Transcripts For BLOOMBERG Bloomberg Markets European Close 20240712

Ratings to three additional firms that have significant business in particular sectors. It is three others who were also considered major. We understand that does leave some companies that do not have a rating. As we open these facilities, we are just in the process of opening, we are looking for an answer. An nisro and has not traditionally been used in this way. We are looking at options for what to do. I was like until you i wish i could tell you we had an answer. So you have not opened it yet but you have not foreclosed the possibility of finding a solution for this challenge. Powell we are still looking for a solution, yes. Any timeframe you can put on that . Powell we talked about it yesterday so we are working on it. Soon, i would say. Stress thatnt to there are dozens of companies with very strong Balance Sheets and employee tens of thousands of people across all of our states who for one reason or another choose not to go for a inlic Rating Agency but are many ways in the same position as a publicly traded company who would use these facilities and i really hope that the Federal Reserve and the treasury can find a way to treat everyone in an equitable fashion and protect as many of those jobs as possible as we try to open up our economy and get back to something more like normal. Mr. Chairman, i think i will yield back the balance of my time. I know we have a lot of people with questions. Thank you. Senator tester . You, chairmanhank powell, for your good work. Your hand at the wheel. The Unemployment Rate right now is 13. 3 . I believe that is correct. Memory, at the peak of the great with session when folks were bouncing off the , wes Great Recession were at 10. 6 , right . Powell Something Like that. Fact thatconsider the has been pointed out several times during this hearing that the lowwage workers are the ones that are really severely hit. I think you pointed it out in your testimony. And since we have a lot of poverty in rural america, can you give me an assessment of the programs that the fed is doing working in the areas that it is really needed . It is needed across the country with the 13. 3 which might be a conservative figure, you know that. But with employment where it is at, it is needed everyone. But are we getting it for will bang america . America . Powell i like to think we are through our support of the Paycheck Protection Program liquidity facility. We have made that easier for small banks to use because they can transfer there interest in the loan to our facility and it gives them Balance Sheet capacity and they still get to keep it. That should help and they get to help our words because it borrowers because of it. Also main street and some of those would be in rural areas. Ones in my state are restaurants, bars, workout ableities, motels, are we to focus this money in any way to the Hospitality Industry to really make sure that the money is going there . Those folks are really in tough shape. Agriculture it has been nothing compared to the folks in the hospitality business. Powell that is true across the country. If they had 500 employees that would have been eligible for the ppp program. There is still money left in that program. In terms of what we do, any company that is eligible can borrow. We set terms of broad eligibility and we are looking back through financials the way they were through prepandemic. Anys there any way to do oversight to make a determination whether the people that have actually an impacted are getting the money . I have been told by several businesses that the money is there. We are just starting to do that. But we will certainly be looking carefully. We have not made any of the Investment Grade loans because they opened up wide open and lots of companies borrowed who droppede ones below investment rate. Let me approach something else. I know you dont concern yourself with that as much in terms of economic slowdowns like today, especially as one as significant as this. But when obama left office, the debt was 19. 9 trillion. Over 26 later, we are trillion. What that impact is going to be on inflation and employment moving forward . To say it is hard specifically what it would be. The federal budget has been on an unsustainable path for years. It means that the debt is growing faster than the economy. That is by definition unsustainable. What happens over time is future generations, our kids and grandkids, they will be spending their tax dollars to service debt that we incurred to buy the stuff we wanted when we were in or when we were adults. Every generation is entitled to spend what it wants to spend on the things it needs but it really ought to pay for them rather than passing the bills onto the kids are simple terms. The longer run issue is one of generational equity. The u. S. Has a lot of borrowing power. We have the worldss fastest economy and most vibrant economy. We can borrow a lot. I think we need to get back on a sustainable path. I will close up by saying that the time to work on that part is when the economy is strong, unemployment is low, there was growth, that is when you want to work on that. Those Business Concerns