U. S. Banks have in standardized models. We have ongoing discussions on this issue and i think are coming closer to reaching agreement on this final issue which would let us finalize parcel three. This is not a question about changiapplied to foreign banks. But we have imposed we chose to impose standards on u. S. Banks, particularly systemically important banks that exceed the global minimums that we are agreed in parcel, those are expected to be an intended to be minimum requirements in individual countries that see a need and benefit from having Higher Standards are fully expected to adopt Higher Standards and in some cases, particularly with the largest and most systemically important u. S. Based bankings organizations, we have done that in imposing Higher Standards and think it is appropriate and warranted by the safety and soundness benefit for our financial system. Time iseri your expired and mr. Paulson is recognized. Thank you for your service to the country and taking the time to engage with us as policymakers. You mentioned the importance of having more robust growth and dynamism in the economy in terms of investment and Capital Investments in people, employees at Different Companies and some of the tax policies we are talking about now will and cant and should lead to that more robust growth that people would anticipate. The conversation earlier about wage growth which has been relatively modest. Issue,e a phillips curve which the fed looks at in terms of the logic of it and a tight labor market. You should have with low unemployment and that should lead to more competition for workers with higher wages and some of the high wages would get past to higher prices for consumers and inflation will rise. The data does not support that. It has been a mystery. From your perspective as you look at whether the socalled phillips curve between unemployment and inflation, no longer being valid . What are your thoughts . Chair yellen it is still a framework i personally find useful. I think the relationship between unemployment and inflation has become more attenuated overtime. Over time and the impact of changing unemployment on inflation has diminished. That is well documented in many studies. Justnot want to overstate how strong that linkage is. Frameworkverall incorporates an understanding that there are other very important factors that affect inflation. When you look at the u. S. Inflation history over the last five years, or since the financial crisis, movements and oil prices and also movements in the dollar that have translated into significant changes in the pace of inflation of imported goods, those things have had very substantial effects on overall u. S. Inflation. If we look back over the last 3, 4 years, five years, i do not think it is a mystery why inflation has been so low. First, we had a lot of slack in the labor market. Then we had times where we have Falling Oil Prices which pulled inflation down. Theting in mid 2014, dollar appreciated substantially with import prices fell down. We want inflation to be close to our 2 objective as possible. Of course there will be variation and these things produce variation. What is surprising is that this ratewith a 4 unemployment , we are in the vicinity of full employment. Oil prices have been roughly stable and the dollar, if anything this year, has depreciated somewhat, pushing up import prices. Why is has inflation fallen this year and then so low . That is puzzling and i have opined on their have been a number of transitory or idiosyncratic factors that explain that. It is something we are watching and want to look carefully at the generally, a framework that ,ncorporates labor markets slack in the labor market along with these other factors, that provides a good understanding of inflation in the u. S. Rep. Paulsen would you say tax reform proposals for large and small employers aimed at increasing productivity, even with a low Unemployment Rate, would be helpful or essential in making sure those individuals in age 2554 range that have, in their prime working years, with a higher Labor Force Participation rate what that higher productivity help change and enter those people into the labor market again . Chair yellen i think investment spending by private Investment Private company does matter to how well equipped members of the labor force are to produce. And stronger investment could raise productivity and that growth goes up, that can boost wages. The linkage is between tax policy and investment spending are ones that economists do not agree on. It is important, i think, for congress to try to evaluate what you think the likely impact would be feared stronger investment, i think, what have favorable impacts. Chair yellen thank you rep. Tiberi thank you. Thanks toto add my your firm hand and wisdom, nonpartisan, you fulfilled a dual mission of the fed, low unemployment, stable low inflation, very well and we will miss you. Chair yellen thank you. Talkndidate donald trump about abandoning nafta and now the immigration is working on prioritizing modernizing nafta. That theave seen higher perception of nafta risk is driving down the value of the peso and making mexican goods and services more competitive. Do you agree that stable