Transcripts For CNBC Power Lunch 20240712

Prices and the economy depends on the course of the virus the committee will maintain its purchases or increase to smooth market funding it repeats for the second time that it seeks inflation moderately above 2 . This is a carbon copy of the last statement i counted seven words changed and none of them really substantial or meant to convey any particular meaning i think that reflects the big changes. Jim was saying last time exceeding the 2 inflation goal and theity si itdesire not to mo many waves while the country counts votes in this president ial election. The other dissenter did not attend the meeting due to the birth of his second child. Congratulations to Neal Kashkari absolutely. Well spend half an hour dissecting those seven words what do you think of jims point, which is the absence of stimulus may have put the fed even more under a spotlight to do even more absolutely. I think thats true. I think the fed will feel pressure to do more, but it creates an interesting quandary, which is that you know the old thing leave to cesar that which belongs to cesar and leave that to god which belongs to god. The famous line talked about is we can lend, we cant do grants. So the question becomes if the fed indeed does do more because the fiscal side isnt doing more, request isnt it doing it . Why isnt that stuff that really should be done by the fiscal side and does it do any good for the fed to do more jim was talking about this issue of quantitative easing i personally have my questions and ive talked about this with a lot of other fed watchers, what good additional qe would do in this environment when the ten year cant seem to get its act above 1 , no matter how much the government seems to borrow theres no whiff of inflation out there. David kelly has a lot of interesting thoughts on this, which is why would it go out and do more qe, towards what and what effect would it have other than some kind of psychological sal salve to the market. Why dont you expound there what more would the fed do if it did more and what effect would it have other than pof tnsly raising asset prices really my point here is that its a back stop its something that the markets just are to understand that the fed is going to keep a control of Interest Rates. Its not that they necessarily need to do anything more i agree with all the points that are being made tenyear treasury yields are having a hard time rising, inflation having a hard time rising doing more qe doesnt necessarily need to be there but what does need to be there is when yields were starting to go up and we thought we were going to have a potentially bigger fiscal package, i dont think the markets are pryce ficed fora tenyear treasury yield to get up to about 1. 2 and people start to get worried about a taper tantrum. Im not saying any of those things will occur but i am saying we need to think of the fed as a backstop in trying to control longterm interest rat rates. David kelly, what about steves point about buying Corporate Credit if the fed goes in and does that more gae aggressively in. They could but i dont think thats the point of qe anyway. Qe is not really working in terms of low rate stimulating activity directly. What it does do is enable fiscal spending this year even without fiscal stimulus, were going to run a budget deficit of about 1. 8 trillion you add on another trillion of stimulus, youre 2. 8 trillion could the government borrow that on the open market without the feds help with without longterm Interest Rates going up probably not the fed is doing at least a trillion in purchases. It would enable the federal government to feed stimulus into the economy without seeing the rates go up. Its enabling fiscal stimulus. David please, steve, go ahead just real quickly, im sorry to interrupt i guess my point is that the fed, david, is entitled to his thoughts about whether or not the fed is actually motivated by helping the Government Finance his deficit. That let me say the fed has a more powerful tool right now to impact the economy and thats these Corporate Bond es bond purchases if you drive down rates, its to affect the real economy. Its much more effective than anything in covering the fed in 30 years if it wants to drive down rates in the real economy, it could go out and buy more bonds in the market until its authority expires. That is a fair point. If can you keep the high yields down and help companies that might otherwise be under a lot of stress, that is good. But theyll still obviously have to be a fair amount of tidying up with those companies afterwards it could do some good there. Essentially i agree with chair powell that the most important thing is to have some fiscal support of the economy through the pandemic and theyre doing everything they can to enable that we have several different words in the statements last time im going to throw some franks hot sauce into the conversation now. Lets take a look at a biden win and a trump win. Mona, under either of those scenarios, will Jerome Powell be renominated to head the fed when his term expires yeah, thats a great question i think clearly from a President Donald Trump perspective, we havent heard as much complaining about Jerome Powell. So i think clearly the policy is secure if we do get a reelection of President Donald Trump. The question becomes under a Biden Victory what do we see again, i