Transcripts For CSPAN2 Federal Reserve Chair Powell On Monetary Report 20240712

Virus. This is two and a half hours. This hearing will come to order. This thing is another remote hearing by video. A few Video Conferencing for minors youre probably health used to these. Once you start speaking, there will be a slight delay before years displayed on screen. To minimize the background noise, please click the mute button until it is your turn to speak or ask questions. Theres a Technology Issue we will move to the next senator until resolved. I remind all senators there is a five minute clock that still applies and should be on your screen. At 30 remaining i will gently tap the gavel sometimes i forget to do that but i will try to do that better today. And remind you that your time is almost expired. To signify the process well get it rated to go by seniority for this hearing. Today Federal Reserve chairman Jerome Powell will update the committee on Monetary Policy development. In the state of the u. S. Economy. Its only been four months since the last hearing bursting is significantly different economy today. If one has been hard for the physical and Economic Impact of the covid19 pandemic. An ensuing shut down. Chairman powell, has stated that the Federal Reserve the strongly committed to using our tools to do whatever we can and for as long as it takes to provide some relief and stability to ensure the recovery is as strong as possible. Additionally the fed has purchased more than 2 trillion in treasury and mortgage securities. And assets in the midmarch. Because of this, the feds Balance Sheet and expanded more than 7 trillion. Congress the administration and regulatory agencies can take an extreme action to protect and stabilize infrastructure of our Economic System. The cares act is essential to that effort with the recent statistics indicate that our efforts are working. The bureau of labor statistics announced on june 5, encouraging sensor jobs and the economy. The non farm payrolls limit rest like to have million in may and the unappointed rate declined to 15. 3 percent. According to the report, these improvements in the labor market reflected the limited Economic Activity that have been curtailed in march and april due to the coronavirus pandemic and efforts to contain it. Title iv of the act provided a 500 billiondollar infusion to this exchange is stable and efficient fund up to 454 million of which can be used for support Federal Reserve emergency facility. Such as the main street living facilities in the municipal lending facility. The fed has set up funded by under and outside of the cares act. There is evidence that the mere announcement of some of those facilities has had a positive and stabilizing effect on markets. Even before they had become fully operational. A rarity positive effect is welcomed getting them fully operational ensures that they achieve their full effect. The Federal Reserve recently announced positive changes to the term sheets in the main street facility. That will allow additional is to access the facilities and announced that the facilities open for registration and have encouraged lenders to start lending as soon as possible. These are important first steps and then becoming fully operational. In addition to emergency lending facilities the fed continued to right size relations to increaset in the economy. In response to a letter that i sent to the federal making regulators unemployed, vice chairman noted that congress should continue modifying. The following was the regulators to provide flexibility under tier one leverage requirements as banks demand. There also several proposed rules of the agencies have been working on since before covid19. I encourage the agencies to finalize these rules as soon as possible. The recovered funds this hearing i look forward to hearing more on the state of the economy including its response to the cares act an update on the state of the 133 emergency lending facilities and how the facilities have provided necessary credit to households, businesses state and localments. An additional regulatory and legislat and increase credit and liquidity in the the economy. Chairman powell, i think you for joining us today. Senatorin brown. Thank you y mr. Chairman for holding this hearing. Thanks to chair howell for participating in this meeting remotely. We know theus the lives of hundreds of americans every single day. Across the country in big cities and small towns alike higher americans are calling for the government to respond to the Economic Impact of the pandemic. Their outrage over the killings of breanna and Breonna Taylor Ahmaud Arbery and george floyd and thehe demanding justice ann into the systemic racism. It pervades every aspect of American Society including our economy. Your job at our job in this committee is to oversee our Economic System and to be good stewards of our economy. The requires economy since it actually is. Were not overseen academic model of a perfect marketm has been woven into the fabric of our nations history since its very beginning. The details and we see how it works from jim crow to redlining to todays an important civil rights laws. You cant rely o to sort itself out. It never has. And it nl. We know black workers are less than their white peers into the same jobs have the same education levels. We know that black h families are far less likely to own their own homes and white families. One of the black students borrow more and pay more for college. We know black retirees have less money for retirement endless wealth to pass on to the children. Many mr. Chairman including Seven Members of the house andnd senate, suggest both in their statements and in their policies the black americans are uneducated and dont work hard to start businesses or invest. There is a false racist narrative. The real reason behind it disparities, is that we have for centuries have the systemic president denies black americans theri opportunity to fully participate in our economy and the peopn the market to save corporations and the white men who run them saint bono we cannot have government governments always. It is only been a question of who is intervening on behalf of corporations the privileged f to make this country work. And it is today. This economy run. It is of the ceos and other top executives. The people the soccer shelves deliver packages and care for our health. We finally started calling these workers, mostly women disproportionately bck and Brown Workers. We finally started calling