Automatically there must be onthejob Training Programs for africanamericans in this group to go into these areas and earn as they learn. In agri business we have 1890s college, 19 of them, Whose Authority and mandate, due to farm bill, is to take the money that weve given to the farm bill and spend in teaching, research and extension. Why not create the other spending category, for scholarships and loan forgiveness, students who will go in and take advantage of these job openings in agriculture business. All im saying is that, please, we have got to get the fed to get off the dime and put the issue of africanamerican unemployment on the front burner. That is the core of all of the domestic issues that were facing. And that is the childbearing group. What is there for them . Thats why we have so many of the situations in baltimore, in chicago and other places, and at least do a straight pipeline to why we got 1. 2 million of them sitting in the prisons. Would you help us with that . Congressman i would love to work with you on that. I want to assure you that we recognize how serious the problems are that you have discussed, and we take our employment mandate extremely seriously. And weve been doing everything that we can to promote a stronger labor market that will benefit africanamericans. Would you really consider getting an africanamerican for the first time in history to be a regional president of a Federal Reserve bank for the first time in history . Absolutely. Its our job to make sure that every search for those jobs assembles a broad and Diverse Group of candidates. And i regret that there hasnt been an appointment of an time for the gentleman has been expired. Thank you, mr. Chairman. The chair now recognizes the gentleman from florida, mr. Posey. Thank you, mr. Chairman. Madam chair, the number one thing i hear from the local Community Banks and Credit Unions is the need for regulatory relief. Thats not news to you obviously either. And these Financial Institutions provide Critical Services to our communities and theyre worried the overregulation is hurting not only their ability to provide those services but eventually is clearly leaning to increased industry consolidation. Id ask you what you consider to be the negative consequences, if any, that result from consolidation and the effects on the local and national economy. I think Community Banks play a vital role in supplying credit to groups of borrowers who larger banks often would not be able to serve. And that is a vital role in all communities throughout the country. So we want to see those banks thrive and are very focused on ways that we can reduce burden on those banks. I mentioned earlier some of the things that we have tried to do to reduce burden, and we will continue looking through the agripper process and by the regular meetings and contact that we have with Community Bankers to address the burdens that they face and look for ways to simplify regulation and reduce burden. Madam chair, do you think that relationship lending is important . Its been very important often for Community Banks in the kind of business that they do, so yes. Just a quick followup. Can you identify some areas of priority at the fed for reducing Regulatory Burdens on Community Banks . Yes. So we have been focusing, for example, on the duration of our onsite reviews and looking for ways to have our examiners spend less time on bank premises. Weve been looking at ways and have simplified and tried to tailor our preexamination requests for documentation. We have been conducting extensive training for examiners to make sure that our guidance is preferably interpreted and implied in ways that are cons t consiste consistent. We have a number in which we try to help Community Bankers understand what new regulations or proposals are relevant to them and which ones are not intended at all for their organizations. As i mentioned, the process is ongoing and we have been holding. Around the country to hear the concerns for banks with Regulatory Burden and will take all of the steps that we probably can to address the concerns that surface. We meet regularly with Community Bankers through an Organization Called cdiac which is composed of representatives from each of the 12 Federal Reserve districts. They come to the board and we meet with them twice a year, the full board of governors, to discuss their concerns and we follow up on what we hear. Thank you. This week the house is considering legislation that would require the administration to put forth a detailed plan to reduce the national dekt when ever the debt limit is increased. Common sense concept, i believe. We also just received the president s budget request, which would in the face of a 19 trillion, we just passed a 19 trillion mark on the debt clock, increased spending by 2. 5 trillion. When the president took office the National Debt was roughly 0 10 trillion. When he leaves office the debt is expected to have doubled to about 20 trillion. You have also voiced your concerns about the impact of failing to raise the debt limit. Failing to pay our bills, citing the impact it would have on the economy. I dont disagree but im curious, do you have similar concerns about the impact on the economy of failing to address our National Debt . How much debt do you think is too much . Well, i think if you look at the path that the u. S. Debt is on under current policies, it will rise from the present level to levels well above 100 of gdp and continue rising more or less indefinitely. And wherever you draw the line, youve got to conclude that thats an uhunsustainable econc situation. So i think its essential that congress address this longer on budget deficit issue. Time of the gentleman has expired. The chair now recognizes the gentleman from