think biden will have his, you know, Due Diligence to do but thus far Jerome Powell has proven to be a pretty steady player, politically very unbiased and really seeing the economy through this crisis and perhaps is the right leader to take us through the next mona says powell stays under either jim, what do you say i agree with mona i think he stays under either. Why would you want to create more risk or uncertainty in the markets at this point. After all, the fed has just laid out a new framework for keeping Interest Rates really low. I dont know that, you know, under a biden presidency he would want to really change that david yeah, i think that joe biden would definitely want to keep Jerome Powell. Partly because hes appointed by a republican, he is from a republican heritage. Thats actually going to be very important for President Biden to reach across the aisle and try to come across as a centrist donald trump im not so sure i think theres sort of a personality clash there. It would be interesting to see if things got tough next year and donald trump was reelected, whether he would actually want to keep Jerome Powell, even though that is pretty much helping out the straight a year and a half, two years ago he was down on powell. I guess that has changed a bit since then steve, why dont you respond to that franks hot sauce its a great question, tyler. Definitely would definitely reappoint powell, especially if he has a republican senator. That would remove run controversial flash point with the Republican Senate he doesnt need the second thing i would add is come talk to me if this nomination takes place during a time when Interest Rates are rising right now Everybody Loves the fed, Everybody Loves powell. I have the unfortunate job of listening to of single word and every sekle Committee Meeting in congress that the charm has to sit for. If rates were rising, it would be a very different story. Come talk to me then and ask me that question. President donald trump might, if he is reelected, want to go further down the road if hes going and disrupting the institutions as we know them now and he could go further and get rid of powell if he wants that fight and is willing to risk upsetting markets from that change and appoint somebody more controversial. Interesting interesting. So i see a probability that either one would hold on to powell, but david and steve are a little less convinced that mr. Trump would hold on to powell economy recovering, mona, but not back to prepandemic levels. If you were to grade the health of the economy on a scale of one to ten with ten being excellent and one being poor, where would you rank this economy right now . You know, i think the economy is on a path to recovery, but right now were still in early stages were probably at a 4 or 5 at the best keep in mind Unemployment Rate if ever after tomorrows jobs report is probably likely 7. 6 or so. Gdp growth was phenomenal this quarter but looking to moderate over time. We certainly have to get through this next period of the virus and an economy that may be hunkered down a bit and we dont have stimulus on the table and the president ial election is still ongoing. What i do see is 2021 could look much better. Even using the feds own estimates, next year ears gdp growth could look plus 4 , Earnings Growth could be closer to plus 23 according to estimates. Combine that with low rates and the potential for stimulus, thats not a bad back drop for risk assets. Were four to five heading towards hopefully six, seven or eight next year. As we look at the ten had of year inching up just a little bit, do you think rates are on the rise here or no . I think theyre lower and would than they would have been under a blue wave. A big fiscal package that nancy pelosi was talking about is less likely to get through under a divided government so, yes, you should get lower rates. I think thats likely. And as for grading the economy, id probably give it a c the pandemic economy, these are either mid terms or final grade. Hopefully by next fall we could out of this and i think the economy will be doing quite well at that point. Very good thank you, everybody, for joining us today mona, jim, karen, david, kelly and steve liesman, we appreciate it we continue to look for a reaction to a fed statement we just got, a press conference looms in a fuels time stocks rally looks like theyre hanging on to the gains here lets go to bob pisani for more. The fed did not move the stock market but you dont need the fed. We have a Freight Train going on we are 60 points away from an historic high, september 2nd, remember that . 