these workers, what they are neutral. Them that way. Even before the pandemic, this economy was not working for working americans. Artisans workers face barriers, the housing and t healthcare, wealth equality and inequality continued to rise. Corporations making record profits, rewarded their increase evidence Stock Holdings and buybacks, they werent using those record profits to pay their essentialrepairs what they are actually worth. La seems in aligning the pockets of their investors and executives at the expense of theut of the government to push in the lending during this crisis. And c and the Federal Reserve to service life to supporter our economy but treasury help Financial Markets and corporations in a holding of the other end of the deal. We ask you to make sure the working americans remain employed and safe. They c ayafloat just look at the stock market. Number of americans out of job into the tens of millions. With all this out in the 2008 financial crisis, governmentn intejened. D they were all too happy t government handouts and in fact was considered patriotic. Millions of americans were left behind losing their jobs and homes. Eating paid less but many of them fought for more help the stimulus for the people who make the economy work in street interference. History repeats itself. As covid19 spread across the country earlier this year, many workers, most of black and brown themselves thrown from one crisis into the next. As it currently stands with no steps taken to actually ensure the money in the lending goes to workers, treasuring the d federally reinforcing inequities between workers andre wall street in between black and bro americans and white americans. Needs to do more to help t our state and local governments. For money directly in peoples pockets and i agree. Democrats have a plan to get more help directly to worker working americans, but Mitch Mcconnell is in no rush to help people he said he sees no words no urgency. La to pretend like where not in an economic recession to go to work without real safety precautions at the same low wages while they feel are wall street friends from liability if any of their workers get sick on the job. We want people to go back to work too of course they want us to return to business as usual. We know what that is. Government intervention to put some skilled corporations and the wealthy shareholders in the free mar else. We can know its return to that business as usual. The economy and justice are not separate issues. The americans who protest across the country and they want tenant tonm Police Violence and takes black lives and want to know their places. In the post will be sup Economic Security is a place to live. The want the president to ask it is citizens interest on his own party they want to again have faith in their government. How was it an offense are now the white house is not going to. The congress and the federal alike both taking action notice for the workers to make this economy run. That means providing help for immediate needs, means addressing the systemic racism and economic justice. It will hurt many people and make inequality worse of a a failed act. Anded companies can get bailed out, keeping their workers and companies can stop stop by back and difdence have wall street and actually adopt policy that combat inequality rather than supercharge it. This gives itead or lead to big businesses and link we during the last crisis. We need to be better stewards of the economy. Thank you for youryour leadership radar due to freedom of t your sure that you and the thousands of talented men and women who work with you are dedicated to taking steps to ensure this economy works for all americans. Thank you. Thank you senator brown pretty. Th you. The members of this Federal Reserves annual Monetary Policy. Our country continues to face the difficult and challenging times as epidemic is causing trem hardship here in the United States and around thes world. The coronavirus outbreak is first a foremost a Public Health crisis. The most important response has come from a Health Care Workers on behalf of the Federal Reserve, on express her security gratitude, the dedicated individuals who put themselves at risk, day after day in service to others ao her nation. Beginning in mid march economic fell on an unprecedented to thehe outbreak of the virus and the measures taken to control it spread. If after the unexpectedly positive may employment report, nearly 20 million jobs have lost since february. Recorded on the planet rate risen about ten percentageth points since decline in this corner, it is likely to be the most severe and record. In the burden the downturn is awful and us, instead the ones least to withstand the downturn. As discussed in the june policy households have experienced b sharpest drop covenant limits while job losses his hispanics and the downturn for the white and gaps while being long expansion had made some process and progr closing. Recently, some indicators that point to a civilization, and in some areasatmic activity. Easing of restrictions on mobility and commerce. In the extension of federal loans andsome businesses a up. While stimulus checks and Unemployment Benefits are supporting Household Incomes and spending. As a resgher in may. That said, the levels of output and implement remain below their pandemic levels pre pandemic levels. In the timings and recovery, ndmuch of been uncertainty about the disease andnc the effects. Until the public is confident that this diseases contain him a full recovery is unlikely. Moreover the longer down ts last of the greater potential for longerterm damage. From a job j loss, and business closures. Long periods of an appointment can erode workers skills and her their future jobs. An appointment can also negate gains made by many disadvantaged americans during the long expansion. Describe to us in our meetings. The pandemic is presenting acute risk to Small Businesses as discussed in the Monetary Policy report. On page 24. The smaller mediumsize business becomes insolvent because the economy recovers to slowly, what is more than just that business. These businesses are the heart of our economy and the work ofdi generations. With weak demand and lbrge decline for some goods and services such as apparel gasoline and hotels, Consumer Price inflation has dropped noticeably. But indicators of longerterm Inflation Expectations have remainednd steady. As output stabilizes the recovery moves ahead inflations should stabilize they gradually move back upze