Forward with this, wed certainly be looking at that as a characteristic to achieve. Thank you and i think it goes back to resiliency for me. And i know and i think its the concern about resiliency that i had, and we had our discussions here in committee is that if there are concerns about resiliency and its just based on my experience in the private sector when it comes to big data, couldnt you probably address those concerns through the regulatory and Supervisory Authority that already exists in your space were talking about resiliency with the multiple data centers that could be a problem with interoperability do you think resiliency could be something thats a function of what youre doing now and keeping with one faster time Payment System i think im done the gentle woman ms. Pressley is now recognized for five minutes. Thank you, madam chairman and chairman powell. The Federal Reserve can do more to support the needs of hardworking american families. Working families wait days at a time just to have their checks clear. When you were living paycheck to paycheck and rent is due the 1st of the month there can be no room for error as a central bank in america, the Federal Reserve has a responsibility to speed up the process of clearing payments i want to bring up a report issued two years ago, the Faster Payments Task force. In that report, the task force called for a Payment System in the United States that is faster, ubiquitous, broadly inclusive, safe, highly secure and efficient by 2020. Mr. Chairman, 2020 is less than six months away. Yes or no, will we have a faster Payment System by then no. Were working on it, but were not going to be done by 2020, i would say. But were getting there. The task force also concluded that broad access to Settlement Services will help level the Playing Field and enhance Competition Among providers of faster payment services. Yes or no, do you agree this is an issue of accessibility and equality i do agree with that. Thats one of our principal motivating factors would the fed like to see a world where all americans have access to faster, secure payments yes, we would thats why weve been working on you mentioned this report. Its a project thats been going on for five years. If you can instantly clear payments between the accounts of commercial banks held within the fed, why not consumers writ large . Whats the delay its a service that hasnt existed. Its existed for banks, immediately available funds has existed for banks. We really we dont have Plenary Authority over the Payment System as some other Central Banks do, but we convened a group of people and institutions maybe five, six years ago and said lets work toward this. And so thats the report you saw was, i think, the last report that we issued im working to implement some of the recommendations. Yes, mr. Chairman, just trying to better understand the delay in the implementations of this report. Have you received any pushback from any businesses, particularly the credit card industry you know, i think were determined to do what we see the right thing as were not looking have you received any pushback from the credit card industry i have not personally, no i think that businesses to advocate for their own wellbeing, though sure. Do you agree our countrys continued lack of a realtime payment same is being exploited by Credit Card Companies like mastercard and visa and also outside of that industry by facebook to create a Digital Currency i wouldnt want to use those terms, no. I think people operate in the environment that they have were trying to create an environment sdhthat does have faster payments broadly available. I really do see a faster Payment System simply as a public good. And the lack of action here creates a real void in the lives of consumers everywhere. And these voids are increasingly being exploited by Companies Looking to operate as Financial Institutions without the guard rails. Facebooks libra is being discussed. Instead we should be using preexisting infrastructure to ensure that all people have the ability to safely and securely and with no cost access and move their money 24 7, 365 days a year so again, lets not lose sight of the plot, mr. Chairman, and the plot is the american people. I hope to see your organization become more reflective of the lived experiences and the Everyday Needs of americans. Thank you. And i yield back thank you the gentleman from wisconsin, mr. Duffy, is now recognized for five minutes thank you, madam chair. Mr. Chairman, up on your lefthand corner, welcome. One of my colleagues in the statement said that the president has implemented harmful economic policies. In your assessment, i think you have said the economy is doing quite well is that correct . Yes, id say the economy has performed i said reasonably well so far this year. Last quarter was 3. 1 growth. Pretty great, isnt it you know, the if you take it through the middle of the year, well have growth probably in the mid2s. Yeah, thats a solid performance. Okay. Great. Where i come from, obviously, we like our Rural Communities to grow as well as our urban communities, but, by and large, the biggest complaint that i hear from my employers is that they dont have enough labor they cant get people in to their shops to fill the positions that are open. And then theres some that will come in, and they dont actually want to work which leads me to immigration, but im not going to go there with you we had some problems on immigration. But theres competition for labor. And when theres competition for labor, dont you see the salaries rise, hourly wages rise when theres competition for labor . Yes or am i wrong on that its very interesting weve seen wages moving up, and we do hear lots of reports like what you just said about labor shortages and cant find qualified people we would have expected to see wages move up more they are moving up at a healthy level on average a little more than 3 . Thats a good thing. Yeah, youd want a tight labor market to produce solid wages. Is this a fairly tight labor market it is by almost every measure. I would say that the thing that doesnt really show the tightness through is the wages, which could be higher. In a tight labor market, if i have a person making 12 but theyre worth 15 an hour, wn e, they should be earning 15 an y because everyone is looking for labor. If a guy is making 15 bucks an hour but maybe only worth 11, what happens well, might get fired, right . Yeah. Or might automate so the marketswork to pay people the value of the services thatppens in a tight labor mark, which i know you wont make the point on 15 minimum wage, but my concern