will always be there but i would not prioritize them at a time like this when the spending is giving us a very better economy Going Forward. I agree with you. We should have been prioritizing that before the economy 2017, 2018,ke in and 2019. Thank you. Thank you. Senator rounds . Good morning, mr. Chairman. I want to go back a little bit. Therer in the pandemic was a letter to senator warner regarding mortgage forbearance and liquidity and concerns for mortgage servicers. Thankfully the uptake on forbearance programs has been modest. There is still some concern about an increase in mortgage forbearance is an the fed to establish liquidity facilities for mortgage servicers if Economic Growth stagnated in the coming months. Do you foresee the need for a liquidity facility in the near term and what kind of warning signs would you be looking out for to indicate that need if you have an interest . Regulators housing and treasury have the lead on that. Id say we were more worried about love months ago. That stresses building up just as you described. Of course we will be monitoring that carefully. As a right now, it does not look like there is a need for such a facility. Thank you. Of fed has said that results a review and a stress test will be removed on june 25. Considering the words of understanding how the fed views the response of the banks to the pandemic, this is when we are looking forward to and i think there is some anticipation with the release of that information. Ive also been tracking stress test results with nonstress b requirements in the buffer. Capitolress requirements. Will that include a disclosure of covid analysis and stress capitol buffer requirements . Powell i think it will. We are in the process, that is nine days away. Thefter the release of results on the 25th, what comes next . Will banks have to resubmit capitol plans or conduct additional stress test or is that anticipated response you are looking at or have you gotten that far . Powell we are making an announcement on the 25th. Of course,g nine days before, that we are actively engaged in considering those issues right now. [laughter] ok. Let me run a different route. Given the length of time on a low Interest Rate environment, i think the federal government should consider issuing some longduration bonds beyond the 10 or 30 years that is typical. In the past two years, the u. K. On my canada, and italy have sold 50 year bonds and others have sold some sovereign bonds with 100 year maturities. Is this something the u. S. Should consider and with the fed consider buying ultra long treasuries . Powell that is an issue that is squarely in the province of the treasury secretary and his colleagues at the treasury department. As you know, secretary mnuchin looked very carefully at longer earlier maturities in this administration. It is not something that the fed plays a role in deciding. Very good. Thank you. I yield back. Thank you. Senator warner . Thank you. It is good to see you, chair powell. I dont know if you saw, ben bernanke and 130 other economists wrote to congressional leadership and released a letter pointing out the additional need for stimulus and that we have a 16 trillion hole in the economy that needs to be dealt with. Out hower also pointed enormously damaging the covid19 crisis has been to communities of color. I think we saw that as well. We all applauded the main unemployment numbers. Know, thel unemployment numbers for black Americans Still went up. If i think there is a common point, the Great Recession indicated a prolonged economic downturn will seriously damaging damage wealth accumulation for all americans. But particularly for families of color. A subject that you and i talked about a number of times is the important resource for these provide anat that they provide longterm low income in these neighborhoods. s, any of at mbi these institutions are held back from boosting investments because of lack of capitol or limited access to liquidity and certain other operational limitations. Building agree that capacity at these institutions could provide a significant response to the downturn by boosting access to credit for many of these small minority owned businesses that otherwise a third or Fourth Quarter will be in really tough shape . Andll i think the cdfis mbis are really important in those communities. We have strong relationships with those institutions and we do what we can to foster successful conduct of those businesses. I think if we could really lean in and be creative at this moment and if we could provide these institutions with the proper resources, they could not only be an important component fighting the economic inequality , and again i appreciate you making you making your opening comments, but also about seeing the kind of economic renewal that we so desperately need in this part of america. I have been working on a proposal with senator booker and other colleagues that would provide direct private and public money into cdfis and mbis as part of a longerterm strategy to rebuild and foster Economic Growth. The direct equity infusions we are talking about would be more a treasury directed investment. A are also looking at that would not