over time to her symmetric 2 percent objective. Inflation is nonetheless written likely to remain below it. The feds response to this to both maximum and employment and stable pricing along withnsibility toty. We are committed to using our fall ranging tools to support the economy. In march we put the policy near effects of covid19, employment and inflation buried in the heightened risk to the output. We expect to maintain Interest Rates at this level until we are confident that the economy has weathered recent events and is on track to achieve maximum stability goals. Weve also been taking forceful support the flow of credit in the economy. Since march we have been focusing sizable quantities of treasury securities. In orderor to support the smooth functioning ofts these markets. They areal to the flow of economy. As described in the military posse, these purchases have helped restore orderly Market Conditions in aitr more financial accommodations. As market functions has improved since the they experience in march about the reduced the purchases. This estate is smooth markefunction is there by foster theon effect of the transmission of Monetary Policy. We would increase our treasury securities that agency over coming months and at least at the current pace. Will closely monitor development and are prepared to adjust our plans as appropriate. To provide stability to the Financial System and is for flow of credit to household businesses and state and local governments. W secretary of the treasury established 11 Credit Facilities under 133. The report provides details on these stabilizing short and funding markets and providing more direct credit across the economy. Jim stabilized shortterm funding markets the fed set up the funding facility and the money market liquidity facility to help out close fund markets. Fed also established the pri deal of Credit Facility which provides loan and collateral to primary dealers that are critical in the immediate race shortime shortterm findings pretty directly support the credit to the households. They established a number of facilities to support the Small Business sector thatup we establish the Patient Protection program. The owner to bolster the effectiveness of the cares act. Program is launched this week to both small them inside businesses. Keloan facility support funding to both businesses and consumers. To support employment and spending weablish to corporate Credit Facilities help u. S. State and local governments ourommunities we set these up. The tools that were using under section 133 are appropriately reserved for times of emergency. This crisis is behind us, we will put them away. The agenda for w many of these facilities have been supported by funds from the cares act. We will be disclosing our monthly basis names and details of each facility. Revenues. Embrace our responsibility to the market people. And be as transparent as possible. We appreciate the need for heightened when we are called use our emers actions were only broader link sector response. Ngress passage of the cares act is critical enabling the Treasury Department to establish many of the lending programs. The cares act and other legislation provide direct help to the people and businesses. Mr. Export support can make critical differences not just with families and busin time of need but also limiting the longlasting damage to our ec acknowledging the tragic events that a spotlight on the Racial Injustice in this country. The feds and serve the entire nation pretty we operated in part of the communities across the country were americans are grappling. With issues of racial equality. I speak for this note place for racism. Everyone deserves the opportunity to participate fully in our in our econ understand there work throughout these communities families and businesses across the nation everything that we do is inservice or Public Mission pretty were c last week the fed announced positive changes to increase access the municipal facility the main street facility. And yesterday the Federal Reserve announced that the main Street Lending punder registration and requested an feedback on loan terms for non profit organizations. Can you provide me a timeline in the main street facilities the municipal itt facilities nonprofit loans will be fully operational. Sure, so the municipal facilities up and operating. Its available to the be approached by the eligible municipal entitiesti and what has done so far we have done an open to. It is fully open. As you mentioned the main le street facility open for lender registration yesterday. We expect the process to take a couple of days. And we encourage lenders who have completed the process to begin making loans to eligiblerr borrowers. We hope that happens. And in a week ordk so, available for her to purchase 95 percent interest in those loan effectively up and running now. In terms of nonprofits. What we did as you saw yesterday was to put out proposal to include nonprofits from the main street facility. With vaster comment on it. There are two facilitie nonprofit, are the main street that are or have essentially the same terms as the forprofit part of main street, the requirements for to be an eligible borrower are different to the financial characteristics ofac nonprofits. The ratio of liquid assets to amount of liquidity on hand on the operating statistics of the nonprofits. This is something were very much looking forward l to getting paid back on from the public on. The only turn that around, it e will take some time to get it. But i expect will move expeditiously on it over the next month or so. Thank you. Obviously, these are very critical. I hope to see them moving aggressively and as quickly as possible. Would like to turn to the economy is open operated inmates involvements in recent days and you dont the fed released projections of the Federal Reserve members and the Federal Reserve Bank President s under their individual assessments of the projected Monetary Policy. Most of the fence economic employment traits f 1 high of 14. 