up costing millions of people their jobs, their homes, and their savings. Under chair yellen from the last four years, the fed has adopted a number of rules to cut the risk. You have supported those rules. I understand that now, if you are confirmed, you will take another look at those rules. In your written testimony, you say you will. Usequote you to use Regulatory Burden. You specifically say you will roll the to rule rules back. Are there any you think should be stronger . Jerome powell yes. If you look of the four pillars,s, the reform they could be made more efficient. There are a number of things i wouldnt roll back. Senator warren what would you make stronger . Jerome powell i think about the resolution, we expect firms to make progress on stress testing. Senator warren you would want to see living wills . Jerome powell im not thinking about more aggressive rules than our expectations. Revisitwarren, if you the rules, the question im asking is the reverse. I dont want to see a oneway street where its about rolling back rules and not considering places where they need to be stronger. Jerome powell i get your question. There are a lot of problems we need to address in the Banking System. We have had eight years of writing new rules. I cant think of a place where we are lacking in an important rule. I think we filled out the rules we need and its now about dealing with things from a supervisory position. you haverren been there for five years. You dont think a single one should be made tougher . Jerome powell i think they are tough enough area senator warren this worries me. Let me take a look at the rules you want to roll back red the fed and other agencies finalized the volcker rule with your support. It prohibits banks from trading on their own account unless it is related to customer service. This addresses one of the ways banks got into trouble during the build up to the crisis. Do you support significant changes in the volcker rule that apply to big tanks, for example by exempting forms of trading . Jerome powell i do support a rewrite to the volcker rule. I do believe we can do that in a way that is faithful to the language and the intent of the rule. Senator warren you would favor exempting more trading . Jerome powell i would favor tailoring the application. Senator warren my time is nearly up. I am going to follow up with questions of the record. Concerned that you believe the biggest regulatory problem in the country right now is the rules are too hard on wall street banks. That kind of mindset led the fed to ignore the Financial System risks before 2008. It helped lead to the financial crisis, and it helped lead to the recession that followed it did i am worried that we not go down this path again. If we do, its going to be the same thing. Millions of families are going to pay the price while the banks and up once again getting bailed out and with record profits. I will submit additional questions for the record, mr. Chairman. Thank you. 15 seconds credit, but it only lasts for this hearing. Scott thank you. Thank you, mr. Chairman. Governor, its good to see you again. We have talked about these issues for, i have had some concerns related to past performances. I do want to talk about the Interest Rate environment we have currently. Senator heller asked some specific questions as relates to increasing the Interest Rate in the next meeting. And then paint a story ask a question about the Interest Rate environment overall. If you are a retiree in South Carolina, a great lace to retire, it certainly has high quality of life. There is a good economy, a wonderful place to live. If you are in a fixed income in South Carolina and you are retired, the Interest Rate environment cuts into your ability to live off your interest income. As an example, someone with a interest. Earns. 25 in five years, that is still less than 1 . If your nest day gives half 1 million or 1 million and you are earning 2 , the Significant Impact of the artificially low Interest Rate environment has a negative unintended consequence in the current marketplace. Of arealize the advantage low Interest Rate environment helps spur Economic Activity, people are more likely to buy homes. That cuts both ways. I would love for you to talk about the principles and characteristic seven economy that would require or encourage a more normalization of our Interest Rate environment here in environment. Jerome powell i think we have an economy right now and that is low unemployment, weve got strong growth, the very low settings of Interest Rates that were appropriate during the crisis and after to support Economic Activity are no longer appropriate. Thats why were raising Interest Rates now on a gradual path. I agree as we discussed yesterday or the day before, the Interest Rates are a blunt instrument that we have. Low Interest Rates support Economic Activity, they lower interest bills, they support investment i businesses, it supported a Strong Economy in the labor market. If you are dependent on fixed income and Bank Deposits and Interest Rates, its been a burden for you. I think overwhelmingly, people are helped by Interest Rates. Help is on the way. I do expect the rates will continue to go