trade treaties are the best way to . Olve trade and balances chair yellen without commenting on nafta or any trade treaty specifically, overall the United States has benefited from more open Global Trading environment. We have gotten the benefit of a broader range of goods and Services Available to consumers at better prices. Lower input costs for firms. Export to aity to broader range of markets. But there are adverse impacts of such developments on particular groups in the labor force. And it is important for congress to keep in mind the need to address the locations that may come from trade. It has generally been beneficial. From the mexican point of view, studies suggest that the u. S. Enjoyed some benefits, at least overall from nafta. Mexico, i believe, enjoy significant benefits. As you said, there has been downward pressure on the peso because of the discussions that are taking place. Rep. Beyer in the washington post, discussions about how much Dynamic Growth will occur from the tax cut packages. Theggest the Editorial Board suggested that if the revenue increase targets are missed been the taxes should be automatically raised. Is this the best way to ensure of fiscal responsibility . Chair yellen my understanding is the triggers are motivated by a concern that some have over the picture we have of the sustainability now and in the future. I would simply say that i am very worried about the sustainability of u. S. Debt trajectory. Our current debt to gdp ratio of about 75 is not frightening, but it is also not low. When you look at longterm budget projections by the cbo, it is the type of thing that should keep people awake at night. Which, as picture in our population ages, expenditures on medicare, medicaid, Social Security grow more rapidly than tax revenues and the debt to gdp ratio moves up. This should be a significant concern. Exactly what is the right way to address this is a matter for you to decide. My understanding is that the trigger discussion is motivated by that and i say it is right to be focused on that problem. I would urge you to remain focused on it. Rep. Beyer that is what stimulates the trigger discussion, yes. We talked about the phillips curve and you talk about low oil prices. The movement in the dollar. The transitory idiosyncratic to theors some suggest global this inflationary impulse of integrating china and other lowcost countries into our Global Trading system means that the fomc 2 target will be hard to hit for the foreseeable future. Chair yellen we are forecasting an inflation moving up over the next year or two back to 2 . That is a reasonable forecast, although i believe there is uncertainty, which is, why we have indicated we are closely monitoring these trends. Is important to describe they are important trends and i would point out that our estimates of the sustainable level of the Unemployment Rate have declined very substantially. Discusseds that you that have arguably exposed firms more heavily to global competition can constrained prices, and restraining Bargaining Power of labor, rather than necessarily showing up as chronic low inflation, these things can instead mean that the labor market can operate on a sustainable basis at lower Unemployment Rates then we may have thought of in the past, in the 1960s, 1970s, or 1980s. Currently, my colleagues estimate the sustainable level of Unemployment Rate in the u. S. Is just over 4. 5 . That contrasts with a 6 or higher we used to think. I think the trends you mentioned have been influential in meeting, yes, it is true, it takes a tighter labor market or lower unemployment to give us 2 inflation. I do not mean to minimize their importance but i think it should be achievable for us and we do have a low Unemployment Rate. Rep. Beyer thank you. Rep. Tiberi you are recognized for five minutes. Thank you for your service to the Federal Reserve and to the country. I have a question as it relates to the commercial mortgage market. We are all aware that in 20082009 and we have the financial crisis as it related to the Housing Mortgage market and as we look at the growth of amazon and other Amazon Online retailers across the country, changing the Business Model as it relates to retailers. We continue to see traditional brickandmortar stores and malls being obliterated across the country. Jcpenney, macys, sears roebuck, and large malls. In mediumsize markets, there continues to be vacant commercial properties. In these type of brick and mortars become unproductive. As we look at the commercial mortgage market, can you comment on whether there is a possibility as these nonproductive properties continue this trend of causing a financial crisis like we saw in 2008 and these markets going bad . Chair yellen i think you are raising an important question. I do not have details at my fingertips on these trends. Rates he liquids he delinquency rates are pretty low income or to real estate. Propertiesegacy incorporated that have much higher delinquency rates. But we are focused on underwriting standards at banks, at maintaining strong underwriting standards to protect the Banking System against possible weaknesses that could result in especially commercial real estate. Overall in commercial real estate, we