7 percent in april. Bonomic outlook is rightow. Can you take into consideration whether there is a differential between shortterm outlook versus thet longterm outlook and how you approached it. I think to think of into three stages. First stage was not shut down we seen what that would produce. Very sharp declines in the Economic Activity. An increase inne we be reaching the bottom of that right now. After that is reasonable to expect in this does assume by the way that that the virus remains reasonably well under control. It is an experience an event where it rises widely across the nation. Lets assume that does not happen. So shut down the second part will be the bounce back. You should see during that period the economy opening all sorts of things opening. People going back to work. Were apparently saying the beginning with that. Makes like to seeth large numbers of people during this period that back to work during the second. Of the beginning of the t recovery. Then we think most of them all forecasters night believe as for one were in february. Economy really worki broadly. Parts off the economy and will struggle to people together closely in large groups. E three stages. Right now we seem to be in the beginning. On the second stage. This morning we tell evidence, the legislation that you pass ppe and the Unemployment Insurance and the checks there is an out of that is supporting demand reopeni Economic Activity. Its a positive report. I will say the path of less, is quite uncertain but we appear to be entering that second stage of the economy reopening and businesses reopening. What time does it expire senator brownse. Thank you for your comments at the end of your remarks about racism. I appreciate that. Recently wrote a letter criticizing how most economists tree to raise and the models and assumpons. We provided that letter to you yesterday. Have you had a chance to read it pretty. I did yes pretty. Good yes pretty thank you. In his letter, it makes a point that many economic outcomes and that direct result racism, if to hear from so many other policy makers that Racial Disparities economic outcomes are explained by other factors education for example. We know that black americansbu even with the same levels are levels of education as their white peers still make less money than theires white peers. To think is correct that that u. S. Is fails to grapple with the economic racism. So professor springs is a wellknown scholar wholt his career around economic justice. He somebody was very well known and widely liked and admired here. We actually have a relationship that we highly value with the university. On just a things. Firstly economic discipline like every other aspect of our society, does have a good travel history when it comes to issues of race inequality. It the profession to examine whether systemic racism as reflected in the imperial work of the economist rate is particularly in anrea called stratification economics which he refers to which is a relatively new subfield in economics which focuses on the fre conventional economics to recognize and explain racial inequalities. That is really with the letter is about. I would think it is though of work left to do. But the economic profession on these and events are pushing all of us try to level its pretty. Thank you to that thoughtful response. When you commit to us to open minded study of how the feds policies whether in regard to Monetary Policy the feds failure to relate subprime lending by the various assumptions underlying our systems contribute to systematic basis in our country. Would you commit to an openended and openminded standing us. I will take thaty and think about it and talk to my colleagues about it. And come back to you. Before we commit to big study i want to carefully think about it. As you know ass an institution we are very on our things and we make that a very high principle for us. And we do and conder Racial Disparities nothing like that as a routine matter in her le me talk to my colleague and that. One of the reasons that have voted for chair was that when you were before your chair you are you helped lead the dealing with issues of race. As long way to go. Well have a long way to go. Butthe music was somebody else. President johnson positing his you know, the first an amazingly still the only ever edafricanamerican of bank n history decades. Stated the Many Americans adored the burden of unjust exploitation of an abusive treatment by institutions in to help reduce social inequities and bring about a more equal aquatic economy. When you say the fed when the institutions responsible for the on equality with the black and Brown Workers that they face in the country. Personally say that iwe do recommend president bostics letter or message that he put up ons really excellent. Very welly said. We responsible. P i would sort events of thequestion tha there is no doubt more thano address these issues. This feels like a time when people are going to be looking for ways to do more. Be doing that. So did you talk to him about whether he would suggesting the fed now or sometime unjust and slick music institution. Have you have these personal conversations a. I havent spoken with him since he published that message. I did send him an email thanking him for it. In your response, the fed can do better. So thank you pretty when youre doing to make sure that the fence spond, does not make theality in this country even forcetr. What we learned during the last long expansion is that a tightobarket is probably the best single thing the fed can do to communities as part of our long standing means. This was the best labor market we have seen in our lifetime. We are all highly motivated to ha everything were doing is to try to get the labor market back to was of 2020 february pretty tight labor markets. We learned that inflation did not move up. Really noticeably annulled the last two years of unemployment between three and a half and 4 percent. Theres tremendous benefits to those communities but also to the country. Thats what we can contribute. Try to model inclusion and force values the workk very focused on maximum senator shelby. Yes i am on center. I become on what we talked about earlier the economy how it is going and i think you are spot on as far as a lot of is predicated on and the coronavirus is contained. That is what is on peoples minds. A lot of people now they want to go back to work. Some jobs report. You see in your models are your forecast nextobs being up oral down or about the same. I would start by saying theres a t market. Thell move around even in the economy as it creates a survey in particulart really do it in person. With that caveat, the answer to your question is really i expectation generally is expectation of other forecasters, is that we will now see unemployment and employment increase. That is just a function of it lifting the social distancing matters, the shutdowns. Im moving back into large parts of economy to reopened businesses and resumption of