have loans forgiven but that would still be investment and retentions on some of the obligations of these institutions by helping them clean up the Balance Sheet of some of these entities that would dramatically increase liquidity. We could do equity and clean up the Balance Sheet. I think there would be enormous value here. I think this is completely consistent with the feds maximumto achieve stable employment. It is a mandate that extends to all communities. So many of my colleagues and you have acknowledged the persistent economic disparities we have in our country, this has to be dealt with. There are protests on the street about injustice but there are also longterm economic disparities. , iwe roll out this plan would ask that you and the fed within the bounds of your ,uthority would really lean in expand the envelope a little bit. Because i think we have opportunity and obligation to make sure that these bettering whate would be part of the recovery. If you would make a comment on that. Know and as we have discussed on other occasions, facilities are supposed to be programs of broad eligibility. We dont target particular beneficiaries but rather brought institutions. And anyone who meets the requirements can take part in the facility. Im very happy to take a look at this idea. I know my time is up that i would just point out when we have 40 of americans less than i0,000 a year out of work, think that is a broadbased problem that the country has to address. Thank you, mr. Chairman. Thank you. Senator perdue . Us . Enator purdue with we will move on until he gets back. Senator tellis . Chairman. Ou, mr. Can you hear me . Yes. Thank you, chairman powell for being here. I am kind of curious. I met with the vice chair a while back talking about adding more on additional elements to our stress testing. Some of that is just a Natural Evolution of learning about what works and what does not work. I have heard recently that they are going to add another layer that is specifically focused on the circumstances we found ourselves with with covid19. One of the concerns that i have with that is the Banking Institutions with twice as much capitol after the financial crisis, we could arrive at a point with the results of the stress test to where we are actually going to increase their capitol requirements and that seems to me to be at odds with those relying on the bank to get out there and help families and businesses provide capitol and by and support financial intermediation. Path,are going down this ill be working with the banks to really think through the cost benefit of this particular additional regimen added to the stress testing . Are we at risk of increasing capitol requirements at the worst possible time . Mentioned, we are in the middle of making those decisions and carefully reviewing all of the materials. Im going to have to say, i hear your comments loud and clear. Will discuss that after we make the announcement that we are going to make on the 25th. We are doing sensitivity analyses which seems like the right thing to do. You are also right. We are not looking to have capitol requirements be procyclical. In terms of what we are doing, i think i should just leave it at that. By the way, looking forward to the future announcement. I am looking forward to an announcement on enter affiliate margin. I understand that the regulators are on board. Do we have any idea of when we would expect action . I have been expecting it. I understand it is eminent. You have a read on when we will see that . Powell soon. That is all i know. I wish i could be more specific. Fair, i know it cuts across several lanes but it has been soon since september last year so i hope it is getting to be sooner. I have another question. Thank you. I know you agree. Week, mr. Was last chairman, you said the fomc is not even thinking about raising rates. I think you would on to say that they were likely to stay at zero between now and through 2022. Guidance that this policy is anchored in a calendar rather than fomc goals. Think it was in that setting that you did not mention yield curve control. Was it not right for that particular discussion or do you believe there is not a place for yield curve control in this dialogue . Powell i did say that we are not thinking about raising rates. We are not thinking about thinking about raising rates. I do not mention the end of 22. That came out of the summer of economic injections that showed overwhelmingly Committee Members did not see the likelihood under the current expected path of raising rates at least through the end of 2022. I did mention yield curve. I talked about it in the press conference. I said earlier. It was a briefing on the historical use of yield curve control by the u. S. During world war ii and after which led to the vet a treasury accord ed treasuryry f accord to appoint a committee with what it is and why some of the Central Banks have used it. We have not made any decision to go forward on that. , in the same way we have looked at negative rates. Rates,case of negative we have pretty much decided it is not something we think is attractive for us in the u. S. Yield curve control, just to educate everyone, and decide whether