3580 we just keep moving up the last three days something new is happening today. Yesterday was all about Growth Stocks we were going to have a biden presidency and a gop in control of the senate and that of course meant less stimulus but good news for the Growth Stocks, less taxation, less regulation, health care and tech was up. Today theyre up but other things are up as well. Cyclical stuff i want to show you stuff like clean energy, for example, which are bouncing back because theres a little bit of murkiness in the senate races. We may have the prospect of a twosenate race runoff in georgia. Thats muddying the gop control. Thats causing confusion now people are covering their bets you see Clean Energy Stocks that were down yesterday are up today. And groups that might benefit from extra stimulus like caterpillar, closed tuesday 168 dropped down big yesterday, 155 and its back up again its a roller coaster. The same with the infrastructure stocks they were up earlier in the week and then down big. Its just a few days, you see these things going all over the place and people can figure out what kind of stimulus or infrastructure were getting i call this the heads you win, tails you win stock market no matter what people are still betting long term things are going to be on the up side thank you very much, bob pisani and Rick Santelli is looking at the impact on the bond market today. Rick i had my Sherlock Holmes magnifying glass better look at twoday charts, the 2s, 10s, 30s or dollar index. Truly all the pieces set in motion about 28 to 30 hours ago are still enforced 93, 94 on the high intra day maybe we moved up a microbasis point but not really that much in terms of whats motivating the arket, i agree with bob an the whole panel, the fed really didnt say much today. What would they have said if the dow was down 800 today i wasnt asked this question but ill tell you anyway, maybe we should wait until we get postcovid i think the fed will have some real issues. And should they do more things when i hear the feds more effective, you know what i hear . I hear an end around the way things normally are done kelly, back to you all right, rick, thank you, sir. Rick santelli. Coming up, were 15 minutes away from fed chair powells News Conference even when the fed doesnt move markets that much, sometimes the press conference does. First, well get you updated on the states that are still counting their votes the latest daietls on the election next on power lunch. Why dont you call Td Ameritrade for a strategy gut check . Whats that . You run it by an expert, you talk about the risk and potential profit and loss. Couldve used that before i hired my interior decorator. Voila maybe a couple throw pillows would help. Get a strategy gut check from our trade desk. Welcome back markets do continue to rally the dow up 575 points, nasdaq up nearly 300, thats a 2. 5 gain and it is the best performer we are watching two major stories this hour. First the Coronavirus Crisis daily numbers topping 100,000 for the first time and on the election front, the electoral vote count now stands at 253 for biden and 214 for trump. As votes continue to trickle in from various states, we still have six uncalled races at this hour for the latest on the election, lets go to eamon javers in d. C. Lets start with a little whip asround the country. Nevada has been reporting new vote during the course of the day. So far if we can bring up that nevada screen, i can tell you where we are as of right now there we go. 49. 4 for biden, 48. 5 for trump. Thats 89 of the vote in. So were getting there in terms of getting a result in nevada but were not there yet. Moving on to arizona, again, a lot of focus on arizona because its got 11 electoral votes. Biden 50. 5 , well watch that as georgia where they do continue to count votes, we had a press conference from georgia, 4 pnts 5 for trump, 4 49. 2 for biden. 98 of the vote is in in the state of georgia meanwhile the president had tweeted out earlier today stop the count, revising that with statement later in the day saying if you count the legal votes, i easily win the election if you count the illegal and late vote, they can steal the election from us. The president throwing out accusations of fraud there are no credible allegations of fraud at this hour anywhere in the country that we know of right now, kelly. So well watch for that as well. The Biden Campaign says theyre confident theyre going to win this thing they think it could be all wrapped up, done and dusted as soon as today. Back over to you wow eamon javers with the latest and frank is in philadelphia for us hi, frank. About 71 of pennsylvanias mailin ballots have been counselled rig counted. The ballot counting was temporarily halted due to litigation from the Trump Campaign the campaign wanted more access to the ballot counting and opening process. Right now the state is appealing that ruling and the state is back to counting President Donald Trump has less than a 2 point lead and in philadelphia there are about 104,000 mailin ballots and they are largely expected to be for biden. The math Pretty Simple when you look at it that way. If all those ballots are counted, this race becomes much tighter. And theres the issue of the outstanding 500,000 mailin ballots that can be counted as long as they arrive by friday at 5 p. M. The Trump Campaign has joined to file litigation that aims to block those being counted as well and there are provisional ballots who went to the wrong polling place and were allowed to file a ballot anyway. Those may or may not be counted. I gather mr. Biden is winning the mailin ballots by about 77 to 22 if he tcontinues at that ratio, what happens when the rest of the ballots are counted . In the philadelphia area were assuming most of those mailin ballots are for joe biden. But around the state, theres that general consensus that the maeshlgt of those mailin ballots will be for joe biden. That makes this race much tighter. And it alsoity pends on which way the courts go in ruling whether ballots that were postmarked on election day but arrived, say, on friday are able to be counted or at excluded from being counted thats really at the heart of that matter. Kelly. We are Just Moments Away from fed chair powells News Conference the dow is now up 589 points it headed back toward session highs and materials, tech and financials are leading the way were going to be back in a moment with the jay powell News Conference stay with us ourselves. Lets get checked for those around us. Lets get checked for a full range of conditions. 