is that if we increase that too high, and we have people who arent worth arent at a value of 15 an hour, theyll lose their jobs and fall into deeper despair thats my concern. With regard to im switching gears. With regard to trade, i youre not commenting on the policies of the president with regard to trade, but you look at our longterm horizon. Youve mentioned debt and the problems were going to have with regard to trade, if we have countries that will steal our technology, so you have a company that invests 500 million in a new technology and someone steals it from you and just has to pay a hacker in a basement and then come to market with the same product at zero cost versus your 500 million, how do we compete in the long run with that environment or if you have a country that manipulates their currency to make sure we cant have some equilibrium with regard to our trade. How do you deal with countries like that but for the policies the president has pushed those are entirely appropriate considerations for those who have responsibility for trade policy would it concern you for the longterm health of the American Economy if people are stealing our technology, are cheating us, manipulating their currency . Would that concern you i have to say, we are very unusual in the democracy that we have this independence, that we to do our jobs and i think that means we need to stay in our lane. I try very hard not to get pulled into things that were not responsible for. So im just going to have to say that so with regard to someone mentioned corporate greed. We want to see companies and individuals behave responsibly and honorably, but we also want them to make a profit, right do you have an objection to companies and individuals making a profit, making money well, we do have a marketbased system. And if they make too much, is that a problem for you its not if so, how much is too much not for us to judge okay. So you do you support a market economy you think its a good thing . I think our economy has been market based, and i think thats served the public well and probably the greatest economy thats existed on the face of the earth. Fair to say . Yeah. Okay. I yield back ms. Ocasiocortez, from new york, is recognized for five minutes. Thank you, madam chair, and thank you so much, mr. Powell for coming in today. The Federal Reserves mandate, one of their mandates is to maintain price stability and maximum employment is that fair to say . Yes and a lot of folks would interpret that as meaning to aim for the lowest Unemployment Rate possible without runaway inflation, correct yes generally. So i kind of wanted to dig in today with you a little bit about this relationship between Unemployment Rates and inflation. In early 2014, the Federal Reserve believed that the long run Unemployment Rate was around 5. 4 in early 2018, it was estimated this was now around lower, around 4. 5 . Now the estimate is around 4. 2 . What is the current Unemployment Rate today 3. 7 . 3. 7 . So what we had previously thought of, perhaps as far back as 2014, as the long run Unemployment Rate is around 5. 4 were currently experiencing 3. 7. Lower than that estimate but unemployment has fallen about three full points since 2014 but inflation is no higher today than it was five years ago given these facts, do you think its possible that the feds estimates of the lowest sustainable Unemployment Rate may have been too high absolutely. So we overshot in what our longrun Unemployment Rate is . I think weve learned, as you pointed out i think weve learned that you cant identify this is something you cant identify directly. Its lower than we thought substantially lower than we thought. And ive been seeing lately that economists are increasingly worried that the idea of a phillips curve, that links unemployment and inflation is no longer describing what is happening in todays economy have you been considering on that what are your thoughts on that very much so. We spent a great deal of time on that the connection between slack in the economy or the level of unemployment and inflation was very strong, if you go back 50 years. And its gotten weaker and weaker and weaker to the point where its a faint heartbeat that you can hear now. Its still there you can see it at state level data and things like that. But i think we really have learned, though, that the economy can sustain much lower unemployment than we thought without troubling levels of inflation. And i think we i would look at todays level of unemployment as well within the range of potential estimates, plausible estimates of what the natural rate of unemployment is. So why do we think that were seeing this decoupling in a relationship that we had seen in the economy decades ago . Its one reason is just that Inflation Expectations are so settled that and thats what we think drives inflation for example, when unemployment went way up, you didnt see inflation go down. Right so you dont see inflation reacting to unemployment the way it has because inflation just seems to be very anchored. Do you think that could have implications in terms of policy making that theres perhaps room for increased tolerance of policies that have historically been thought to drive inflation or increase inflation . One of the arguments about minimum wage or other policies that directly target middle class americans is that they could drive inflation. Do you think that that decoupling is something that we should consider in modern policy considerations yeah, i think we again, i wouldnt want to get into the minimum wage discussion directly, but i think weve learned that inflation, that really downward pressure on inflation around the globe and here is stronger than we had thought. You see countries all over the world not getting being below their inflation targets. Whereas when i was young, they were always above. Now theyre below. The United States has done better than other countries but were still below our target i have one last question. Earlier, you had suggested that in the event of a recession or contraction, we would like to see more fiscal policy that supports Monetary Policy can you further articulate what some of those fiscal options and considerations should be in terms of specific options that we should consider i was referring really to severe or significant downturn if that were to happen, then i think it would be important that fiscal policy come into play, and so there are automatic stabilizers that happen, but, in addition, things were done at the beginning of the financial crisis in terms of spending increases and tax cuts that help to replace the demand that had