up and that will feed through the Interest Rates your constituent is having. Senator scott thank you. As it relates to the Balance Sheet of the fed, we have seen that Balance Sheet balloon and we have talked about a new starting place for a conversation about unwinding that Balance Sheet and getting to a number that would be our new normal and not necessarily beforehand, can you walk me through what you see is a snapshot happening with that Balance Sheet . Jerome powell we are allowing as bonds mature, we are allowing them were giving the money back to treasury. The market hasnt reacted to that. On that path in three or four years, we will be down to a new normal. What will that be . It will be smaller than the Balance Sheet of today. It will be bigger than 10 years ago. That level will depend on two things, the public demand for cash, which is a liability, and also on banksdemand for reserves. Demand for cash is doubled in 10 years. Those are the reasons why the Balance Sheet will be bigger. I said earlier, my guess is it will be somewhere in the 3 trillion range. We dont know. Encouragedtt i am by your thoughts on this about taking a look at the asset ofesholds that may be a part the legislative package and looking for ways for us to increase the thresholds that tave stringent prudenc regulations. As we look at the designation in the nonbank arena, in the insurance industry, i would suggest clarity on what get you designated and clarity on how you lose that designation would be important. Jerome powell thank you, senator. thank you for the conversation we had last week. I want to give you some data points. According to the fdic, banks recordbreaking profits in 2016 and the highest return on equity. Banks will likely do even better this year across the board, they have increased dividends to shareholders. Community Bank Earnings have been increasing. They were up 10 this quarter compared to last year. Cardsold credit, credit have surpassed prerecession highs. Loan growth in the commercial sector is due to a lack of demand. The question follows on senator warns question warrens question, what are we seeing with deregulation . Jerome powell im not going to characterize what we are doing is deregulation. We are looking over eight years of what is very innovative regulation in many cases considering it had never been done before. All of this is brandnew. Looking back, we need to make sure that what we did make sense. Senator schatz isnt it important to get these metrics up . Does it make sense to err on the side of caution . Some people believe that too much regulation is a problem and about to be eliminated as an ideological precept. When you look at a practical matter, arent these the data points you want . Arent we where you want to be in terms of Bank Profitability . Isnt profitability not the problem to the extent that there was net income among the 10 Bank Holding Companies in the united income 99 of their net was distributed in the form of dividends and stock buybacks . What are we fixing, and for whom . Jerome powell the Banking System is helping healthy. It is nice to see banks profitably serving their customers again. Were not looking to change that. I would also agree to we want to air on the side of caution, we think we are doing that here it that. Consistent with that, it doesnt help anyone for banks to waste money, to spend more money than they need to spend, to accomplish the objectives. Those costs will fall on customers and borrowers did it is our obligation among other obligations to make sure regulation is efficient. Senator schatz you are saying its too much paperwork . Jerome powell yes. You hear that a lot from different issues. There is certainly a lot of Regulatory Burden and a certain amount of it is unavoidable. Our job is to be efficient and effective as well as protecting. Senator schatz if you are a bank and you want to make profits, you want to reduce the paperwork burden. No doubt when you lay down a new regulation, there are going to be instances where its a pain for a bank, small or large, to comply. Again, they have managed record profitability despite whatever compliance earnings there may be , and there is zero evidence that if we reduce the paperwork heard and or the compliance burden that they will pass on those savings in the form of increased lending or increased money to their customers. I only have 50 seconds left. I want to followup on a question i asked you in private. When the fed formulates Monetary Policy, it takes a broad look at the economy and identifies risks. I have a copy of minutes from the most recent meeting. There is a discussion of the. Conomic impact of hurricanes in the past, these of had a temporary impact. Have had a temporary impact. To many events would it take have a Material Impact on the economy . Have you thought about how many that would be for the total cost of the damage . Have you worked with science agencies about the likelihood of the number of Severe Weather events increasing . I understand this is difficult to quantify, but you are the business of analyzing things that are difficult to quantify. I think this is material and i would like you to consider it. Ome powell senator tillis thank you