see that valuations are very high. And we have highlighted elevated asset prices, commercial real estate generally is an area where we do see elevated prices were low cap rates. We are focused on soundness of underwriting standards and the safety and soundness of Banks Associated with it. Detail, just how this trend is going to play out, i would like to get back to you on that. Rep. Lahood do you have any fears or concerns . Chair yellen these are obviously significant trends. They are affecting retail. What they will mean for banks is something i would like to look at more closely and get back to you. Rep. Lahood thank you. Another topic i wanted to talk about generally, the makeup of the Federal Reserve. For the last decade, the Federal Reserve has had at least one vacancy in the board of directors and should this to how become the next chair after your resignation, the board will only have three out of seven positions filled. I understand the president must nominate and the senate must approve every appointee and both parties are cobras in the gridlock. Thats culprits in the gridlock and can you give us an example of how you do not function optimally without a full board of governors . Chair yellen it is important that the number of governor serving on the board increase and ideally it would be at full strength at seven. My colleagues and i would welcome additional appointments to the board. I do not think there has been any significant amount of time, perhaps not ever, the board has operated with only three members. That is a very rare and difficult situation. But let me say that it does not stop the Federal Reserve from carrying out its mandated activities. And while our deliberations benefit from having more individuals with the range of views and asked her pairs of ands extra pairs of extra pairs of hands for oversight responsibilities, the fed can carry out its key work, even with a diminished board. Rep. Lahood do you have any suggestions on reform as it relates to this topic . Chair yellen as it relates to the Federal Reserve in general . Rep. Lahood recommendations or reforms to help with this problem of only having three or limited members on the board . Chair yellen i think it is part of the trend of slower appointments and more vacancies. I think it is really it creates a problem for it to take so long to have individuals nominated and confirmed. This is something i think is important for the senate to look at, the administration, there have been many reports, including one i participated in myself some years ago by the National Academy of sciences, about vacancies and the difficulty of making appointments to agencies. I do believe it is a significant concern. I do not have suggestions for you on how to improve that. Rep. Lahood i agree and thank you. Rep. Tiberi representative adams you are recognized for five minutes. Thanks andnclude my want to associate myself with the congresswoman who made the comments about the accomplishments you have made as a woman and hopefully we can find some women as smart as you to fill some of the seats. In my home state of in my home state, the Unemployment Rate in the First Quarter of 2017 was 4. 2 for africanamericans and 7. 5 for hispanics, 5. 3 . The unemployment disparity is not a recent or onetime occurrence. The Economic Policy institute looked at the change in Unemployment Rates between 2007 and 2017. They show that the white and employment rate in North Carolina is now below what it was before the recession. While the Unemployment Rate for africanamericans and hispanics is higher than it was before the recession. Do you believe that the Federal Reserve should ever consider full employment mandate achieved when there is significant disparity between the white Unemployment Rate and the black Unemployment Rate . Chair yellen i find the parities, which are long which have long been there for many years between africanamericans, whites, hispanics, i find it very disturbing. To reflect broader problems that minorities and less skilled individuals also are having in the labor market and they are very worrisome and damaging trends. That for most of these groups, Unemployment Rates and other measures of labor market functioning are back to levels that we had before the crisis. I believe it is the case that since the bureau of labor statistics started collecting information on africanamerican Unemployment Rates, that it is almost never declined below 7 . These rates bounce around a lot. In september, the africanamerican unemployment. Ate did decline to 7 in the most recent reading in october it moved up about. 5 . It is generally at a low level. Unfortunately, africanamerican and other minorities Unemployment Rate and labor Market Experience are highly cyclical. Hit and Great Recession unemployment nationally skyrocketed, the worst experience and largest increase of unemployment and the greatest toll came for africanamericans, hispanics, and other minority workers. As the labor market strengthened , the africanamerican Unemployment Rate has declined more strongly than for whites. The disparities now, which are longstanding, africanamerican Unemployment Rate have basically double those of whites, or back to Something Like that again. Dr. Adams the United States makes up about 5 of the world population, 21 of the world in 2014 and 20 average americans counted for 2. 