been lost in the private sector and get us through a really rough patch. Something like that. But those are things i would reserve for pretty severe downturns. Thank you very much thank you mr. Barr, the gentleman from kentucky, is now recognized for five minutes thank you madam chairwoman and chairman powell, welcome back to the committee. Let me first just say, i appreciate my colleague from new york recognizing the strong trump economy has not produced inflation challenging the credibility of the phillips curve. Let me also say, without quibbling about the details, i think youre doing an outstanding job, chairman powell and i want to especially appreciate the much improved communications with congress about the direction of Monetary Policy and so i do want to take up this issue of fed independence because so much has been made in the media of president trumps criticism of fed policy in recent months and his reference to quantitative tightening, his criticism of socalled quantitative tightening, as you will recall. Many members of this committee, especially on this side of the aisle, criticized your pred cessors for overly accommodative Monetary Policy for an extended period of time socalled quantitative easing. And so what i want to just say is that my view is that all of this feedback from both the executive branch and legislative branch is a necessary and constructive part of oversight and is simply part of holding the fed accountable. And that it in no way compromises fed independence since you and other governors are given 14year terms with a provision that makes you removable only for cause do you agree or disagree with that i would just say it this way that were completely and totally focused on carrying out our jobs and nothing really will distract us from that. Our accountability and our system really does lie with this committee and with the other committee on the senate side so you have oversight over us, and a lot of other systems, its the finance ministry in our system of government, its congress. My only point is that criticism from congress or the president does not, in my view, in any way, compromise your independence mr. Chairman, i heard economist Arthur Laffer say over the weekend the fed doesnt set Interest Rates that it follows Interest Rates i thought this was an interesting comment, especially in light of low longterm rates and the inverted yield curve has the case for lowering the Feds Fund Rate strengthened because the fed is following rates as opposed to setting them i wouldnt say that i didnt see that comment so i cant react to it. But i wouldnt say it quite that way. Our focus is on real economy values in particular, maximum employment and stable prices we use our Monetary Policy tools to achieve that. And we know that our policy works through Financial Conditions so we look at a broad range of Financial Conditions they do matter for us. What really matters is if there are big changes in Financial Conditions and they are sustained for a period of time where are we today in terms of the proximity of the fed funds rate to the neutral rate thats another one where it we can only estimate the neutral rate as you well know. And its interesting estimates of that have come down as well. I would point out that we published the medians of it in our summary of Economic Projections every quarter. We publish the medians of the committee. And that number has come down by 50 basis points since september of last year so the median estimate is now 2. 5 nominal, which would be about 0. 5 real. And whereas it was 3 back in september. So were learning. Were always learning about the natural rate of unemployment and about the neutral rate of interest and right now, understand that it is estimated within fairly broad uncertainty bounds as you know, ive been critical of previous fed positions or policy that i would characterize as overly improvisational. As you communicate and forecast where fed policy is going and you talk about in your testimony that the case for a more accommodative policy, that argument is strengthening. I appreciate that because i think its habituating the markets as opposed to surprises. Thats very important for the stability of our Financial System last question, you, obviously, cite in your testimony uncertainties in trade developments as perhaps one of the reasons why the case for policy has strengthened in raent months what would passage by the congress of usmca, and enactment of usmca do in terms of the Overall Economic outlook and future trajectory of Monetary Policy i think it would remove uncertainty about our trade policy with mexico and canada, to have that pass. And i think that would be a positive thing of course, i wouldnt comment on the particular merits of it. It wouldnt be appropriate but the passage of it would remove uncertainty, and i think that would help in the current environment. I do have actually one final question and that is, you responded to my question about the gcip surcharge and said a propose tool simplify capital requiremen requirements, where are we on that moving forward. Working on it. Working on thank you i yield back the gentle woman from virginia is now recognized for five minutes thank you, madam chair, and change you, chairman powell for joining us today chairman powell, do you think that the u. S. Should go back to the Gold Standard for our currency let me say, i wouldnt this could feasibly be considered commenting on a particular nominee who has recommended that and, of course, i would not do that. I will answer your question, but i want to make sure this isnt interpreted in that way. So, no, i dont think that would be a good idea the idea would be congress would have to pass a law and that law would say our job with Monetary Policy is to manage the level of the dollar stabilize the dollar price of gold wed then not be looking at maximum employment or stable prices and there have been plenty of times in the fairly recent history where the price of gold has sent signals that would be quite negative for either of those goals. So i dont think thats something that would be attractive no other country uses because its much more volatile to linking it to gold would be very volatile or could be . Its really that its not connected to or youve assigned us the job of two direct real economy. Maximum employment, stable prices if you stabilize the dollar price of gold, Monetary Policy could do that, but the other things would fluctuate and we wouldnt care. That wouldnt be our job anymore. And thats not a positive mission for the fed . Sorry youre much better mission for the fed is what youre doing right now . This is why every country in the world that abandoned the Gold Standard some decades ago and that reluctance or that desire not to go back to the Gold Standard is something that you have in common with the ceos of the seven of the worlds globally systemic important banks who were before us in april and said the same thing. But it is worth noting that last week, the president nominated judy shelton for a seat on the fed. And she is similar to two of his other wouldbe nominees in that she does favor a return to the Gold Standard. So i assume from your earlier answers that you dont share that view. I dont share that view, but i would never comment on the views or any particular nominee. We do not play a role in the nomination process its totally up to the president and the senate in that and we just are completely on the sidelines there. Okay. My concerns about ms. Shelton are not just her questionable views about Monetary Policy, but she also seems to be, by most accounts, a political opportunist who thinks low rates are bad under democratic president s and good under republican president s. And that i would caution concern when looking into the nomination and confirmation of this candidate. I do want to talk about debt there have been a lot of questions about it in particular, the debt ceiling. On monday, the Bipartisan Policy Center projected that the u. S. Treasury could run out of money by Early September if congress doesnt raise the debt ceiling and thats actually because the government brought in far less in Corporate Tax revenues than less this year than was projected as a result of the tax cuts because, you know, spending is only one side of the ledger, right . We need to look at the revenues. And theres a possibility that the u. S. Could default on its debts. What would our what would congress failure to raise the debt ceiling, what would that mean for the u. S. Economy . I so i think its essential that congress raise the debt ceiling in a timely way so that the United States continues to pay all of its bills when and as due. I think any other outcome is unthinkable. Weve never failed to pay our bills when due, and so i assume and believe the debt ceiling will be raised in a timely fashion. What would it mean for the economy and for Interest Rates if we fail to do so . I think it would be very uncertain territory if the United States were to stop paying its bills it would be i wouldnt be able to capture the range of possible negative outcomes from that the loss of confidence in our ability to run our fiscal house could be substantial it would be a lot of uncertainty. And i just think its beyond contemplating that and yet we must contemplate it, mr. Chairman thank you. And i agree and want to encourage leadership on both sides of the aisle and both chambers of congress to not wait until the last minute to make sure we raise that ceiling thank you. I yield back thank you the gentleman from texas is now recognized for five minutes. Thank you, madam chair. Chairman powell, the boards done a great deal of worg with regard to foreign banking organizations, but im concerned theres a lack of harmonization across jurisdictions with respect to these foreign banking jurisdictions. And i just want to make sure that you all are working to ensure that our u. S. Firms are not disadvantaged in the foreign marketplace and could hear a little more about your plans for that so i think here we want to give National Treatment equal treatment to foreign institutions and we fully expect and anticipate that we will get that from in foreign jurisdictions. Thats why we give it here unless we want foreign institutions to come in and do business here and lend capital to people and take part in the capital markets, that only helps our economy and we want our institutions to take part in foreign economies. Many banks work across National International lines now. So it is essential that there be fair treatment for nonnative banks all around the world thank you i appreciate that stance also on your written testimony, you mentioned trade tensions and slowed Global Growth as potential threats to the u. S. Economy. Between these and the debt ceiling and the lack of consensus in congress, what would you say are your biggest concerns out of those . Out of those, i really think that the most important thing is the what weve been calling the crosscurrents, which are the really trade tensions and concerns over slowing growth, Global Growth around the world those are interrelated theres a box in our Monetary Policy report that i recommend to you about slowing Global Growth and manufacturing and investment which is something were seeing not just in the United States but around the world. And that is the thing that weighs on our outlook. We see it here we see weak manufacturing here we see confidence surveys among businesses and fortunately, the consumer part of the economy is doing very well. But thats where the weakness is and thats where the concern the other things are concerns, too, but i would put those at the top of the list, along with low inflation. Thats a concern thats the other half of our mandate. And we concerned that inflation not run below 2 more persistently than we thought it would. So putting all that together, the current state of the economy, where you see us going, on a scale of 1 to 10, how would you rate where we are with respect to an economy, one, being bad, ten being great i dont think ill give you an actual grade, but i will say this we are in the 11th year of this expansion. Thats a first since we began to keep records on this. Were at 3. 7 unemployment thats a 50year low 50year low. Weve been there for 15 months and theres no reason why that cant continue we are committed to using our tools to make sure that it does continue and i just would again point out that this expansion is now reaching groups that hadnt been reached in the first few years and theres a box on that as well in the Monetary Policy report all the more reason why its so important that we keep the expansion going to the maximum extent we can. I agree with you. And i thank you, and i yield my time back. Thank you, madam chair. Thank you for convening the hearing. Mr. Powell, thank you for being here for your thoughtful testimony. And you and the rest of the board of governors have a very monumental task. And youve made some good decisions. And im also heartened to see that youre maintaining your independence and not allowing yourself to be bullied let me just put a couple of things on the record weve had a lot of discussion here about the cbo report and minimum wage and i just want to add Something Else to the equation and that is that, yes, theres been some discussion about losses, but i think we need to consider the fact that raising the wage will elevate 27 million lowwage workers and we really need to be concerned about the fact that so many people are really living at the poverty level. A lot of those folks live in my state of north carolina. So when we look at the fact that were going to raise people up, when we look at this 15 that we keep hearing about, ive done the math on it and its like 1. 