normal business activity. This should result in significant amounts ofic talking an increase in activity from where we were at the beginning. But it will leave as well short of what we were. I think the public wants to have confidence to be able to return to these kinds of activities. I think that return tos that create that confidence will be high from an economic standpoint. You been on the. Fed a number of years. Even in an investor in at life in some fourth grade does it bother you as the fed chairman to see the Balance Sheet has no grown so fast. None of these are extraordinary times you have toim have extorting during measures. But to deleverage the Balance Sheet as it is growing and probably ctinue to grow, is going to be thing to the future and will be at a real challenge le for somebody is is not. It. So first i dont think that the balanceg like its current size presents any real threats to either i inflation or financial stability. Our principal as we dont want the Balance Sheet to be any bigger than it needs to be for us tor do our jobs. To achieve maximum employment. So i am not concerned about the Balance Sheet and the plans lacey for itla on the board at this point. Over time, i think what we did learn, i was the whole cycle of the Balance Sheet. First the last in a decline. It is just something tha be taken very carefully and very slowly. Soom now. Were not hall about now is providing the combinations of this economy and what it for as long as it needs it. That is all we are thinking about it. When the time comes we did from 2014 as you will we just froze the site size of the Balance Sheet. As the economy grows thexq is a very passive way and then tenant because any reaction in t market. There has Market Reaction when we try toot actually shrink thank you very much. Not only to testimony but your innovative and i think very oughtful leadership. Also for your decency. Thank you very muchce for that. Governments not able to rely on essenal services for and what impact this have on the economy. And without additional r the federal governance, how will he be able to provide the services. Single local governmentsovide lot of the Critical Services that people rely on but a all of tal with. The governments state and local governments and essentially all of the states ha you see when the revenues turn down an expense turnup. You see playoffs. They mounted Something Like like 13 percent of the labor force. It can really lay on the economy. If the financial straits. Very tight. What happens is they will cut essential services and secondly all of that will wonomy. So essentially that could be the biggest drag on the economy Going Forward. States being forced b literally, do you think thats a fair view. It. It can be a drag. And after the Global Financial crisis during the gripe sessions. And front number years. Prettyty well documented one of the other issues, senator broas this. Looking at statistics, state and local employers are asking americans, 11. 7 percent in the private worc again, a situation institutionally maybe not intently significant portion ofn shoulders of africanamerican workers because thes be laid off. Do you think thats adequate or accurate. It. I know the exact number but it certainly right in people have lost their jobs so far in the private sector, they come fro industry thats been directly heavily lower income people. And there over represented did. Report. It was encouraging. Did represent trying the labor m i think your previous, suggest that is encouraging news. What Going Forward still significant unemployment figures will be an finding us years perhaps. Is that accurate. A. Definitely. Good news. Maybe the biggest. Biggest surprise and everybody thought it would be. Youre looking claims data and other things. But the longer context though as you point out is Something Like close to 25 Million People have been displaced in theee workforce pretty either partially or through unemployment. So we have a long road us to get those people back to work. It is really good weti thought pretty we just have to acknowledge thats a lot of people. And as i mentioned earlier theres a broad the expectation that we will seek big numbers of people coming back the summer. And we certainly hope it turns out to be right. But also those people who work in the servicer to recover. They will b they will need, the find it hard to get back to work as quickly as thehe others. One off my concerns and having served but we thought the Great Recession of 2008 and 2009 in 2010. Unemployment rates will s high. Anna Unemployment Benefits will expire. And in fact what happens is you know in different areas of the country they will leg. So the point of my comments are we do need in your view to have much greater than the president and also, with the index to the surgeon Unemployment Rate so that we dont find certain areas for well behind and the lose their benefits. Soy think there will be a large number of able t old there will be a Significant Group that was left over after we get thelo employment balance. In the details of this are in policy. There are a lot of really interesting ideas tossing around about how to do that. But i do think there will be hardpressed to find work. They will need support. That is something i will be looking at is what kind of support they need and also, some of them will need to find new paths through the economy. And there be ways for them to do that. Thank you. Ai thank you and good morning. Thank you for joining us. Dupont to express how encouraging the Economic Data has been. Actually for little while now. We had tremendous increase in personal income in the month of ohapril. Its not terriblye main employment number was very encouraging. Retail sales tonight was really good news. Not for a minute suggesting they were outhe of if the anecdotal evidence has been very encouraging. I just remind my colleagues, theres no such thing as a free lunch. And we haverized several trillion dollars ofent spending and a variety of ways. Much of it has been ent. So think we should be very careful in evaluating what is necessary before we go b forward to. And mr. Jim and i want about Corporate Bond buying because when we pher the cares act, the concept of funding so that they could out and buy Corporate Bond us. Or directly, there are always two reasons for having this capacity. One was to ensure smooth functioning of markets. And for that, the mere existence of these programs have been remarkably successful. Record volumes of Corporate Bond market is functioning