3 million or 34 of the correctional population. What do you think is the impact of mass incarceration on unemployment . Chair yellen it has a port an important and negative affect. There have been many discussions about ways to potentially address that. Clearly, it is something that employers will be less willing to hire individuals who have criminal records. This is a serious problem and concern. I will say that and this is anecdotal, as opposed to systematic. As the labor market has tightened and so many firms, almost all firms we talked to, report they are having difficulty finding workers. I do hear more reports of individuals who may have a criminal record, who are succeeded succeeding in finding jobs and integrated back into the labor force. But it is clearly a significant issue. Dr. Adams thank you and you answer the other question i was going to ask in your response about the labor force and getting back into it. Thank you very much. Again, thank you for your service, we appreciate your leadership on the committee and wish you well on your future and evers, mr. Chairman. Future endeavors, mr. Chairman. Chair yellen, we appreciate your tenure as chair and you have presided over the fed during challenging times and have always been a steady hand and we appreciate that and look forward to following you in your future endeavors which i am sure will be as equally as significant. Chair yellen thank you. Rep. Peters you mentioned and i would like you to elaborate, the linkage between tax policy and investment is under some dispute among economists. There is disagreement as to whether or not these tax cuts would lead to a level of investment. Is that because the data is inconclusive . Tell me more about the debate and why we cannot necessarily think there is a strong linkage . Chair yellen i am not an expert on this topic. Let me say that out the outset. It is not one that we are attempting ourselves to independently evaluate. There is literature on this. Empirically, the linkages are not clear. So it is difficult, based on empirical information, to draw strong conclusions. Theoretically, tax changes that toer the cost of capital incentivize greater investment and with greater investment there is arguably some passthrough into wages. But i would say that empirically, generally, impacts of the cost of capital on investment spending are very hard to detect also in economic data. Almost economists think there is some linkage while most economists and there is some linkage, not pronounced enough to come across in a clear way in the economic data. Of course, the entire set of tax changes under consideration matter. I think this is a cobbler to the question. Complicated question. Rep. Peters it depends on Investment Decisions for the people who receive the tax breaks which are human beings. My experience is that it is probably best to listen to people about what they would do if they get a large tax break. I think it was interesting that today in bloomberg, an article that the tax promises undercut by ceo plans to reward investors. Ceos are telling us Something Different than what we are hearing from the administration. They are telling us that if they get the tax break, they will do share buybacks and there will be significant share buybacks. Said that the Earnings Call he has been actively returning capital and will continue to do that in the form of dividends and buybacks. Executives from cocacola, cfo said that the we will be able to get much more aggressive on share buybacks after a taxcut. At a november 14 speech to the wall street journal, ceo by a top Economic Advisor gary cohn, the moderator asked the Business Leaders in the audience to show hands if they had plan to reinvest these tax proceeds, few people responded to a couple of hands went up, i think. It would impose a lower tax rate on company stockpile overseas earnings. Giving them an incentive to return trillions of dollars in offshore cash to the u. S. That money is also unlikely to spur hiring because companies are already wellcapitalized and can bring on as many employees as they need, according to john shannon, a foreignexchange strategist at bank of America Merrill lynch. He is quoted as saying companies are sitting on a large amount of cash and are not financially constrained. He conducted a survey of more than 300 companies asking their plans for a tax overhaul and they said they will all basically focus on their shareholders and engaging in buybacks. As the fed looks at this, no linkage between these tax cuts and investment, ceos will say they will do share buybacks. As the fed looks at that in your buybacks r share our share buybacks going to increase wages . We will get back to this in a second and the European Equity markets, our wonderful function. European stocks are rising for a second day, the highest level since november with Credit Suisse forecasting roughly 9 total return for Global Equities next year. Concentrated in the first half of the year with the second half of appearing more challenging. Sterling is up, one reason the ftse is down. Look at the yield on the 10 year, up 10 basis