55 a year but anyway, let me move on, having said that, to a question about the unemployment inequality in terms of black unemployment the overall Unemployment Rate is about 4 the Unemployment Rate for africanamericans is about almost 7 . In this recent bureau of labor statistics report, which almost doubles the Unemployment Rate for whites, which is about 3. 5 in the same report let me and these Unemployment Rates have been steadily falling since 2011 so what if any analysis does the Federal Reserve do to evaluate the degree to which economic inequality affects the africanamerican employment rate affects the africanamerican employment rate . As a feature of our labor markets, africanamerican unemployment has often run at double and so that means it comes down faster when times are good and goes up faster, twice as fast. So thats not its not a good feature of our employment market thank you so what more do you think can be done to ensure that unemployment among minority groups gets as low as white unemployment, and what role can the Federal Reserve play, if any, in reducing those disparities the tools that we have, and actually theres a box in the Monetary Policy report that talks about different its not by africanamericans its by Different Levels of education, which we can show you. But it does talk about the disparate outcomes for people. In terms of what we can do, i think, again, it goes back to taking seriously the job youve given us which is maximum employment so we are seeing, at this in these tight labor markets, were seeing communities that are being reached by the jobs market in a way they havent felt really ever. Or certainly very long time ago when we had 3. 7 unemployment. It was the late 60s right which you and i can remember. Absolutely. Not everybody here can. Thats right. Im a child of the 60s. Im a baby boomer, and i do remember that. What is supposed to come out of the Monetary Policy review that happened earlier last month . Were there any important takeaways, and will there be changes to the way that you and the board conduct the Monetary Policy because of this review . There may be changes. We havent decided that yet. Were just into the phase of taking a close look. And were really looking at the question, are there ways we can change our toolbook box or strategy or communications that will enable us to better serve the public and one of the key motivators for that is that rates are so much lower were closer to zero that means we have less room to cut. And are there ways we can people have been thinking about this problem for more than 20 years. We want to get the best thinking and come out of this with the best ways to serve the public with our toolkit we may make changes, but that discussion lies ahead of us. Great thank you very much for your service and, again, thank you for not allowing yourself to be bullied. I think thats just really important in terms of the job youre doing madam chair, i yield back my time mr. Williams, the gentleman from texas, is now recognized for five minutes thank you, madam chairman, and thank you, mr. Chairman for being here today and just as a reminder, im a Small Business owner main street america. And very much interested in what is happening with the fed. I want to also reiterate my past statements about Interest Rates. Even the slightest changes can have significant impacts on many parts of the economy we both remember a time when Interest Rates were 20 , and the principal balance for these rates was relatively low and when a new car costs 6,000 in 1970s, now the same vehicle can be 60,000 and with this principiple so high, just sligh raises to the Interest Rate can hurt businesses. Weve discussed this before but i want to commend you for having a good pulse on the economy and making the appropriate Interest Rate adjustments so before i begin my questions, i want to make sure nothing has changed since you last came before this committee. Are you still a capitalist or have you undergone a drastic change of thought and now believe socialism would be a better Economic System for our country . No drastic change thank you so yesterday in boston you stated if the stress tests do not evolve they risk becoming a compliance exercise, breeding complacency from supervisors and thanks banks need to be ready not just for expected but unexpected risks. You understand the importance of these stress test to ensure our Financial System is resilient. Ive heard the feds stress tests have been watered down in order to allow the biggest banks off easy do you believe these stress tests have been made easier since you took over as chairman of the Federal Reserve, and how do these simulated stress scenarios compare in scale relative to the 2008 financial crisis i dont believe weve made them easier. We have no intention of making them easier. We have the intention of having them evolve. I do think were ten years into this i think weve done nine cycles now. And i think there is a risk that if we dont continue to adapt to the markets and to the institutions and to the state of the economy, that theyll become stale and people will get complacent and you come back in another ten years and theyre not really a factor anymore. Theyve been a very successful innovation in maybe the most successful regulatory innovation since the financial crisis and i think even the banks would agree to that. So we intend them to continue to be strong going forward. Thank you in february, when you were in front of this committee, i asked you about the Labor Force Participation rate where 7 million job openings as an employer, its hard to hire people right now. You mentioned some factors keeping this number around 63 such as the skills gap, poor education and the Opioid Crisis. The fed has no control over these factors and we must deal with them here in congress you have noticed have you noticed any of these factors improving and getting more people back into the workforce since you were last here in february i think Labor Force Participation, the Labor Force Participation rate has held up pretty well. Theres a declining trend due to aging in the population. 