we think under some circumstances might be useful. Thank you. Im going to submit a question for the record about what financial policy we should be pursuing what i consider the doughnut hole, travel, leisure, hotels that were first into the crisis. They will be the last out. I dont believe the treasury has the authority that it needs to come up with a facility for them, but i think it is critically important. Thank you, chairman powell. Thank you. Senator warren . Chairman powell for being here. We are facing an economic crisis that has devastated families across the country. Ago, many people celebrated the latest job numbers which showed a dip in the overall Unemployment Rate. We will not be able to build a successful recovery if we do not understand the scope of the problem. I want to dig into the numbers a little bit today. Chairman powell, our jobs coming back at the same rate for both black and white americans . Powell are they coming back at the same rate . No, actually. I think the answer to that is no. I am going to check that. I believe that the black on did not come down as much as the white Unemployment Rate. As i understand it, white unemployment fell to 12. 4 while black unemployment actually rose 10. 8 . Is that right . Powell i would have known that the day after the report. Yes. It came down for white americans and went up slightly for black americans. Powell that is correct. Sen. Warren back in march, Congress Passed an expansion of the uninsurance on a plumbing program. Now we are a few weeks from that running out. Some people in Congress Want to let it expire. They are saying, mission accomplished. Noted thean, you Unemployment Rate is higher for black americans and now we have just said it is increasing. If congress lets benefits expire, which families will find it hardest to pay bills, take rent, or a for groceries or afford groceries . Powell People Wealth lost their jobs are on notice who or well overrepresented for women. Sen. Warren this crisis has been hard on millions and millions of americans. I know you have been thinking a lot about this issue. I want to ask you directly, is it accurate to say that our economy is healthy when there are serious racial gaps in how americans are doing . Powell i think that is a longer run weakness in our economy. Even when our economy is healthy, we have longer run issues and that has been with us for a very long time. I take it you would describe this as not a healthy economy . Powell that is not a healthy feature of our economy. Sen. Warren thank you, mr. Chairman. I appreciate you focusing on this issue. This crisis has hit communities of color the hardest. They have faced the biggest decline in employment and they have faced the largest propulsion proportion of death from covid19. The minute job start recovering for white americans, we cannot just say, that problem is fixed and start cutting off help for people who are out of work. Senate republicans are eager to help eager to let this help expire, we still have more than 20 Million People out of work and the Unemployment Rate is going up for black americans. Inequality is not something that happens on its own. It is the result of policy choices. Who we decide to help and whose pain matters. Congress can help those who need it most by reauthorizing expanded unemployment and by doing it now. Thank you very much, mr. Chairman. Powell thank you. . Senator metallic thank you, mr. Chairman. I would like to talk about back in arizona. We are seeing the economy is starting to recover somewhat. There is concern for businesses in every sector with revenue down, rent and mortgages not being paid, it really crosses many sectors. In the 2008 crisis, arizona was hurt deeply and is very concerned in monitoring what is happening. It pretty much goes across many industriesyou mentioned you areg this, but you are not as concerned as before. Could you elaborate on that and is there any consideration about a real estate focused facility in order to be able to help out in this area . Would say that like other companies, real estate related companies are eligible to take part in our facilities. Thatnt to the fact commercial mortgagebacked securities are eligible assets for massive loan facilities. Any company of any facility we do not target facilities towards individual indices so much. But you mentioned earlier in response to senator rounds that you are monitoring this element of the economy and you had concerns a few months ago but less concerns now. Could you elaborate more on that . Chair powell i was talking about residential mortgages. Mortgage servicers forbearance happened in the cares act and the Mortgage Services were looking for large liquidity requirements and the question was will they be able to address that problem. Steps were taken by the housing regulators and there was a heavy wave of refinancing with lower mortgage rates. Those concerns we had a couple of months ago have been alleviated a little bit. We are still monitoring the situation carefully. That is very much about residential mortgagebacked securities. Thanks for that clarification. A followup on what senator tillis touched on at the end. In arizona, the travel, lodging, the tourism