points. This is the move i wanted to tell you about. Sterling versus its g10 peers, every single g10 currency is declining against the pound today after the u. K. And eu negotiations rates the outline deal of the divorce bill that britain will pay when it leaves andblock, creating a hurdle leaving the thorny issue of the irish border as the last major issue. His is another wonderful chart u. K. Economic confidence falling to the lowest level in six months and november, dragged down by a sharp drop in services, the biggest part of the economy. According to a European Commission report published today, eurozone testament, the blue line, is at the highest level in that sense since 20 07. One of the big movers today is executive will step down immediately after a request by the board. He will be replaced by the interim cfo. Acting asking a fund manager to withdraw its requisition for a general meeting. There has been a lot of news flow out of the lse in the last month. Lets get back to the chair yellen testimony. Chair yellen based on existing literature. Cruz, youen senator are recognized for five minutes. Cruz thank you for your service and your testimony. That inflation has continued to run below the 2 rate that fomc considers the most consistent with maintaining maximum employment and price stability. You have expressed some uncertainty as to why this is the case. Factor that your testimony did not discuss is that our Labor Force Participation rate remains at its lowest rate since 68. 2 . How does the historically low Labor Force Participation rate impact your assessment of the employment picture the country is facing right now . Chair yellen the employment picture . Sen. Cruz yes. Chair yellen a complicated question because there are good reasons why the Labor Force Participation in the aggregate is declining in the United States. It is a trend we expect to continue because it mainly reflects the aging of the u. S. Population and the fact that individuals, once they reach their retirement years, participate much less in the labor force than before those years. Even though, more recent cohorts of retirees are working more than their parents did, overall the Labor Force Participation rate drops when the population ages. This is a continuing trend that will not go away. However, what aboutif i may, discouraged workers and workers who dropout of the labor force who are of working age and are not seniors but simply giving up on hopes of finding meaningful employment . Chair yellen if you look at prime age workers, the Labor Force Participation rate has come up as the economy has expanded. They are not quite back to the levels we saw prerecession but what you had in the United States is for prime age workers, especially men, chronic longlasting multidecade decline in Labor Force Participation. Own assessment would be that is not about retirement, that is about working age individuals who are not participating in the labor force. I think that reflects longerterm trends that are adverse, that are affecting particularly low skilled americans in the workforce, the disappearance of middle income jobs, pressures on wages at the lower end. , which partlysis reflects that labor market distress and also contributes to individuals staying out of the labor market and being not able or willing to work. I think we do have adverse trends affecting Labor Force Participation. You ask how does it impact my view of employment when i see for the last three years, u. S. Labor force Participation Rate has been essentially stable. , see that as a good trend showing improvement in the labor market because stability is occurring in the face of what is a declining underlying trend. It does suggest that, with a stronger labor market, we had individuals who are being drawn back in by greater Job Opportunities and more helpwanted signs. Sen. Cruz i agree that the trend, particularly towards working age adults dropping out of the labor force is troublesome. We need serious Economic Policy to address and hopefully change that trajectory. One of the factors i think is important for doing so is a robust Small Business sector. And an ongoing concern is Credit Availability for Small Business. ,hen Congress Passed doddfrank one of the major basis for doddfrank was stopping the phenomenon of two big to fail. As we have seen doddfrank implement it, big banks are all bigger. You made reference to that in your last answer, we have seen and ive revision of capital and giant banks have gotten bigger and bigger and bigger under doddfrank and small financial institutions, Community Financial institutions are going out of business at a record rate. How would you assess the effectiveness of doddfrank, particularly on impacting small and Community Banks, and how has that impacted Credit Availability in terms of small this misses that Small Businesses Small Businesses . Chair yellen Community Banks are gradually diminishing in numbers, it has been a tough environment for them. Burden istory something they are suffering from. It is something we are focused on trying to address and reduce. Us, that is and should be a very important priority. There are other things making it tough to be a community bank. Including the fact that we are in a low