for being so generous with your time in the meetings you have had in my office. I covered some of this in the meeting we had in my office. I want to go back to it again. Youve been nominated to a position where you are going to be ready corals boss. Randy quarrels boss. You are going to rely on him to look at reform issues. In the first meeting any loss has with somebody, they try to give them direction. What you going to talk about when it comes to recalibration post crisis . I am curious about the committee. , awe could start with that general discussion about how its not about repealing regulations, some of them need to exist. Now its almost as if we have too many people regulating the same regulations or too many organizations. We are not clean and our execution, which is making it difficult for businesses and distracting from what they want to do. Thats a compound question. Jerome powell let me just start by saying my relationship with randy goes back so far i can imagine what a first meeting would be like. I hired him 25 years ago. We are very well aligned on our approach to the issues. Committee,bout the my understanding is he has the lead on this now. My understanding is there is progress toward an agreement among all of the principal thee around principles around the categories that would give us a way to wrap up. That would be in our interest to do so. Other countries have lower floors and risk. That really helps us. Senator i just came from a meeting that promotes the tax plan. In my own personal experience, the two things that combine for great Economic Activity or tax reform and regulatory reform. Im hopeful over the course of lane, youwithin your are doing everything you can to question how regulations get executed and the minimum lightest touch necessary so we are reducing increasing cost with regulatory compliance. With all due respect to my colleagues at price waterhouse, many of those are nonproductive jobs. If it waso is count cross tied right. Hopefully we can see your leadership about more clarity. The more tip of the spear regulators staying in their lanes to the extent they need the information to complete their responsibilities, i have a question about the last nine years. What has a more corrosive impact on the middle class, low inflation or low growth . Jerome powell low growth. Senator outside of what you are responsible for, what should we be looking at the help stimulate growth . Jerome powell let me just amplify our mandate, its inflation and maximum employment. Its not growth area growth. What can make growth stable are the things in your lane. I would boil that down to a couple of things. And ororce participation activity area productivity. You want as many people as possible taking part in the labor force. Its for their own good. People are happier and healthier if they are in the labor force. Productivity is very difficult to forecast. It comes down to technological advances and the effect. The skills and aptitudes that our labor force brings to the thatthat is something affects policy. I think all of those policies are in the hands of congress, its important that we have a long run focus on increasing our Sustainable Growth rate here it rate. Reduce theyou regulation, will there be more productivity . Jerome powell there are more ways to support activity and investment is one of those. Hollen thank you mr. Chairman. Powell,lations, esther on your nomination. Both your immediate predecessors at the fed, they repeatedly testified before congressional concernes about their about the impact of the rising debt. Bernankehat chairman told the committee in june of 2012. He said large deficits and debt over long periods of time raise Interest Rates above where they would be and crowd out private investment. They also may involve borrowing from foreign lenders, which is a drain on the u. S. Income. Do you agree with that statement . Jerome powell yes i do. Whator van hollen this is chair yellen said this year, expressing her concerns about rising debt. She said current spending will lead to a unsustainable debt situation, with rising Interest Rates and declining investment in the United States that will harm productivity growth and living standards. Do you agree . Jerome powell i do. Hollen if we increased the national debt, we will make those problems even worse. The longterm debt impact harms Economic Growth. Jerome powell i think the idea would be to get gdp growing faster than the debt over a long amount of time. Hollen you have any reason to doubt the cbo analysis of the debt increase that would result from the bill that has been proposed in the senate by republican senators . Jerome powell i have not looked at that. Its not something we are responsible for. Hollen, you have no reason to doubt those numbers . Jerome powell i have no reason to know those numbers. Senator van hollen you have a concern about the debt in respect to the economy . Jerome powell its a fine line that we have to walk on this. I hope i can walk it. Clearly, the debt needs to be on a sustainable path and we all know that and we agree on that. Its not for us to be taking part in the discussion that you and your colleagues are having over this. It is not our role. There are agencies who have that role, it is not for us. Youror van hollen, predecessors repeated their concern about national debt. You indicated you shared their concern and agreed with their earlier statements. Putting aside whether you think the cbo analysis of 1. 