and function well. The second possibility was to provide liquidity to the company that is fundamentally solvent. The facing a sious liquidity ty problem because of the nature of the moment. It seems to me that continuing or broadbased corporate line abundance now and including setting up yet a new index for doing so, doesnt serve either of those purposes. Neither of those needs are being met. Ryand i worry it starts to look a lot like fiscal policy. Air starts to look a lower it spreads pretty despite the fact that the rates are incredibly low. It is certainly seems to me thatwhen the markets are already functioning smoothly, or not addressing individual needs but making these broad purchase. The signals that we get from the Corporate Bond market, can be extremely important in enabling us to detect problems. So im wondering what we need to be continuing broadbased Corporate Bond buying program now. Andd what is txit strategy on this. I certainly hope it doesnt have the negative effects that you mentioned it. So this is something we said we would beginning. You pointedtn out the markets reacted very strongly. This because they were going to do. One reason is the family feel the need to follow through and do what we said we were going to do pretty. On that, my impression it was aon this would be there needed and would be used as needed to buit is not needed, is not clear to me that to use this to show that youre willing to use it. I dont think anybody deficit. Increasing the things were buying. Were just shifting away towards index. If you look at the faqs, associated with this change, it will really depend on the market functioning. The continues to accrue, then were happy to slow raven stop the purchases. If it goes the other way will is there a problem with pump market functioning now. In the Corporate Market pretty. And improved substantially that we see very little demand. So we originally thought that was the advantage. Caution t these gains for market functioning by following through. I dont see and is wanting to going to the bond market like an elepha things. And snuffing outng or things like that. We want to be there if things turn bad in the economy direction we want to make sure that wehere. Also the ets. Disgraceful part of the market. The actual bonds are thereby ly dont need this right now. I get bats. But its not clear to me that that needs to be intervening actively in the Corporate Bond the markets right now. But let me move on to another issue. Last weekend my understanding is you suggested that the feds are considering whether to yield targets which reallyev mean something else. I wantl1 to discuss do a little bit. Very concerned. First idea of manipulating treasury yields to keep them lower than they otherwise would be involves lots of potential problems. It is clearly faking lenders. It big problems from pension funds. Price signaling. And i dont know how you get out of that. Jim our thoughts on the idea of establishing yield targets in the treasuryrg curve. This is som have never actually less we did after world war ii. A couple of the central ban reserve bank of australia. Its a tool that other Central Banks have chosen to use now. Meeting was brief people up on the history of it. An so that the people understand thed that sort of thing. Weve absolutely made the decision to move forward on its. As you have seen some of my colleagues and some of the speeches lightly raising questions about it. So is not a the sense of it is that if the market, if rates were to move up a lot for whatever reason and we wanted to keep the Monetary Policy. We might think about using it. But in some part of the curve. It is not a decision we made pretty sort of an earlystage thing where we are evaluating it. Thank you mr. Chairman. Senator menendez. Thank you. The tragic d floyd and Breonna Taylor, ahmaud galvanized millions to peacefully march in protest against systemic racism, equality and justice that has plagued our country since its founding. Minority communities have suffered economic dignity and also being disproportionately impacted by the other crisis gripping our nation wishes that covid19 pandemic. Enter powell, will there be longterm negative Economic Impact if 40 percent ofd and Small Businesses permanentlyhut the doors as a result of the coronavirus pandemic. Small businesses are under a Blood Pressure reading and tof answer your question would be yes, its impor. There be a longterm Economic Impact and 44 percent of black households and 41 percent of latino households are unable to make their next rent payments and are evicted to. Evictions and foreclosures and things likee that, can be very very bad not just for the individuals. But they arere very bad for the individuals involved but also that they can certainly weigh an economic things as well. Suitable to be a longterm negative Economic Impact is africanamericans and hispanicc Families Wealth which w is currently eight ten times smaller than the median net worth of white families is further depleted to. I would say would. Consideringsi the longterm Economic Impacts of the raced by covid19 one of the of Congress Failing to account foricious Racial Disparities in the next covid19 relief bill put it with the economy be better off if Congress Took action and mitigate these inequalities in the covid19 relief legislati senator i just wouldnt say that fiscal policy, is really for you ando think that once you have done so far has been by physical response. I think it is starting to see that in some of numbers we are saying. Statement i appreciate that. But my point that i am driving at here is that we cannot ignore the reality when one segment of our society africanamericans frand hispanics disproportionately affected by covid19 and their incomes and in their business potential closures pretty you cannot have that whole segment of the economy ultimately doing so worse than everybody else and believe that the economy is going to do well when you look at then that they havent. So i think it of us for the feds and the congress to with theses. Realities. Not just in terms of justice but in terms of the National Interest as well. Let me turn to another question as our country navigates this economic crisis thaope we remember lessons we have learned from the past downturns. During the Great Recession because to the stationocal they delete daylight economic recovery improved completely preventable if congress provides relief. Chairman phelps is a treated according to the Federal Reserve inflation adjusted data state