Interest Rate environment with a pretty flat yield curve. That has impacted the interest margins and earnings. Separate completely factor. In terms of Small Business lending, the landscape has changed a lot, perhaps Community Banks are providing less than they used to while large banks are providing more. Online lenders and new firms are coming in and filling part of the void and devising new ways to end quickly to lend quickly to Small Businesses in ways that are perhaps less costly than traditional banks. Our surveys suggest that there are some particularly small and minority firms that do feel that they do not have adequate access to credit. Surveys of small firms like the National Federation of independent business, somewhat larger but still small firms, that suggests that most firms feel they have adequate access to credit. They do not feel they are in an environment where the credit needs are not being satisfied. As a general matter, i think credit is available. I think banks are looking to extend credit. Questions,ed them they say they do not see much demand on the part of Small Businesses for credit. It is hard to disentangle the man, what is driving something, whether demand or supply. There is evidence there is we demand which is not simply a matter of weeks of life because of regulation weak supply because of regulation. You are recognized rep. Tiberi you are recognized for five minutes. Thank you for your service. About how youweet have been a strong and steady presence and have done good work and are very popular. Chair yellen thank you. , comingt to thank you in as vice chair and chair. At difficult times in our country. And in my state i have seen your what we havend seen with the Unemployment Rate , whilestate at 3. 3 and i see issues with the cost of things, i see issues with our debt and other things we have to tackle. In the congress, i want to thank you for your steady hand. You. Yellen thank sen. Klobuchar i want to talk about infrastructure, i am disappointed as we look at the tax bill we are seeing in the house and now in the senate. It adds in the senate stays over 1. 5 trillion in debt and no money in infrastructure. If we are going to start messing around like that, i would think we want to put in an injection of funding into our infrastructure. Could you talk about how improving u. S. Infrastructure, including our broadband, can benefit the economy . Chair yellen i do think it is one of the factors that impact productivity. When i think about what we can do to improve Living Standards and raise your activity, i think about all sorts of investments. Private investment in Capital Equipment is it is important and affect many workers. Sen. Klobuchar the depreciation tax, how important that was during the downturn . Chair yellen infrastructure is important and i would also add to that a focus on investment in people and in human capital, which is, especially in light of rising inequality, a form of investment that deserves emphasis. Sen. Klobuchar that has been a major focus of mine, because our state has such low employment, it low unemployment, especially in rural areas, Susan Collins and i entered as a bill to expand apprenticeships programs and i think there is much more work we can do. Can you talk about the issue of we have students who sometimes are not graduating from high school or are graduating from even college with degrees and they cannot find jobs, yet we have hundreds of thousands of jobs in welding and trade. Chair yellen there clearly is we have a tight labor market, almost every firm you talk to discusses the challenges of finding qualified workers. There is a degree of mismatch that the qualifications that people have sometimes sometimes College Graduates and often College GraduatesHigh School Graduates cannot qualify for the jobs. Training, apprenticeships, other countries like germany seem to do a better job of matching people with jobs then we do. Do. Han we when i travel around the country , i am interested in what sort of programs work. A lot of efforts by Community Colleges and nonprofit, sometimes partnering with firms, to try to address that skill gap. I have seen many programs i think that a very promising. Givingmonths or a year people the training or credentials they need for maybe a manufacturing job that requires Technical Skills but not a college education. What i am particularly gratified by is that, in a tight labor market like we have now, firms are interested in these programs. They really want to participate because they really need workers. When they care about it and do not have a lot of applications in the hopper, they are willing to invest in it also. And partner with the Community College or the nonprofit to guarantee that somebody coming in can participate in the Training Programs and they will guarantee that, when someone comes out successfully out of the program, they will at least be sure they would get a chance at a job at that firm. This is occurring. This is an area that obviously congress cant consider investment in but this is private sector can consider investment but this is private sector. Sen. Klobuchar tax credits but also just pilot programs best practices. , was in minneapolis at academy they focus on minority