5 trillion in Additional Debt is correct or not, it would make a bad situation worse . Jerome powell it would. Chairmanan hollen as bernanke said a number of years ago, he said at some Point Congress is going to have to make a tradeoff between what its spending programs are and what taxes it is willing to raise. We are now talking about reducing the amount of revenue coming into the treasury. The math remains the same. Jerome powell it does. Senator van hollen if we want to avoid making the debt worse and you are going to add 1. 5 trillion of debt, the only way is to cut things like Social Security and medicare are in medicare. Jerome powell there are a lot of moving pieces. What the country needs is to. Ave the debt growing faster that is what puts us on an unsustainable path. Growth enters into the picture. Senator van hollen they have their own rejections of what the growth path would be. There are things we may or may not be able to do to improve that area there is no credible analysis out there that suggests when you have a massive tax cut primarily going to major corporations that the result is going to be a growth that makes up for the lost revenue in terms of debt. Do you know of any analysis that shows that . Notme powell i am following the analysis. Know ofvan hollen you any credible analysis that says it would pay for itself . Jerome powell i am not an expert on this proposal. Hollen i would urge it to follow the tradition of your predecessors who were very carefully careful not to wait into the specifics of this fiscal decision. I thank you for your testimony. Ter purdue question senator purdue. I am encourage we are having conversation about the debt. Your consideration on that. I would like to remind the years,ee in the last 16 we added 14 trillion to the debt. In that last administration, the lowest Economic Growth in United States history. If we do nothing from today, the government will add 11 trillion to the current debt. The current projection is this government, if it doesnt change the way it does business, we will add 11 trillion to the debt. Break away for a second to bring you up to speed about what happened today across european act of these. The ftse is up 1 . Up 4 . 40 you know which company i am talking about it this is the biggest oil company. It will stop paying dividends for the First Time Since 2015. Lets look at what happening in the currency market. Its quite a day on the data front and you are watching the confirmation of Jerome Powell. The euro is about. 1 . 6 ling is also down by against the dollar. The euro is in the ascendancy against the pound. When it comes to the u. K. Today, the bank of england said it does past stress tests for the first time. The boe increased a key safety measure for the third time. We finish off with bond yields. We will see how they are faring in europe today. Andcan see the u. K. 10 year in italy, its down by a basis point. Lets get back to that confirmation hearing. Senator is there anything about freeing up capital on the private side, that is withheld from being active in the economy. Is that weighing in to the decision . Jerome powell what happens is when we allow a security to roll off, treasury will issue a security in bulk or it the same amount, the debt will remain the same. It will be issued to the public instead of the Balance Sheet. It doesnt add to capital. You point to the other Central Banks and there are big Balance Sheets. They are behind us. Ideally over time, all of our Balance Sheets can strength shrink. They are thee highest they have ever been. Your background and i applaud your ability to deal with that. In the time i got left, i would like to like to talk about block chain technology. This has to do with the cryptocurrencies like bitcoin. Bitcoins market value is a good 500 all but 29 of the s p corporations in america. Andming this continues anding about that bubble, the use of these cryptocurrencies, if that continues to grow, how will that affect your ability to affect results from your Monetary Policy options you have the central bank . Jerome powell in the long long run, cryptocurrencies could matter. They dont really matter today. They are not close to enough volume to matter. Senator perdue that was the problem with the. Com bubble. There were so few entities and so much money chasing it. The growth of that era is much faster than anybody thought at that time. Jerome powell there is no question valuations of gone up in the last year or so. Appropriatew on the valuation. From our standpoint, cryptocurrencies are something we monitor very carefully. Block chain may have something in the wholesale payment of the economy. Senator perdue you are watching what alibaba is doing in asia today relative to block chain . Jerome powell we are watching all of those technologies. That is Something Interesting to do. Senator perdue thank you for be willing being willing to do this. Senator its good to see you again. Thank you for taking the time to be with me. I want to start with something a little different. Reserveeland federal gave a speech earlier this month where she noted more immigration is needed to drive the u. S. Economy and a time when the population is aging and productivity installing. Moreu agree that we need and not less immigration to drive the longterm Economic Growth . Jerome powell as i mentioned earlier, the size of the labor worse is an important determinant of our growth over time. It is slow these days. It is about. 