62. 9 now. Thats where it was in late 2013 so thats a big gain against the trend. Its a good thing. More anecdotally, were hearing a lot from, you know, folks who live and work in low and moderate income communities that there are Work Opportunities and there are companies that are coming in and really want workers and theyre going to look through some of the problematic things people may have had in their lives and hire them anyway. So thats we think thats really healthy in a tight labor market if you have a tight labor market that lasts for quite a long time, thats what youll get so we think its we do think that thats a relatively new development and a very positive one. All right and according to the most recent Monetary Policy report, Consumer Spending was down at the beginning of the First Quarter which you touched on but it appears to have picked up, and i can tell you as a business person, weve seen it pick up. So what factors do you see as contributing to this turnaround . I think its strong job creation its wages moving up its, you know, as you mention, tight labor market its workers who we survey workers and they say jobs are plentiful. We survey businesses and they say they cant find workers. Its a world where the worker and the family is feeling people are quitting their jobs its a world where they are feeling good about the economy relatively and when you have more jobs than workers it has a tendency to drive up wages, and we see that on main street america. Thank you for your service appreciate you being here. I yield my time back thank you, sir. Thank you the gentle woman from pennsylvania, ms. Dean, is now recognized for five minutes. Thank you, chairwoman waters and thank you chairman powell, for your expertise, service and for coming and explaining things to us. I learn a lot when i hear you speak, and i thank you for that. I wanted to examine a little more closely some of the things you talked about the consumer side looking strong the business side weakening. And i want to compare that and ask you, what are some of the triggers to the weakening on the business side . As i look at the chart, trade policy uncertainty, you said its no question uncertainty is elevated what would greater certainty look like . What are some of the things creating the uncertainty what would greater certainty look like, and what would the impact be on the economy we think the place where uncertainty is showing up is in Business Investment. Businesses make investments, and those have to work for a longer period of time when businesses become uncertain about the future and about future demand, they may hold off. They may decide to wait for they build something or buy something. And they may just hold off so what were seeing is business fixed investment, which was quite strong Business Investment was very strong through 17 and most of 18 its really slowed down now in the middle of the year and we do connect that theres no perfect way to identify these things, but we do connect that to trade policy uncertainty and uncertainty about Global Growth and weak manufacturing around the world what specifically in trade policy do you think is connected to that pulling back on investment i think its just there have been the people who are responsible for trade, and thats not us. We dont criticize them for what they do. We have broad series of trade discussions going on if you are a Manufacturing Company in our economy of any size, the chances are good that your supply chain goes across National Borders to canada or mexico or china or vietnam or some place and that supply chain is really part of the way you do business and you just assume its working and you can focus on your clients. When the supply chain is called into question, and we hear this a lot from businesses, by the way. Its called into question you pull back and have less certainty about how this is going to work, you may have to change it. Many companies have changed their supply chain away from china now. Because of the tariffs . Had moved to mexico or vietnam and now so i just think that uncertainty is something that we call out for the economy. But i wouldnt want to suggest that that in any way is a criticism of those who are conducting the policy. We dont have a responsibility for evaluating that. Thats for them. I understand and appreciate your independence there. Im hearing the same thing on the ground from my businesses in montgomery and berks counties, pennsylvania the uncertainty, the fickle trade policy, fickle tariff policy, punitive tariff policy is driving their conservativism in their own areas let me shift to Something Else you talked about i care deeply about gun violence, the Opioid Crisis, and im wondering through your complex lens, could you talk about the Opioid Crisis and or gun violence, one of the recent reports on gun violence says that gun violence in this country costs our economy somewhere in the area of 230 billion a year and i know you are not involved in gun policy or the Opioid Crisis policy, but through your lens, and through your the tools youre using, what are you seeing what could we in Congress Learn about how we can minimize reduce that Economic Impact . I can probably do a little better and talk about opioids where theres been some great research, including by the late labor economist alan kruger who sadly passed away last year. Or maybe earlier this year, about the effect of the Opioid Crisis so an extraordinary if you take the prime age man in certain age groups who are out of the labor force, extraordinary percentage of them i think the number was 44 of them, are taking some kind of painkiller so its a big number its a big number of people that are on opioids and for the most part missing from the labor force. We all want, you know, the u. S. Economy to grow faster and be larger and we want prosperity to be broadly shared here are people who are in the prime working years who are on opioids and its a National Crisis and i know people are working on it, but its out there and its just theres a human tragedy but theres also an economic one to get people into the workforce where they can lead healthy lives in terms of direct cost to labor and also if you think about the number, 72,000 people in a single year dying of overdose, think of the lost economic or the impact, Economic Impact, obviously, to the individual family but then to the communities, to their children and elsewhere so i thank youvery much for your work, and i always learn something from you thank you. I yield back thank you the gentleman from oklahoma, mr. Lucas, is recognized for five minutes. Thank you, madam chair. And