students, 700 per year are getting credentials and they directly go into the jobs when they graduate because the Companies Like thor construction, one of the biggest minority owned Construction Companies that just work on our stadium that will host the super bowl, not that i am promoting on stage, in february. It was just really these things have to be encouraged because otherwise we will lose work. Chair yellen i completely agree. I think it is these programs that are deserving of emphasis and can be very successful. We are trying, through our own work, our Community Development programs that exist in the reserve banks, to understand what is best practice in this area and to disseminate information about approaches that work. Sen. Klobuchar thank you very much and we look forward to seeing you in your new capacity. Chair yellen thank you, i appreciate it, senator here in i appreciate it, senator. Chair yellen it has been an honor rep. Tiberi it has been an honor and privilege to hear you and this is my last hearing at the joint Economic Committee as the chairman and i want to thank Ranking Member heinrich and senator donnelly, and senator lee, and all the members of this committee for making my term a successful one and i want to thank the hardworking staff at the joint Economic Committee. In particular, whitney, sitting to my back. And for the historical knowledge, i want to thank colleen for helping us get through all of the challenges at the beginning of this process. It has been an honor and a privilege to chair this hearing. I look forward to watching it in the future as a private citizen. Thank you, chair, for your distinguished service and if members wish to submit license for the record it will be open for five business days. We are adjourned. Rep. Tiberi thank you, stash chair yellen thank you, so much. You have been watching the joint Economic Committee with what is very likely to be Janet Yellens last appearance on the hill. It was almost two hours and we saw testimony from janet yellen and several questions from questioners with a little bit about regulation and the economy. , janet yellen is still a little bit concerned about the downturn in inflation, this year in particular and was quite happy at the end of laughter with peter directory of inflation but some disinflationary trends, she still thinks that they are transition very, not going to be around for the long term but we cannot say that for sure until we look at hindsight. Mark it could be her last testimony. There were a number of tributes. She described what was a steadily brightening picture for the economy. We saw the statement before, she downplayed the risks of financial instability and said the economic expansion is increasingly broadbased across sectors and across much of the economy. To use her words, she said i expect that with gradual adjustments in the stance of monetary policy, the economy will continue to expand and the job market will strengthen somewhat further. Supporting faster growth in wages and income. It sets us up nicely for the fomc meeting and a couple of weeks. She answer deftly the questions on fiscal policy and congressional concerns by saying that things like the Corporation Tax were very important. Question for congress to consider about the Federal Reserve. Lets bring in our fed expert, Michael Mckee. It seems that janet yellen as least with what happened during her tenure but questions are remaining. A struggling economy when she took over, one of the slowest growing recovers we have seen. That is what happens after a financial crisis. She has brought up growth as she leaves to 3 and the Unemployment Rate up 4. 1 and may be lower by the time she leaves office is historically low. Almost as low as records in the late 1990s and early 2000s. She has a lot to be pleased about in terms of her performance as many people say there would have been no better appointment for the next term than her. Donald trump wanted to make a change and she goes out with her head held high. She is not suggesting any serious changes from her policies need to be made. Vonnie a huge market reaction, thank you for the moment. Lets go to kevin cirilli, our chief washington correspondent in washington with a guest. We are here outside of the joint Economic Committee hearing where Federal Reserve chair outgoing Federal Reserve chair janet yellen testified for what is expected to be the last time. Senator, what is your take away from the remarks . I she has so much respect and think you heard good words about her from both sides of the aisle. She has been a steady hand. When she served as vice chair and chair, where the economy was and where it is now, i think you see nothing but respect. I have always enjoyed her personally, as a woman to see a leader like that running the Federal Reserve. The fact she has so much respect during the entire time and really had trust, it helped our economy. A big takeaway from my reporting was senator bob corker asking about the impact of the proposed republican tax plan on the market. Janet yellen said that she is very worried about the u. S. Debt trajectory. Your question focused on infrastructure as a means of economic stimulus, not just on roads and bridges, but on broadband. What was your take away from that and the answer to your question . Sen. Klobuchar she did a great job explaining why infrastructure is so important for our economy. If you were are an export economy, you have to get gets to market. We are looking at a bill that is extraordinarily adding the debt at 1. 