and local investments continueti to fall for a full five years after the recession of traditionally endedy. J nd t mated youge unit going toedto abouty are proje Great Britain 9 for÷ france. I think 6 for it will certainly weigh in on the activity and trade of all kinds also europeans come and spend money on tourism lot. In washington, d. C. That all the some it does for the u. S. I want to yield back my timend a 0h int mr. Powell for the service and all that you have done the last few months its beenn extraordinary. Want to echo my about the systemic racism that theloor. Five of my colleagues, three republicans and three c democratsading thee letter from a birminghamy and the messageai of 1963 is as important it was then. Focused a lot on the data and this country particularly black population showing just under 17 hispanic Unemployment Rate in almost 19 favoring around 14. Bloomberg has reported that the businesses declined by 41 from february to april representing 440,000 businesses a stark contrast drop. The avalanche of evictions is here and for closures are not far behind. I want to focus my questionsnities and stead of theth downside the minority communities if Unemployment Benefits are not extended . They are substantially they make life tougher forhem. Measu are off the stage with some transition to where we can provide them to get back on the table and get back i assume. We dont take the position on the aspects of the fiscal policy but i would say a this. Theresoing to be a lot of people going back to work in the as we were just discussing in Entertainment Industry is going to be some form of support going rwardlikely to be appropriate the aistance wa of occasionst is tough ofime regards to the minit minority businesn before the started. So the theess aid is not i think as i mentioned in my opening businesses of america that is where theobs were created on net people are goingn and out ofnt want is and they did code insolvency that will play on the economyrs andthat is true for the minity businesses because of the Important Role that they play in the economyinority communities, they areeoill thatave . 8h impacts which is still ongoing particularlyecause the wind up sleeping in somebody elses basement or children ory thes ple in theirndemic is dealt with. Those aorth looking at. Towell and chairman crapo. Thank mr. Chairman. Chair powell, thank you for being here. And thank you for your has beenn absolutely historic and has helped us avoid a major i have a question just simply sheet. Treasure the increas 2. 9 million mostly due to the ca 430 billion by the investment take understand. So i dont know how long we can do that. The question isively willd catch think about rebalancing a this point . That is not our intention. It is a highlevelandpril w working. Sh shorttermd treasury obligations it was a difficult situation and we bought a lot. It wasnt i was a longe i know you dont gs on Interest Rates which i understand but just give us the impact to t there demandpaper, i would not want to spec might do. Reserveh currently in particular times of stress people want to you owned u. S. Treasury obligationseen for over a long time. Even as some o problems in the last crisis originated without standing that, people wanted u. S. Because we are the strongest economy in the mostd liquid markets. I have one last question, youve been very gracious with your time today the conversation with the my think ist. Nd i think were puttinge that wee protect the people that need t be protectedpn, the people that need to sitting there we have a numberin georgia of job openings that going field bect. I know that is something you consider as ut at the end not presumeellou what the ftt should do because its really not our role. I do tontinue ome form i think this awful lot of unappointed people for some we have 25 newly unemployed o partialleally fast which happen, there will still be enty ofm for while because t in travel,various places. I know theres a lot of inresting ideas thrn around windown up in8 . Their. Thank thank you senatorhank you mr. Chair and chair powell for being with us today iak again. We were more than three month as the support for know and youelf in your ening equalizer those already struggling because a safe affordable place to live, bo healthcare, low wages and poverty and especially the generation black and brown and indigenous people, ndheir lives. I think in this moment it is essential thats picks up the challenge and fulfills the america for racial and economico have a c is a rising narrative that wem iluding as nd to reopen the economy and before we know it we can alleo get back to normal, what im worried about working during our heads in the nd w from the impacts having an infected for not careful wewe dont change the way were doing back to will get back to our worst normal, normal that inequity. Let me focus if i can on the housing in particular, this is bad trends on in minnesota. The startribune recently publishewhat is cities, found 95 of class a apartment buildings the expensive ones, where people live, 95 of the rentersthe rentt but only about 88 of renters and the Affordable Apartment building, the older ones aret payment. I think we can see it helps if have our money we see the impact of the lowincome peopleal extended Unemployment Insurance and oed to make the 88 higher. Let me ask you chair powell, i owcific proposals but what would be the impact on thes not provide lpn wh think . I think if people fort evicted or foreclosed upon or things like their ability to t get back into the labor market becomes very challenged and moral economic issue at this particul will have fairly Large Population people who arjobs or to find a new job in their old industry. I think those are thi considering as y think of work would you expect if that were to happen that would put incredible pressure on theimes Public Private partnership the only units b revenue in order to keep those buildings up and running wou that . You can see pressure on well. Would you also, this is stunning for my home statecka own their the number is 76 whi family. Would youd of evictions and eviction forbearancehis would end up ex inequitn our economy right now . Ye would i think this pandemic the way ÷t hvice ecorticularly has been a realrts that earlier, and for th low wag percentage of minorities also i thi we for fiction bill senator brown and many others are 100 billion on rental housing and making it so much more difficult to recove and also exacerbating the fundamental and systemic inequities