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Powells News Conference will come after the feds decision to leave rates exactly where they are right now the industrials up better than 2 , another nice day there, 2 for the s p 500 and 2 2 3 for nasdaq. Check out some of the stocks making record highs today, alphab alphabet, abbott labs, cost there co and honeywell. Whats most on your mind in terms of the fed chair himself i think the fed chair has been a very calming influence he will try to avoid politics b and i think thats a reassuring message for markets. The fed will be able to keep rates lower for longer because we expect to see less fiscal stimulus out of a divided government how do you think they explain when they Start Talking about additional bond buying, quantitative easing, if you would use that term. Theyll probably duck that term if the economy is improving, that might push long rates up. I think the fed might have to increase its bond buying i dont think chairman powell will want to get into that discussion right now theyd much rather see how much stimulus we get until the end of the year and how the markets reacting ultimately i think the fed intends to keep rates very low as long as possible while the economy begins to recover. I imagine people will say wait a minute, why do we need such an extremely high level still of bond buying perhaps but weve been through a lot this year. Were still going through a lot. I think its very easy for the fed to defend continued very aggressive action to support the economy and that vaccine is distributed. Of course we dont have that yet. We dont know how long were going to have to put up with this virus and all the disruption its causing to the economy. Even after a big bounce in the third quarter, this economy is still far from healthy here. We still need to get through this, get back to normal social activity i think the feds got every excuse in the world to continue to be very supportive of this economy while we get through the rest of this pandemic. Does the tenyear go back over 1 any time soon . I think it will go over 1 over the course of next year as that vaccine is distributed, as it becomes clear we are coming to the end of this extraordinary period of time, i do think well go over 1 and we should why should anybody invest in a longterm Government Security that pays you a rate of interest in real terms. It doesnt make sense. Its beyond extraordinary. Forgive me for interrupting because here comes jay powell. At the Federal Reserve, we are strongly committed to achieving the Monetary Policy goals congress has given us, maximum employment and price stability. Since the beginning of the pandemic, we have taken forceful actions to provide relief and stability, ensure the recovery will be as strong as possible and to limit lasting damage to the economy. Today my colleagues on the federal open Market Committee and i reaffirmed our commitment to support the economy in this challenging time Economic Activity has continued to recover from its depressed Second Quarter level the reopening of the economy led to a rapid rebound in activity and real gdp rosz e in the third quarter. The pace of improvement has moderated. Household spending on especially durable goods has been strong and moved above its prepandemic level. In contrast, spending on services remains low, largely in s sectors this rely on people who gather closely the housing sector has fully recovered from the downturn, supported in part by low mortgage Interest Rates. Business investment has also picked up. Even so, overall Economic Activity remains well below its level before the pandemic and the path ahead remains highly uncertain. In the labor market, roughly half of the 22 million jobs that were lost in march and april have been regained as many were able to return to work as with overall Economic Activity, the pace of improvement in the labor market has moderated. The Unemployment Rate declined over the past five months but remained elevated at 7. 9 as of september. Although we welcome this progress, we will not lose sight of the millions of americans who remain out of work the economic downturn has not fallen equally on all americans and those least able to shoulder the burden have been hardest hit. In particular, the high level of joblessness has been especially severe for lower wage workers in the services sector, for women and for africanamericans and hispanics. The economic dislocation has upended many lives and created great uncertainty about the future the pandemic has also left a significant imprint on inflation. Following large declines in the spring, Consumer Prices picked up over the summer, in pact reflecting a rise in durable goods prices for those most affected by the pandemic, prices remain particularly soft, overall on a 12month basis, inflation remains below our objective. The outlook for the economy is extraordinarily uncertain and will depend on large part on the success of efforts to keep the virus in check therecent rise in new covid19 