5 . Its a big reason why our economy has slowed down and immigration has been a contributor to that. Immigration is another one of those issues that is not in our lane. Those decisions are for you and your elect and colleagues. Senator weve been talking about growing the economy. I appreciate your comments, that immigration is important to the economy. The president ial search processes, we have seen improvement in the diversity of the boards of directors and their interactions with advocacy groups. What will you do to increase the diversity of the workforce in the reserve system . Jerome powell as i mentioned, im a big supporter of the system and of diversity. I think we make better decisions when we have Diverse Voices around the table. That is something we are very committed to do, both of the board of governors and the reserve banks. That is something i have been involved with in my time there. This is something people have been working on for decades now. You begin to see what works. My view of what works is a lot of private companies have been successful in advancing diversity. What works is a holistic land you stick with over a long time, and its about recruiting and going out of your way to bring people in. Its about giving them paths for success. Its about an overall culture and a company that is focused on diversity and sticks without focus for a long time. That works. Its not something you can do overnight did you mentioned the reserve bank searches, we have a diverse bunch of candidates. Enator it is a change thank you for your comments. Republicans will pass a tax cut will geared to large corporations are in the committee is about to consider legislation to rollback rules for some of the largest banks. What can you do with the fed to ensure this deregulation actually benefits workers and does not translate into more executive offices and stock buyback . Jerome powell our tools are what they are. Policy, whichry can shove the economy in the direction of stable prices and maximum employment. We have regulations that can provide sound this. When institutions become more profitable, some of that is going to go to shareholders and some is going to go to customers and some to employees. We dont have tools that affect the distribution of profits. Have consumero protection. You do have a concern about the workforce and growing the workforce. Part of the concern that i am hearing, and i havent heard a lot about this discussion, what would you do to address those Consumer Protection issues, particularly the workers and the workforce. Jerome powell we havent talked much about Consumer Protection. We have been assigned an Important Role and we take it seriously. To the budgets, that Consumer Protection will have the resources it needs to do its job. We will try to do it well and aggressively. That is my undertaking. Senator i know my time is running out and i will submit the rest of my questions to the record. Like many of my colleagues, i do have concerns. Doddfrank was therefore a reason. We had a horrific crisis. The deregulation of doddfrank and many of these regulations that protect individual consumers are so important. I am concerned about rolling back regulations that will open that door and lesson Consumer Protections and work that we have done, particularly in nevada to protect individuals. I look forward to having further conversations with you in terms of regulating tailoring regulations. Congratulations, i look forward to voting for you and helping you in any way i can. It will not be long. You will be over at the fed as the chairman and you will have a full complement over there. You will put your stamp on the fed. Weve talked about a lot of things here. I want to get back to basic inflation. Important,lity is so one of your mandates. A lot of economists are puzzled by the outlook of inflation statistics. There is not real pressure on wages. I dont see a lot of pressure from energy costs. We are in a different economy then some of us grew up in. Thingse globalization of fact thatded to the you have an open market meeting soon. You could bump up the Interest Rates some. I hope you will not spook the bond markets. Certainty is important in the economy, predictability. Inflation . U see i dont see the psychology of inflation out there . What do you see their that maybe we dont that you can tell us about . Inflation has been below our 2 objective. Every single month or every single month but one sense may 2012. It has been in the range of 1. 