5 trillion, that was the point by senator corker. And we are not getting Infrastructure Investment out of it. The original plan discussed over the last few years was to create an incentive to bring some of the money from overseas. Yes. Tied to it would be investment in infrastructure. You set a rate and induced to get money back and then a certain percentage of it would go to infrastructure. Everyone would know that from the front but we do not get that benefit, we get a big debt which is not good for the middle class in terms of where you look at where the most of the help is going, to the wealthiest. One final question, you are busy, we appreciate your time. Let me ask you about what a lot of ceos are saying making the rounds, bloomberg reporting this, they were not necessarily see the tax cuts go back to the middle class, it would go to shareholders. When you evaluate this proposal in the senate that is likely going to come up tomorrow for a vote, what do you make of the discussion about the tax plan and who is going to benefit from it . Sen. Klobuchar that is the core of this thing, the tax plan is the values of a government, the value of where you put people. When you look at income disparity and how hard it is for the middle class to afford things, that should be our focus. I have 18 fortune 500 companies and was one of the people who wanted to see the corporate rate go down and the money coming back from overseas to create incentives. There was ways you could have done this with much more help for the middle class. As big a break for the company but some break for them. Instead, it is at the extreme. Time. Appreciate your a busy day on capitol hill. Vonnie fantastic stuff. Kevin cirilli, thank you for bringing us that interview. Lets bring in back Michael Mckee. To make a comment on how the tax process is grinding its way around the hell. The senator hill. It sounds like a done deal but the trigger question which is taking up a lot of time today. Whether they get enough republican votes, they are doing this by only getting republican votes, is the deficit hawks, the people who think it is a bad thing to have too much debt. Otto porter being one of them as kevin referred bob corker being one of them. Ist economists would say it a terrible idea for the trigger because it needs to raise taxes when government revenue falls and when government revenues fall is in a recession and the last thing you want to do. Janet yellen avoided comment on that. She did suggest that she is very worried about the rising level of debt in the United States and the debt to gdp ratio. As fed chairs usually do put it back on congress, you should do something about that. Mark so much to talk about. The lack of governors, she was asked how things work without the governors. It has been a long time with a gap in the fed board of governors. It becomes problematic eventually if donald trump does not start filling these positions. It does, you will have three governors and only one of whom has a doctorate in economics and any largescale economic training. They need more people who know what they are doing and how what happens in the economy. Not to disparage jay powell and his ability. The fed has a lot of responsibilities, including Bank Supervision and running the payment system. Things beyond monetary policy. Those are divided beyond the governor and although janet yellen put a brave face on it, it is obvious that with fewer people doing the same amount of work, they will get overburdened fairly soon. Vonnie Michael Mckee is sticking with us as we dissected the testimony by janet yellen and the tax debate. Downwardrkets, a drift for the mastec mobile index down 1. 5 of the dow is higher. This primarily on semi conductors. Thanks docs not doing too well. Fanganks stocks not stocks not doing too well. This is bloomberg. Retail. Under pressure like never before. And its connected technology thats moving companies forward fast. Ecommerce. Real time inventory. Virtual changing rooms. Thats why retailers rely on comcast business to deliver consistent Network Speed across multiple locations. Every corporate office, warehouse and store near or far covered. Leaving every competitor, threat and challenge outmaneuvered. Comcast business outmaneuver. Vonnie in new york at 5 p. M. In london and 1 00 a. M. In hong kong. Welcome to bloomberg markets. Vonnie from bloomberg World Headquarters in new york, here are the top stories. Havehair janet yellen may given her final testimony to congress, she is describing a steadily brightening picture for the u. S. Economy while downplaying the risk of financial instability. We will get the highlights. The chief marketing officer of Ford Motor Company and Vice President of the luxury line lincoln will join us live from the los angeles auto show. More on their new Product Launch this hour. And bitcoin shines, they surpassed 11,000 in a matter of hours after hitting the 10,000 mark which took