cases both here in the United States and abroad is particularly concerning. All of us have a role to play in our nations response to the pandemic following the advice of Public Health professionals to keep appropriate social distances and to wear masks in public will help get the economy back to full strength. A full economic recovery is unlikely until people are confident that its safe to reengage in a broad range of activities the Federal Reserves response to this crisis has been guided by our mandate to promote maximum unemployment and stable prices to people along with to support the Financial System as noted, we view maximum employment as a broadbased and inclusive goal our ability to achieve maximum employment in the years ahead depends importantly on having longer term Inflation Expectations well anchored at 2 as we said in september and again today, with inflation running persistently below 2 , we will aim to achieve inflation moderately above 2 for some time so that inflation averages 2 over time and longer term Inflation Expectations remain well anchored at 2 . We expect to maintain an accommodative stance of Monetary Policy until these employment and inflation outcomes are achieved with regard to Interest Rates, we continue to expect it will be appropriate to maintain the current 0 to 1 4 target range until levels consistent with the committees of maximum employment and inflation has risen to 2 and is on track to moderately exceed 2 for some time in addition, over coming months well continue to increase our holdings of treasury securities and Agency Mortgage backed securities at least at the current pace these are eintended to improve and support the flow of credit to household and businesses. My colleagues and i discussed our asset purchases and the role they are playing in supporting the recovery at the current pace, our holdings of securities are rising at a substantial rate of 120 billion per month, 80 a month of treasury and 40 per month of agency abs. We believe these purchases have eased financial conditions and are providing substantial support to the economy looking ahead, we will continue to monitor developments and assess how our ongoing asset purchases can support longterm objectives the firederal reserve has been taking actions to support the flow of credit in the economy, for households, businesses large and small and state and local governments. Preserving the flow of credit is essential for mitigating damage to the economy and promoting a robust recovery. Ma many of our programs are available only in very unusual circumstances such as those we find ourselves in today. These programs serve as a back stop to key credit markets and have helped to restore the flow of credit from private lenders through normal channels. We have deployed these lending powers to an unprecedented extent enabled in large part by financial backing and support from congress and the treasury when the time comes, after the crisis has passed, we will put these emergency tools back in the tool box as ive emphasized before, these are lending powers, not spending powers the fed cannot grant money to particular beneficiaries we can only create programs or facilities with broadbased eligibility to make loans to solvent entities with the expectation that the loans will be repaid. Many borrowers are benefiting from these programs, as is the overall economy. But for many others, getting a loan that may be difficult to repay may not be the answer. In these cases, direct fiscal support may be needed. Elected officials have the power to tax and spend and to make decisions about where we, as a society, should direct our collective resources the fiscal policy actions that have been taken thus far have made a critical deference to familiar police, businesses and communities across the country even so, the current economic downturn is the most severe in our lifetimes. It will take a while to get back to the levels of Economic Activity and employment that prevailed at the beginning of this year. And it may take continued support from both monetary and fiscal policy to achieve that. Id like to mention a couple of changes that we plan on making to our summary of Economic Projections beginning in december first, we will release the entire package of sep materials at the same time that the ufomc statement comes out. Previously, some of these materials were released three weeks after the meeting as part of the minutes this step will make more information at the time of our policy announcements, including the des contributions of forecast and how how par tis pends judge the risk second, we will add two new graphs that show how the ball of participants and risk have evolved over time. These changes will provide a timely perspective on the risk that surround the baseline projections, highlighting risk man angment considerations relevant for moneytory policy. To conclude, we understand that our actions affect communities, families and businesses across the country. Everything we do is in service to our public mission. We are committed to using our full range of tools to support the economy and to help assure that the recovery from this difficult period will be as robust as possible thank you. I look forward to your questions. Hi, chair powell. Its rachel seeingsaegle from e washington post. Can you speak about what indicators youre seeing that suggests the pace of improvement has moderated . Lets start with february in february we had an economy that was performing well then the pandemic hit and we had a record decline in activity in march and april and then had a record bounceback in may and june as i think would have been expected and was expected, the pace of improvement from may and june has now moderated so its not unexpected i think if you look at just about anything, you know, for example, the payroll readings. The payroll job gains in may and june were just outsized and theyre certainly still very large but the pace of improvement has moderated. Thats the case for all different measures in the labor force, in thelabor market. Another would be claims, just about all the data were to show a big bounceback but as you expect, when you had a lot of people go back to work at once, the pace will moderate same thing with Economic Activity most forecasts call for still Significant Growth in the Fourth Quarter but not at the 33 annualized pace that we had in the third quarter. So in a sense that would be as expected we have been concerned that the down side risks, though, are prevalent now, which are really the risk of the further spread of the disease and also the risk that household will run through the savings theyve managed to accumulate on their Balance Sheet and that could weigh on activity what we see on the present is continued growth, continued expansion but at a gradually moderating pace. Thank you marty, Associated Press thank you could you talk a little bit about where you think the stimulus package that is being debated in congress is and how severe a threat that could be to the economy if it does not get passed, say, before january. So it is obviously its for congress to decide the timing, size and components of further fiscal support for the economy i will say that the support provided by the c. A. R. E. S. Act wasabsolutely essential in supporting the recovery that weve seen so far, which has generally exceeded expectations. I do think its likely that further support is likely to be needed for Monetary Policy and fiscal policy. I just mentioned the two risks that i think we face and those would be well addressed through more fiscal policy, one is the further spread of the virus and the other is the lapsing of the c. A. R. E. S. Act benefit and savings on peoples Balance Sheets that will dwindle i think its appropriate for us not to try to prescribe for progress exactly what they should do or what the timing of it should be or what the size of it should be and leave it at that nick timrose. Thank you, chair powell to follow on martys question, you really have been saying since april that more is needed on the fiscal policy front and yet we dont seem to be that much closer than we were in the spring or the summer to additional spending. Two questions. Would the lack of physical kol suppo compel the fed to provide additional accommodation and are you and your colleagues being more vocal about the need for fiscal support because the capacity of Monetary Policy to support growth is diminished here given the low level of long and shortterm rates thank you. In your first question, well take into account all external factors and do what we think we need to dpo with the tools that we have to pursue our goals. Thats what we will do ive said it on a couple of occasions that that will go better and move more quickly if we have a broad set of policies from across the government weve said this from the very againing it first and er er to most, get the spread of the virus under control and working on therapeutic. Those are critical to the economy. As well as Health Policy i theyll be good for the economy. Fiscal policy can replace lost incomes for people out of work through no fault of their own and we can support lending and support demand through Interest Rates and asset purchases and that sort of thing were going to teak the economy so i think all of us lived through the experience of the years after the Global Financial crisis and for a number of years in the middle of the recovery, fiscal policy was pretty tight and i think i just would say that i think well have a stronger recovery if we can just get at least some more fiscal support when its appropriate, when its appropriate and in the size congress thinks its appropriate. I do think that that will likely by the way, you see, you know, a lot of discussion on both sides of the aisle, on both sides of the hill that suggest generally that there will be something. Thank you steve liesman, cnbc. Thank you mr. Chairman, also to follow up on sort of what nick was talking about, two questions about quantitati quantitativei easingif the mar t if the market is functioning better, why havent you reduced qe that youre doing if the market is functioning better already . The second question i have is what good for the broader economy would addition an qe do at this point given that all right, look, weve just lost i guess the signal. Steve liesman was posing a question there to chair powell well try and get that signal back as we take a look at the markets right now. The nasdaq is up 323 points, almost 3 , as tech stocks continue to lead the way there the industrials up 500 almost 600 points thats 2. 1 . What a week it has been. The s p up 3. 