5 . It is really important that we achieve our 2 target. Our credibility is important on that front area front. Lately, inflation was moving up. Growth, we stronger have a healthy labor market, but to our surprise, inflation readings are week. That was a surprise. The question is why. Idiosyncratic factors like the ones you hear about, there was a big drop in pricing for mobile Telephone Services because of a price war. ,harmaceutical prices underlying inflation moves changing to slowly trends. There are some factors that move around a lot. There are different views. We have been very public about this debate weve been having. Is, are there more fundamental things at work here . We are watching carefully to see. We will have to be guided either data as they come in. Senator we dont really know yet, do we . Is a larger trend . Jerome powell we will be watching it. That will dictate our policy. We can go more slowly if we think inflation will be lower than we thought. Senator its talk about the Balance Sheet. I think you are on the right trajectory. I think use the term you might draw the Balance Sheet down to 3. 5 trillion. Is that the new norm . That was not the norm. That is a high threshold. Drawid drive down, it down, if you had drastic things to do . Jerome powell we dont only know with any certainty what the new normal will be. My own guess will be and this depends on a number of things, in the range of 2. 5 trillion to 3 trillion. Ultimately, what will dictate the Balance Sheet will be the publics demand for our liabilities, particularly cash, which has been growing quickly in a world where everybody seems to use electronic cash. People like paper cash a lot. Reserves will be higher because requirements were banks to hold liquid assets is our reserve. Somewhere in that range might be the answer. It might be higher or lower. Senator the other mandate you are involved in is regulatory. Comeportant when you through the fed or the fdic with a regulation or proposes regulation that they have some type of serious costbenefit analysis before they implement the regulatory change . We always try to implement the laws that you pass, we turn them into regulations and we try to do it in the most efficient, least costly way that is consistent with congresss intent. We raised our game significantly on this. We have been putting out white papers in connection with a rules, like a surcharge or others i could mention. They explicitly solicit comment on costbenefit analysis. A unit of the that will focus particularly on costbenefit analysis. We are trying to be better at that area we regard it that. We regard as fundamental of what we do. Senator you mentioned the word capital. I think it is key to bank survival are in survival area liquidity is important. Dont they go together to have a Strong Institution . Runs isowell liquidity what kills banks did banks. Having that capital makes it less likely there will be a run on the bank. They do work together. They are important. Thank you, senator. Tester i want to start my comments by echoing the Ranking Members comments on janet yellen. I think she has done an incredible job in a difficult situation. She should be recognized for that. I appreciate you being here today. The debt is about 20 trillion. Could you give me an idea of what an additional 2 trillion would impact . Jerome Powell Holding all else equal, you would have higher interest costs, obviously. Taxes will have to go up to pay for that or you will have more debt, and that will crowd out private capital. Senator tester is there any number that goes up . Jerome powell i dont have that handy, no. Senator tester about one third of our current that is due to the last talks done during the bush administration. We need to get the right information. I dont know if there is anybody on this side of that doesnt want to see a more simplified tax code. I think the reason the Ranking Member asked the question is because theres not a lot of information on what the impact is going to be, and after it is done, it is too late area and late. It will impact your portfolio significantly. There is a bipartisan bill that we will address this week call action. Latory its a bipartisan bill. There are 20 cosponsors. Have you taken a look at it . Jerome powell yes i have. Senator tester are we doing anything that will put our system at risk with the regulatory relief . Jerome powell i dont really see anything. We are going to offer technical comments. I dont see anything now. Senator tester part of that is illuminating the volcker rule. Any concerns there . Jerome powell none. Senator tester there is a process the fed commit completed this year or in year. This is something everybody can get behind. Work and maked to sure we are not being duplicative. Do you have any plans as chairman, i think you will be confirmed, you have any plans to update and modernize the examination process between regulators . So there isnt that duplication . Jerome powell assuming that i will be confirmed, that is something i am committed to. A lot ofessed with regulatory agencies in our system. Some of that is good at, but it does lead to overlap and duplication. I am committed to improving that. Senator tester looking at your position, would you say the number one job that you have to do as chairman of the fed is to make sure consumers arent harmed without harming the safety of the Financial System . Jerome