has been hit hard and concerned about their slow recovery. What are you seeing in this sector and unemployment and consumer spending, and is there anything within your Agency Authority to help this, or will you go back to the overall facilities . This is a specific sector that has been hit hard, the lack of tourism and travel. Chair powell very hard. It is airlines, it is any kind of travel. Dependsy business that on what happens to you because of the pandemic. That is the way weve approached this. There is no question. That is where a lot of the layoffs are in those Service Industry companies. What we have done is created these facilities and we look back to the Financial Performance of the potential borrower before the pandemic. If you are in reasonable financial shape before the pandemic, and in principle you can be ineligible borrower. We will not look at what happened to you because of the pandemic. That is the way weve approached that. Thanks. On a different note on page six of the Federal Reserve Monetary Policy report, there is a graph that shows Unemployment Rates among several demographics. Africanamericans, hispanics, white, asian. We have 22 native american tribes in arizona that have been very hard hit by the pandemic. About 300,000 individuals. A pretty significant percent of arizona. Is your Agency Tracking any data on native americans and if so what are you finding, and if not what you commit to helping with this Important Community that needs help right now as well . Chair powell we do keep very good track of all that, particularly the Federal Reserve bank of minneapolis has a specialty in that area. We will be happy to work with you on that. I do not have the numbers on the tip of my tongue but it is a focus for us. Thank you. To wrap up, what is your level of optimism. Arizonans are struggling. They are getting back to work safely. We are still having to manage this pandemic. What is your level of optimism of the recovery . Run, i amll long confident we will have a full recovery. I am confident of that. Is we have thet largest economic shock in living memory and the economy will recover from that, but we have to be patient. He will see people moving back over the coming months. A lot of people come back to work, but therell be a significant number of people who do not go back to work because they are in those industries we talked about, and that is where therell be less employment. Those people will need help to get back to work, and over time we would get back. As most forecasters believe, it will take some time to get back to where we were. Will we get there . Absolutely. Thank you, mr. Chairman. Chairman, and thank you chairman powell for all of the work you are doing. I want to go back to the letter senator warner referred to from chairman ben bernanke and janet yellen and many other economists that say the fiscal stimulus from congress, the next stimulus must be large commensurate with the 16 trillion output gap our economy faces over the next decade according to the cbo estimates. Without asking you to commit to a dollar amount, is there a bigger risk for our economy that we provide too little support or that we do too much . Ther powell i saw headline. I have not seen the letter. I do not know what is in the , iter the former chair wrote would say this. The fiscal response was largest and the fed response was largest. 4 of gdp it is a question we have to answer. Is that enough. I would say there is a reasonable probability more will be needed, both from you and from the fed. I would also say the things you already past are having a positive effect. We should see a lot more of that Going Forward. , are youht of that starting to reconsider, is the fed starting to reconsider its understanding of the relationship between deficits, inflation, and growth . Are weowell reconsidering it . I do not think this has changed thinking on that. The thing about inflation is there is been downward pressure on inflation around the world for a couple of decades. Formodels would have called higher inflation and higher Interest Rates. We do not see either of those things. We are not working on the inflation that higher is a likely outcome. We know what to do if there is higher inflation. At least in the near term and as far as we can see, what we see is a short run inflation. Thank you. In your modeling, what assumptions are you making about covid rates over the next several months . We look atl different scenarios. We look at a wide range of different scenarios. We model a scenario where there is a second wave, and we model a scenario,a baseline where essentially covid rates come down over time and there may be regional outbreaks and that kind of thing, but we do not have a Second National level. We look at different scenarios. Can we drill down on that . We can take this offline and i will issue a question for the record. It seems to me the data changes day by day and one of the things you said in earlier testimony was that a lot depends on covid rates. Tweak fiscal and Monetary Policy but a lot of this depends on the virus. I want to understand where your inputs, just as we consider our fiscal policy. I wrote you a letter asking you to suspended