23 ched fair powell fed chair powell announcing he will dip into the feds ample tool box as needed to keep the economy growing, number one, and, two, hopefully pointing inflation upward in the face of falling air prices, lower and less demand for oil, trying to get inflation up above 2 . But it is a far, far way from that right now, kelly. Yeah, and tyler, lets again point out with the dow up more than 600 points, were heading back to session highs. The question of steve was an important one, about how the fed explains to the public its this really strong, really high pace of asset purchases, even as the economy is recovering. Granted the spread of covid, the lack of any further stimulus right now is not making this an urgent concern, but at some point people will want to know, youre really spraying the fire hose out there and is this level still warranted. So lets go back to the press conference heres fed chair powell. We also today had a full discussion of the options around the Asset Purchase Program and, you know, we understand the ways in which we can adjust the parameters of it to deliver more accommodation if it turns out to be appropriate right now we think that this very large, effectiveprogram i delivering about the right amount of accommodation and support for the markets and so it continues thank you craig taurus, bloomberg. Hi, chair powell. First, its great to see youre okay chair powell, what is the risk that we come out of this with lower productivity, weaker labor forcettachattachment, slower gr and a cycle of real Interest Rates . And if you think this type of scarring is a risk, im wondering whats stopping the Federal Reserve from having a more explicit dialogue with congress about the particular types of fiscal support we might need to avoid this outcome, to make sure that you push away from the zero boundary or that the economy does, when we exit this thanks thank you so you did nicely the risks of damage to the supply side of the economy, or scarring, as you put it we have been talking about those since the very beginning of the pandemic the risk is that for example, people are out of the labor force for an extended period of time, they lose their attach men to the labor force and it is harder to get back your skills atrophy and it is harder to get back in. If you dont get back in quickly it is harder to get back in. It holds down the individual and places a burden on individuals who may have this happen to them at important stages of their career it is important. So that is one of the reasons why our response was so strong and so urgent at the begin asking where we called this set of risks out i dont know how we can be much more vocal about it than we have about. Fortunately, the economic recovery has exceeded certainly the downside cases that we were very concerned about and even exceeded sorts of exceeded the baseline expectations now, thats so far we are a long way to our goals and you know, we are sort of halfway there on the labor market recovery, at best and there are parts of the economy where it is going to be hard until there is a vaccine. You know, the parts of the economy. So, you know, thats the supply side damage thats sort the third thing we talk about. At the beginning it was to provide relief and confident then the second part was to provide support when, and expansion when it came and the third was to avoid longer run damage to the economy. Thats all of these things i think we have been vocal you know, we will try to continue to do that. Those are thats, again that goes to keeping this episode as short as it can be, and avoiding unnecessary business, bankruptcies, unnecessary household bankruptcies and unnecessary long term stays of unemployment, or supporting people through them so they can maintain their financial footing and their lives and be able to go back to work in a productive way it is very important that you know, there is a real threat here of those thing. And, you know, we are trying to do everything we can to minimize that threat. [ no audio ] weather you anticipate any consequences if they are not extensive. Yes, thanks, first let me say we do think that the facilities have generally served their purposes well, particularly in supporting the flow of credit, particularly acting as back stops to private markets overall, we think the programs have gone well in terms of the extension, we are just now turning to that question you know, weve had a lot of things to work our way through right now we are just in the process of turning to that question and have of course not made any decisions and in the process this is a decision that we have to make and will make jointly. Thank you, david guerra wrote a piece this week in which we said we arein a globa liquidity trap and talked about the limits of Monetary Policy right now. She said fiscal policy will need to be the main game in town. It has been a busy week. I dont know if you were able to pick up the pink paper and read that piece but she does say 90 of advanced economies have rates below 1 i wonder if you agree with her principle, that we are in a global liquidity trap and what the consequences of that will be she talks about the need of a global cohesive approach to fiscal policy. My other question is how you follow the epidemiology [ indiscernible and i wanted to ask you about how you laying out what the ecd plans to do as you lent an ear to her dire warnings and the situation that europe is in, what can you and your colleagues learn about the second wave and third wave that you talked about when it comes