thank you for being here today, again, chairman powell. You know, and we discussed many times the nature of my district. Its agriculture, energy, its capital intensive. The actions the fed takes and the treasury takes has a very direct impact on my constituency i am very, in particular, sensitive about fed actions because my part of the world suffered the most at the end of the 1920s and 1930s before we became far more sophisticated in how we handle these policies you are the fourth fed chairman thats appeared before this committee in this capacity since ive been a member theres just a handful of us on the back row who go all the way back to mr. Greenspan. And i found you to be as up front and as straightforward as anyone could be in your position, and in some ways, really quite impressive compared to the things in the past. Now that said, ive also learned in my time to try and focus on things that matter to my people back home. That would make a difference to them, even if sometimes it appears to be down in the weeds. I have a suspicious, a very bright fellow that you are, you know where were going with this next question. But i have been raising the issue of interaffiliate initial margin for nearly five years now. While regulators have agreed the requirements are an issue to be addressed, weve not yet been given any indication of timing when in congress can we expect some action, chairman . I wish i could be here to give you perfect clarity on that but either am i completely emptyhanded so i do know that this is a subject of active interagency discussions at the moment, and i am hopeful that those will be fruitful and you know, chairman, like a bird dog on point that i would reiterate the u. S. Is the only g20 country to impose these initial margin requirements, and this has created what i fear is an unlevel Playing Field for United States institutions, and i believe its time we come to focus. So my second very respectful question, last month the Basel Committee agreed to provide an offset for client cleared initial margin under the leverage ratio and the bipartisan cftc commissioners support this offset im looking forward to the fed and other regulators implementing this global revision can you give me a sense about timeline on that perhaps ill have to come back to you on that one. Fair enough, mr. Chair. You are following in those fine traditions dating back to mr. Greenspan, and i respect that, and i say that respectfully. So once again, one final question, and i want to again voice my concern about the proposal im worried higher capital charges under sacra will cause banks to pass those costs on to Commercial End users engaged in oct transactions and congress clearly sought to provide relief for end users as a result of dodd frank this proposal, i fear, threatens to undermine congressional intent and would deter from engaging in Risk Management activities i suspect youre aware of these concerns, and i hope well see them addressed just noting from my perspective again, as a member of congress from 3rd district of oklahoma, the food we produce, the energy we provide, those resources need those kind of Risk Management tools because of the sheer capital intensive nature of the businesses so, focus, mr. Chairman. I know you will. I appreciate you very much thank you that last one, i think youre probably aware is out for comment after a lot of work. Progress, mr. Chair i like that. Yield back, madam chair. Thank you the gentle woman from texas, ms. Garcia, is recognized for five minutes. Thank you, madam chair, and thank you, chairman powell, for your endurance were almost at the end of the tunnel it looks like and i just wanted to focus a little bit on the income inequality gap weve been talking about. I wanted to follow up on your answers to mr. Lawson. You said weve seen the gains of the past decade accruing to the upper income groups and passing the middle and lower income groups can you expand on the longterm systematic risks that such inequality would introduce in the economy of such if it continues on the present course and into the future . So it i think the tradition has been or or the hi that people have generally been able to progress and through time be economically better off than their predecessors and their parents and grandparents and that kind of thing and i think thats how people think about that have thought about life in our system and i think the data show that thats less and less true. Its still true for many, but its true for fewer than it used to be, and thats not good i mean, we want prosperity to be spread as broadly as it possibly can, and we want there to be progress for lots of people, and we want mobility from the bottom to the bottom and vice versa we want the outcomes to be fair. So, and if you dont have that, you ask whats the cost of that really i think the costs are big. And that would include, you know, kind of a loss of faith in our institutions to deliver that in our society so i think its a very important problem to address i also by the way, i see lots of businesses and people coming around to that view that maybe werent thinking that way five years ago. You hear that a lot. You hear a lot of discussion about this now in the business community. They see it in terms of good employees and things like that but also in terms of people to buy their products so i think this is a national problem. So what happens to the bottom i mean, its not as simple as haves and have notes if its shifting and the goal is always to move up, if you will, what happens to the bottom do you all track and look at the poverty rates . Do you all look and track at the lower and lower income levels . Researchers do. And the people that are going as representative presley said that are paycheck to paycheck . So, we do and lots of economists outside the feds. I guess i missed it i didnt see any data on poverty rates or what its doing your book talks about the inflation rate, the Unemployment Rate as low as possible. But what is the bottom that we can reach in terms of the poverty rate um, i dont have a number for you. We have all that data. We dont put it in every Monetary Policy report you probably saw the box though that talked about disparate labor markets for people with less education do you find this unacceptable in terms of a poverty rate before it skews Everything Else . Any positive number any positive number yeah. I mean, i think our goal should be to not have poverty i mean, whats an acceptable number in our country no amount of poverty should be acceptable right now, i know we have a lot of poverty. But if you ask me that question, i would say