dividends and you said you are conducting Sensitivity Analysis of Current Conditions to decide whether to suspended dividends. I am wondering why youre conducting an analysis only of Current Conditions and not testing whether banks can handle a serious adverse scenario Going Forward since that is quite likely . Chair powell that is exactly what we are doing. That question is at the heart of our stress testing, which is about future highly stressful scenarios. That is precisely what we are in the middle of doing. What is your timeframe for a decision on the suspension or dividends . Chair powell we will be announcing the results of the stress test on june 25. Thank you. Thank you. Senator kennedy back with us . Moran . Us senator moran . Senator kramer . In. Am happy to step chairman powell thank you for being with us today. You and i have talked a couple of times about my concerns about blackrock having such a central role in facilitating the Financial Support of businesses that are part of the cares act, and specifically the concerns ive raised relevant to the potential investment in energy, particularly the oil and gas industry in my state of north be an and what seems to excessive standard they have applied in terms of climate. That is just one factor, and you and i had a good discussion. You assured me of their limited role. However, in recent days or weeks , ive become even more concerned about that standard, their standards of climate investment. A different standard for Chinese Companies. Companies that do not meet the same enforcement demands, that do not have the same accountability and transparency, particularly the pc aob for public companies. It is an issue that has caused senator mix sally and i to csally and i to send a letter to the ceo in light of what i think is a double standard and how they treat investment in Chinese Companies versus americans. In light of the deference blackrock appears to provide the Chinese Communist party as well as radical environmentalist active investors, should i be concerned about their role in the cares act . Thisou give me assurances part of blackrock will not impact the public funds and the Public Interest in keeping our particularly our gas industry vibrant, and the Important National security they provide. Chair powell i would say there is no reason to be concerned. They play in administrative role. We set all of the policy decisions in our facilities. They are just our agent. They bring particular skills we do not have and that they do have. That is what this is about. I hope regulators are listening. Have a lot of work to do on our side to make sure we create a standard that protects americas investment in those same companies. Appreciate your assurances. With that i will yield my time. Mr. Chairman, this is john kennedy. I am on now. We will go to senator van hollen next and you will be next after that. Senator van hollen . On, we will go to senator masto and then dup would and then do you. Chairman powell, thank you for all of your good work. Appreciate the action by the Federal Reserve to respond to the covid19 pandemic that has infected more than one million americans statewide. Thato agree with you congress and the president must agree to act. Our work is not done. We have to continue to invest in our families and businesses and local governments. Let me talk to you. Im from nevada. We have had this conversation before. Let me give you the statistics. Travel industry, which includes hospitality, restaurants, has been one of the hardest hit. We said that already today and i know we have had this conversation. Travel is our nations seventh largest industry in terms of employment for this crisis. Nearly four in 10 of all jobs caused by this crisis have been in the travel industry. The travel industry Unemployment Rate is 51 , twice the national Unemployment Rate during the great depression. For some this is nine times worse than the Economic Impact following 9 11. In nevada, 25 of our workforce is employed in the hospitality and entertainment industry. We have had more than 400,000 people file for unemployment. Weare at 20 rate percent are at 28 unemployment, the highest percentage of unemployment in the country. The ability to go back to work with limited travel will declined by half 1 billion in 2020. Is there more the Federal Reserve can do within its existing authority to help the travel, tourism, and hospitality sectors . What else can be done . What else should you be thinking about . We will be the last to bring back in this economy. Chair powell obviously nevada is ground zero for this with its entertainment, its travel, restaurants, bars, all of the things that are most directly hit. Many of them, anyway. What we can do, other than support the economy as a general matter, our 13 three facilities are the tools we have. Any Nevada Company that meets the eligibility requirements for our facilities is welcome to borrow, and that is the tool we have. We do lending, not spending. We can lend to solvent borrowers who can service a loan and the servicing requirements are not terribly strict. We look back to last years financials. We will not disqualify a company because they have been affected by the pandemic. That is what we have to offer. And i have heard this before and im curious because it is something i am hearing does the Federal Reserve take a stake in a company to litigate to mitigate potential solvency problems . Chair powell we cannot do that. That helps clarify. We also know government job loss has totaled about 1. 