to a policy response. Okay. Thanks two questions. First i take the sense of your question to be ass Monetary Policy out of power or out of ammo the answer to that would be no, i dont think that i think i think that we are strongly committed to using these powerful tools that we have to support the economy during this difficult time for as long as needed. And no one should have any doubt about that and we do not doubt the power of the things that we have already done or the things that we may do in the future i do think there is more that can be done. I also think that if you look at the stock of assets that we bought if you look at the facilities and the way weve been able to keep accommodative Financial Financial conditions acome dative i think we have been able to do a lot of things that provide very Strong Financial support of the economy we are going to keep doing that. We have said from the very beginning though, that this particular situation we find ourselves is is one where there is sudden loss of income on the part of millions and tens of millions of people it is not so much a typical recession where demand weakens, the fed cuts Interest Rates, Interest Rates stimulatend coma and the economy recovers it is a sudden shock where tens of millions of people are out of work and the fiscal response i think was very good and very probust in the United States it is certainly one of the reasons why the recovery has been as good as it has been so far. So i do think fiscal policys essentially essential here stimulating aggregate demand is one thing. But there is a part of economy it kind of will be resistant the that you need fiscal policy and health care approximately see as well i didnt see madam lad guards comments this morning but i took the source of that question to be the spread of disease in europe and what do we think about that yeah as i mentioned in my opening remarks, its a concern. We have a widespread spike in cases across the country, more in some regions than others. Even if we dont have i dont expect that we would sort of governmentimposed restrictions. It does seem likely toe ma maybe people who have begun to engage in activities that they had, flying, going to hotels, restaurants, bars, thing like that, that they may pull back in a situation where suddenly the case where is everywhere in your city, your state, your community. I think thats a risk we have as we go to the fall now and the cases spike that could weigh on Economic Activity. One would expect it would. We thought the same thing about the way we had this summer in the south and in the west and the economy seemed to move right through that this one seems to be larger and more widespread. In any case it is a risk is how i would characterize it. I would characterize it as a risk as i did in my comments. A followup about the passions of the fed chair. We listened to your rhetoric over the course of this pandemic and you talked about what the fed was doing, the reasons for doing it at first. You talked about the aboutance between monetary and fiscal policy. I think in your recent comments there has been more passion about the need for congress to do know. I know you are limited to what you can say and the degree you want to advise congress, the simple question, do you feel you are being heard . As you look at the prmgts for this economy and potential need for more fiscal policy do you feel like those who are crafting that policy, or could be, are listening to you and having a firm grasp what you are saying about how it might impact the economy Going Forward . Our main focus is doing our job. Thats what we are focused on, using the tools congress has given us and the assign men they have given us. I think that is the thing we think about night and day. I just know from the experience of the last cycle, it helps to have the whole government working on these things. This one is particularly that way. I dont i think you know, i i dont want to say whether i feel like i am being heard or not. But, sure, there are plenty of people on capitol hill on both sides of the aisle and both sides of the hill who see the need for fiscal policy j understand why that might be the case. Thank you fox business. Thank you mr. Chairman for taking the question. What would cause the Federal Reserve to shift more assets purchases towards the long term securities and tress res and change the spending also as a second on to that, if there is no fiscal stimulus package would that then trigger a buying of more Long Term Assets or change the assets purchases . So i dont really have a specific hypothetical i would put to you i would just say we understand there are a number of parameters that we have where we can shift the composition, the duration, you know, the size, the life cycle of the program all of those things are available to us as ways to deliver more accommodation if we think thats appropriate right now, we like the amount of accommodation the program is delivering and it will just depend on the facts and circumstances. We may reach a view at some point that we may need to do more on that front todays meeting one of the things it was about was about analyzing the various ways and having a good discussion about how to think about those various parameters which i thought was quite a useful discussion. Thank you, victoria guido hi, chair powell, thanks for taking the question. I wanted to ask about climate