well, that would be my goal, too. But for others it may not. I dont know if you follow, but the president wants to change the poverty line and how we index it to the cpi or the chain cpi, and theres a proposed rule change i mean, some people would rather just pretend that there is no poverty or that they have done something to reduce poverty and changing the rules on how to calculate it doesnt get us anywhere i just wondered if youve looked at that proposal and whether you favor it or disfavor it. I have not looked at it i wouldnt have an opinion on it you wouldnt . Well, im glad that you agree with me that the goal should be zero thats something that ive worked with my entire life and will continue to do that and i think that the minimum wage increase would be a step in that direction and a number of other initiatives that i hope well be able to get through congress so i appreciate your time. Thank you. Thank you, madam chair. You back yield back thank you the gentleman from minnesota, mr. Phillips, is recognized for five minutes thank you, madam chair and welcome, chairman powell when you get to me, youve reached the finish line. My first question, why is the u. S. Dollar the worlds reserve currency um, the u. S. Dollar is the worlds reserve currency there tends to be one, so if you are the country with the best institutions, the largest economy, the rule of law, and relatively open to commerce, a trading nation, you can be that. Now, so what happens is there tends to be one reserve currency and it tends to be a stable equilibrium for a period of time, but its not infinite. The pound was the reserve currency for many, many years, but now the dollar has been for some time. So, what do you consider risks to that changing at some point in the future . Its a very longrun thing. Its a fairly stable equilibrium. You have yet to think what currency out there would compete with the dollar, and it would be the euro or its hard to see the dollar not being in the reserve currency for quite some time that doesnt mean that every there can be multiple reserve currencies so there could be an equilibrium where there are two or three, and that would be fine but right now it really is the dollar i dont see that under threat right now. Of course, in the long run, itll come down to fiscal sustainality itll come down to maintaining our rule of law and Democratic Institutions and prosperity and being a relatively open trading nation all those things are essential in your opening remarks you talked about concerns relative to our high and rising federal debt would that be a concern relative tothe u. S. Dollar maintain in the long run, absolutely second question, when you contemplate rate changes, how much strength do you give to the strength of current Economic Data versus the forwardlooking weakness as inverted by the yield curve . I think Monetary Policy is always about the outlook you have to understand and take into account the current position in our economy which in our case is relative price stability and low unemployment but were always about looking forward because Monetary Policy works with a lag you ask about the yield curve, and thats something we do look at, of course, because there is a message in there there are a couple of messages in there you have to think carefully about what they might be its not a single thing that is a dominant Financial Condition there are many, many things that we look at in financial markets, and thats just one of them, but its certainly one and lastly, do you believe that the Federal Reserve has the requisite tools to fulfill its mandate at the zlb without assistance of fiscal policy . Well, as i mentioned earlier, first of all, we do have the tools that we have, and we will use them aggressively, and i believe they will be adequate. As i mentioned though in a severe downturn, there comes a time when fiscal policy support is necessary and appropriate and one of those times was during the global financia crisis and the Great Recession so, fiscal policy is very powerful, and i think, you know, is important to have i think for the most part the fed can handle countercyclical policy but in a steep downturn, there will always be an Important Role for fiscal policy. So is the authorization to buy a wider range of assets at the lower bound . Would that be helpful or important or not at this time . I dont think were seeking that were really not looking at that well have plenty of treasuries to buy if it comes to that if it comes to buying assets, there will be no shortage of u. S. Treasury securities you are referring to the fact that other Central Banks have the ability to buy equity. Its not an authority we are seeking or looking at or think that we need okay. Thank you, mr. Chairman. And i yield back thank you very much and so now we have the gentleman from california, mr. Sherman we are trying to honor your 1 00 time that we agreed upon, and we are just running a few minutes over, but we only have two we have mr. Sherman, and we have mr. Haggue i think both the chairwoman and the chairman for their indulgence ive spent a couple of decades in this room ive watched republicans come here and condemn the fed for overly loose money and condemn for quantityive easing i for one have been pushing in the other direction. Its interesting to see how with trumps i think one of our colleagues said the republicans seem to be in favor of loose money only when theres a republican president the fact is that you havent hit your 2 inflation goal and as we have talked earlier, it should be a a 2. 5 inflation goal because and while unemployment is low, we havent had the big wage increases youve told ous that wages have grown but basically by 1 over inflation which doesnt make up for 30 years of negative or stagnant wage growth in this country for those without a College Degree on trade, ive seen the reverse roles in another way democrats voted against nafta, and shafta but now that trump is just flailing at the trade deficit, i hear an occasional democrat say we should just ignore the trade deficit. I dont think that ignoring or flailing is the right approach i know theres been a significant discussion here about crypto currencies. This constitutes crypto currencies in attempt i hope unsuccessful, to transfer power from the United States government to sanctions tax evaders, terrorists and drug dealers, while reducing the importance as the chairman indicated of the United States dollar as the reserve and trade currency madam chair, i know that we have an executive from facebook coming to join us, but ultimately, it is time to bring Mark Zuckerberg here he is the one that has