5 million and there are more on the way. The National Governors association requested 500 billion in aid to state and local government. States, whato levels of unemployment with the fed see . Chair powell chair powell i do not have a specific projection, but effectively all states have balanced budget requirements. What they do when they see revenues drop in costs rise, which is what we are seeing, what they do is they lay people off, they cut essential services. Both of those things can weigh on economic activity, in addition to the human cost of those things. We do not play a role in advising congress on specific fiscal policy, but i do think state and local governments are major employers and they provide essential services and that is an area worthy of your interest. I know my time is running out. Let me ask you one final question. With the fed consider making changes to the Municipal Liquidity facilities that would be able to provide more assistance to local governments . Chair powell you went out for a second joint the municipal facilities on the municipal facilities, we have repeatedly made adjustments. If you have a specific ustment in mind turn it into a grant. Chair powell we cannot turn it into a grant. We can only lend. It is you who can make into a grant, congress. If congress were to go down that route, would you have concerns . Chair powell if Congress Wants to make grants, that is entirely congress decision. Thank you. Senator kennedy . Unmute, senator kennedy. Youve got me . Chairman,an, both mr. I apologize for being late. I was at another hearing. If these questions have been asked and answered, if you could give me short answers i would appreciate it. I do not want to belabor this. When will the main Street Lending program be ready, mr. Chairman . Chair powell it is open now for lenders to register and once they register they can start making loans, and we encourage them to do so. In terms of demonstrating credit worthiness, have you made a decision about using rating agencies other than the big three or four . Chair powell yes we have. We have looked carefully at all of the rating agencies, we admitted three additional ones and the criterion was they have a record of significant experience and usage in the private sector so investors rely on them and the answer is there were three in different areas so we added them. Have you made a decision about the minimum amount of the loan . Chair powell we have. And main street we have lowered it to 250,000. We are carrying that over into the nonprofit part. I think that is a positive development. How big is the Federal Reserve Balance Sheet right now . Chair powell just a touch over 7 trillion. How big was it at the end of december . 4 trillions. Low how long do you think it will take to reduce the size of that Balance Sheet to something that is not otherworldly . Chair powell [laughter] that is an interesting standard. I think when the time comes and the crisis is over and we are not purchasing assets at this kind of pace, what we will do, that will be sometime out, but what we will do is what we did in 2014 to 2017. We just froze the size of the Balance Sheet, and as the economy froze, the Balance Sheet shrinks as a percentage of the economy. That was a peaceful period during which people worried about the size of the Balance Sheet, but it declined from 25 to 17 . That is some years away but this is probably the way we start. I cannot see the clock. How much time do i have left . You have two minutes. Chairman, none of us can predict the future. Is estimated to take a real hit this year, as you will know. The Intelligence Unit of the Economist Says we will have a gdp drop this year of about 4 . They are projecting europe will be even worse. For are projecting about 9 , iat britain, 9 for france think 6 for germany. Can we recover if the european union, one of our biggest trading partners, takes much longer for themselves to recover . Chair powell a weak global economy, a weak european economy will weigh on u. S. Activity. They are great area for exports and trade of all kinds and also europeans, and spend money on tourism a lot. Being in washington we see it all the time. Weakness around the globe does hurt the u. S. Economy. You, mr. Chairman. I will yield back my time since i went way over. You are a gentleman and a scholar. Hereor van hollen, are you . How about senator jones . Thank you chairman powell for. Eing with us thank you for all youve done. It has been extraordinary. I want to thank you for your comments about the systemic racism we see in america. My colleagues, three republicans and three democrats at 3 00 today will be reading dr. Kings letter from a birmingham jail in its entirety. 