powell i cant disagree with that. Senator tester ive got about 50 seconds. We entered boost the capital standards account that would create an Advisory Commission on International Insurance standards. As chairman of the fed, how would you work with regulators to make sure the fed understands the nature of these entities and their oversight . Jerome powell four insurance companies, we have acquired significant amount of talent at the fed and other agencies. We would be committed to understanding the industry as best we can. Regulation, we want to be as transparent as we can make it. Tester i would be different than Financial Capital institutions . Jerome powell the risks of those institutions are quite different and we are aware of that. That concludes the first round. Several have asked for a second round, we will do that. I will reserve the right to jump back in. I will go back to senator brown. Againr brown thank you for being here. I want to followup on some questions. In 2008, bank profits are up and wages for working people are stagnant. The wealth gap between whites and africanamericans and latinos hasnt narrowed. Many people in my state havent felt the economic recovery. You know those things. Past chairs talked about inequality as a personal problem and as a pressing economic problem. There is not a consensus among economists that income inequality and wage inequality is a drag on growth. Do you agree with that . Jerome powell i do agree with that. I would say to me, the most , if you lookctor at the flattening of Educational Attainment in the 70s and 80s and you look at the rise in inequality and the stagnation of median incomes, those two stories fit together. Workers tor u. S. Compete in the Global Economy is having the best skills and the best education in the world. That is a big part of the story behind inequality. Do tor brown what do you invest in retraining and education . What do you do to address income inequality . Jerome powell we dont have a lot of tools to address it. Say our commitment to our dual mandate in particular, the maximum employment and eight, is to make sure that anyone who wants a job either has one or can find one relatively easily. Brown does that give you pause when people say you can raise Interest Rates when we are at full employment. That might be for people who look like me who get to go to college. Color, people who have force, its not full employment for them. Does that give you positive about increasing Interest Rates . Jerome powell of course. We are focused on pockets of ple for whom the covering recovery is not real yet. Some groups have higher unemployment rates than others. Aggregate level. Its important to say we are raising Interest Rates because the economy is strong and if we wait too long, if we were to wait too long, the economy could overheat. We need to raise rates. A recession would not help those people. The best path is to continue with gradual interestrate raises. Brown i would echo what pope francis said in exhorting his parish priests after he became pope, he said go out and smell what the flock. I would ask you to do some of the things that he did. Really talk to people and see people who are still not in this economy that has been pretty good for people like us, but not so good for others. The financial crisis wasnt the result of a single bad decision. Dozens of bad decisions to , there was a certain sense of deja vu with bankers and policymakers becoming complacent. Between this legislation, we are set to consider the deregulation and the work done by the administration and regulators. Look at who the president has put on some of these awards boards. They are on the course to make stress tests and living wills easier for global banks. Are you certain that all of these changes arent paving the way for the next financial crisis . Jerome powell certainty is a high standard, i am confident that is not the intent. The kind of things we are talking about doing would not push us in that direction. Senator brown fewer stress tests . Jerome powell that is not something we have decided. Verynk thats a important post crisis innovation. Senator brown should we consider pulling away from stress tests, even in regional banks . Jerome powell i would go back to tailoring. We really want the most stringent thing to be happening systemically. To tailor or taper as we get into less significant institutions did senator round warrant institutions like countrywide smaller than some of these regional banks that will test . Relaxed stress Jerome Powell that is not something we have decided. Bill thatown its a congress is looking at. Jerome powell you were looking at regular stress tests. That concern does you . Jerome powell as we discussed, its not something that we have look that yet. Senator brown you are saying you support this legislation. You say you havent really looked at it. That means you are not publicly yet supporting the legislation. Jerome powell its not the legislation. Its what we do with the legislation. It will be in our discretion to decide. To decide how frequent stress tests will be. I dont know what we will decide about that area we havent looked at the question. We are going to exempt banks below 100