that we see in our thank y than. Mr. Chairman thank thank you i appreciate tr intellect and expertise to work to prepare our econo mr. Powell. Let me tell you im concerned we think ppp i think ppp employers, its been my hope that mainStreet Lending programs will be in kansasnt really company that emplo employees a job and we havar chaianimea rlly concerneday see mainstreetnding program not have a impac helping small and mediumsize businessehe country. The end result ist is to recover quickly and continuing unemployment perhaps a result in which largee to raise cash in share at the expense of those smaller commercialt. I have a lot for the Mainstreet Program i need to be assured its going t accomplish. But i think the mainstreetis essentially saying i will stand by a fairly narrow class of credit agreents. R as ip and for loans and neither dohey want of 5 of to me it appears t that incentivizes banks to originate these loans f newervous especially because if we have to make changes t so constituent binesses who employ lots of people in kansas. Can you give me your thoughts concerning my concerns and trying to reassureerns are unfounded. Yoursome of thes with appr broad which is different is aominated sector of the economy or series of the sectors of the economy bank credit all negotiated not like the broad market where theres a lot of standardization. It isis a challenge to go through we the Banking System to meet borrowersnks. We cant do due diligenre do. O serve their customer better, they also get aet generous interest on the bankersthis its als with other amount of Financial Stress over was in mch we realize there is still plenty of companies out therehe mastreet facility s nowre rak mand w or bought4;y b in the banks will be left with 5 get to origination fee and we will know a lotr more about the level of just j oan facility and we have t facilities forpr happens beginning we are very open to learning and adapting, we madeil them better structured to achieve theirinue to do your optimis pessimist and i hope you are correct is there a plan b or is that something thatdko to the markets of demand. All of thesefacilities if we are hearing about companies for whom alone and they do not qualify for the mainstreet loan systemst and shod, then t. We will certainly be adapting. Let me raise one other topic quare for me too read let me talk about it itll be quick. Taxes, and to realization that is am worried therell businesses that that is a for this in thepaustryous to rely upon net your thoughts in thatrrnd fed that we philosophy cares, Mainstreet Program under the spirit of uncertain and i think her businesses are looking for more certainty how this program is going to work. Es concerns and the uncertainty thatou can be brief onanswer please of ebit,ere looking at last years ebit, we indu a looking at that particularly for an example of an asset based approach that something that re looking upy. The main focus for now w the past prepandemicgs in any case and were into account t that thank you chairman paul. Thank you. Hollen. Thank you,en mr. Chairman, the h take up the justice policing act an the systemic im glad you made the statement that you did into youranted to ask you aent of where he wrote on friday systemic racism is a yoke thatem drags on the American Economy and that a commitment that nt economy. Do youtgree with that statement . Are you absolutely. Ll of her tools to addressssue i saw president other day theemployment rate in may 15 nothing really to celebrateut in the the reporting data we saw black americans and employment rate go up compared to previous months, did we not we did and over the longe unappointed running at approximately two timeste unappointed, thats the future all different parts of thebusiness cycle. And all these ingrained issues and aspecf o society for systems. Reet responded favorably tes to peopleyturn and you spoken them in the fact that 40 individuals under 40000 found themselves out of a comes tols hardest hit would you agree that fiscal policy is more issues then the instruments of the fed has other its disposal policy. In the long term maximum appointment is a great but we had the last couple of years is a 50 year low em communities hearing that from those c but for nowto policy in the shortse a lot o erased in a very short time and be to try to get back to where we were as soon as possib again. You agree that shoulry much so, it certainly i im not sure what your is as to whether you saw a letter, we had a letter we received thisrom yellen and over 120 other very respected economist about the urgent need to take more given what you said about the and fiscal podee more. I saw the headlines in the first twoce to read, i went across to just befe i walked in here. On fiscalolicy, would say, were not in position of giving youas done the mo overdone 14 of gdp done the most weve ever done and as thisout, it is likely there wille employment those industrieshe you i take it from your previous response, especially when it comes to policy is the mosective instrument to deal withhne lost 1. 5 mi localca levels overhe last two months thats a drag on the economy isnt i state and local government employers to our stop the loss o lx jobs of the state and local level . We did discuss this and i would say certainly area looking if provide the services and they have bget come very when revenue gs d go the economy. Ar the fact that i many cases s their physicals of july 1 as to whether or not to cut back their budget and lay peopleff. Yes. Mr. Chairmannh closing n all the negligent in leaving tow anxs others, thank you to both chairman in the Ranking Member brad. Nk you. Am herehairman and thankou chairman powell fay we appreciate it. Chairman powell immediate economic state location as result with the ppp prooronavirus relief funds will continue to be neclihfeadua sen. Thank. Cspan has unfilte congress, the white house, the supreme courts, you can watch all of cspan public ine or listen on the free radio app and be part of the National Conversation through cs programspan createdetelevision you by your television provider. S a look at wha website. At 10 00 a. M. Eastern the head of the federal Aviation Administration stephenfies before thetaorut the Aircraft Safety certif at noon thers fromFederal Reserve chair Jerome Powell about the coronavirus pandemic. At 1 00 p. Implementation of the payeck protection loal, again all of that is life are you to watch at cspan. Vember we will take back the house we will hold senate and we are going to keep the white