1963 isthe message of as important today as it was then. I know we focused a lot on the data and how it has affected minorities in this country, particularly our black population. The latest data showing the black Unemployment Rate at just under 17 . Hispanic Unemployment Rate at almost 19 , while the white Unemployment Rate hovering around 14 . Bloomberg has reported africanamerican owned businesses declined 41 from february to april, representing 440,000 businesses. A stark contract to the 17 drop we have seen for white owners. Cnbc declared we have a housing apocalypse coming before us. Alabama Legal Services who does so much for poor and needy in alabama, particularly in housing, has said the avalanche of evictions is here, and foreclosures are not far behind. I want to focus my questions on our minority communities and underserved communities. Instead of the overall economy. To minoritye Risk Communities see if Unemployment Benefits are not extended . Minorities are substantially overrepresented, likecularly something 25 Million People have had their employment disrupted as a consequence of the pandemic. Arehat group, minorities very much overrepresented. All measures that help that group help them, and all measures that do not help them make life tougher for them. Measures that we can keep people on the payroll and make know thishave, and i has been a concern for folks if there is no incentive to stay off the payroll. Some transition to where we can provide incentives to get back on payrolls, to get back to work, you would favor that, i assume . Not takeell we do positions on particular aspects of policy, but i would say this. There will be a lot of people going back to work in the coming months. Therell be a lot of people who cannot because they work in nevada. In the travel and entertainment industry. There will not be jobs. It will be a while. I think some form of support for those people Going Forward is likely to be appropriate. During the Great Recession i think Employment Unemployment assistance was reauthorized on a number of occasions. Not only can they not go back to their old job, but there are no jobs in that industry and it is tough for them, at least for a period of time to give them support and balance that with incentives to get back to work. Question with regards to the minority communities, with regards to businesses. Minority Business Owners face enormous risk as it is, even before the pandemic started. The same question. What are the Downside Risks for our minority businesses if overall business is not extended by congress . Chair powell as i mentioned during my opening remarks, the Small Businesses of america, that is where the jobs are not on net, and we do Business People are going in and out of business all the time. What you do not want is a wave of avoidable insolvency which will weigh on the economy for years. That is all the more so true of minority businesses because of the Important Role they play in our economy and in their communities. Again, focusing on minority communities, if renters and homeowners are not helped with extended eviction moratoriums, what effect will that have on our minority communities in america . Chair powell evictions and foreclosures and things like that have well documented negative impacts on peoples lives. I think during the pandemic, which is still ongoing, it is particularly important because you wind up sleeping in somebody elses basement or in a shelter or something. It is not a good time. There are ways to avoid that and keep people in their homes while the economy recovers and while the pandemic is dealt with. I think those are things well worth looking at. Thank you chairman powell. Senator purdue . Thank you, mr. Chairman. Chariman powell, thank you for being here. It seems like you were just here. Thank you for your leadership. What the fed has done to provide liquidity has been historic and has helped us avoid a major meltdown. , the questionion i ask you the last time about the Balance Sheet. Treasury debt has increased 2. 9 trillion, and a lot of that is in the last few months, mostly due to the cares act. Im concerned about how we are financing it. For example, in the month of april, the treasury issued 1. 4 trillion of new debt, 440 billion dollars was absorbed by the domestic market, and the foreign market has held steady but the balance was taken up by the fed. I do not know how long we can do that. The question is are we not effectively i hate to use the term monetizing the debt. This current pace, will demand ever catch up or will we have to think about it rebalancing at this point . That is not our intention. The very high level of treasury and mbs purchases we affected in march and april was because the markets had stopped working, and treasury markets, the most important Financial Market in the world. The primary dealers and the bank Balance Sheets were full and everybody wanted shortterm cash treasury obligations. They did not want treasury bonds. There were no buyers. It was a very difficult situation. Was nothing about meeting u. S. Supplies, and treasury debt is an attractive asset around the world. Theres a lot of demand for paper. Really it was about market function. There was a positive effect on financial conditions because you are taking longduration assets out of peoples hands. It has positive effects at this time and those are