texas, mr. Green, the Ranking Member of the oversight investigation subcommittee. Thank you, mr. Chairman. I thank ms. Yellen for appearing today as well. And mr. Chairman, and ms. Yellen, of course Ranking Member, i want you to know that there has not been some sort of conspiracy among Congressional Black Caucus members to bring up this issue of black unemployment. Although i think we do talk about it among ourselves quite regularly. But i do believe that a basic premise that may be of help to us is a notion that in the beginning was the word. And not enough talk takes place among those who have the power to influence Public Policy with reference to africanamerican unemployment. To this end, i am concerned and would ask if you have in your Statement Given a specific reference to africanamerican unemployment and the statement that you made today . And i apologize if i missed it. But was there a specific reference to africanamerican unemployment . I referenced an answer to a previous question, the very high rates of unemployment of africanamericans, that persist even with current aggregate. If i may let me share this thought to you. If it ises and i believe you are in agreement that it is a serious problem. Not just a problem. I certainly agree. If it is a serious problem, i would ask that you make it a part of your actual statement that you present and that you publish it and that you continue to say to those of us who can make a difference and we should be able to make the difference here in congress, we have the responsibility here to focus as well. But if you would make it a part of your statement and if you would publish this, i think it can have a meaningful impact on policymakers up and down the line. So just a small request but i think it would make a really big difference. So im going to ask that you do. Im certainly open to doing so. Ill certainly take that seriously. Thank you. Now, lets move to the tailor rule for just a moment. You have indicated that the taylor rule would be a great mistake and that it would be detrimental to the economy and the American People. Could you in about one minute give some examples or an example of how it would be detrimental to the economy . Thats saort of a nebulous term and i think you should provide some clarity. Well, sometimes it provides recommendations for what Monetary Policy should be that clearly overlook important circumstances. If i may, madam chair. Would you kindly explain the impact that it will have on the economy. What would the impact be if it causes us to do something inappropriate and ill let you decide whats inappropriate. Well, either it would have a set of Monetary Policy that would result in much higher unemployment than would be desirable or, alternatively, there could be circumstances in which it would recommend an accommodative policy that would result in extremely high inflation. Now, i would say right now is an example. The taylor rule would close. And i think in light of the slow growth in the u. S. Economy and the fact that we have needed to hold the federal funds rate for almost seven years, for seven years at zero to achieve the progress that we have made, that setting it at the level that it would now recommend would be highly damaging to the Economic Situation. And weve tried to provide some analysis in the Monetary Policy report we submitted about what why that is. And in particular, this idea that the neutral fed funds rate, because of the damage from the financial crisis i must reclaim my time because i have one additional thing that i must say. I appreciate your commentary and i think a good many people have the point. I want to say this. We have some people that are visiting today. I dont want to have a response from them but i want to acknowledge their presence because theyre concerned about wages. Theyre concerned about wages across the board, especially as they impact working people. People who are on salaries. People who make minimumsen unded of stress. One of the main reasons for this a peerps to be recent Regulatory Reform as supposed me meant tear ratio custody banks typically place cash receives on deposit with the Federal Reserve. It comes from Pension Funds and other clients. However, the leverage ratio does not recognize the essentially riskless nature of fed deposit or necessity of these placements by custodians. This may cause the leading custody banks to reject customer cash deposit. My question is, is the Federal Reserve aware of the impact that this may be having on custody banks and, if so, what do you propose to do about it . Well, this is something that was considered what is the appropriate treatment of central Bank Deposits when the supplementary ratio was adopted. And a decision was made at the time that the leverage ratio is not our main capital tool but a backup capital tool that is intended to, in a crude kind of way, base Capital Requirements on the overall size of a firms Balance Sheet and that for that reason it should be included. We have more recently put in Place Capital surcharges that apply to the eight largest u. S. Banking organizations, including two custody banks. And its likely that once those are in place that they will become the binding Capital Requirement. But i would encourage you to take a look at that because its an issue for the bank. Weve heard of the problem and i will as you know, chair yellen, the bank of japan announced negative Interest Rate policy in an effort to increase funding and investment and spur growth. It follows on the heels of the European Bank announcement in march and economists have predicted that sweden, denmark, norway, canada, australia, china may follow suit. In a recent editorial in the wall street journal the former president of the Federal Reserve bank of st. Louis argued these sorts of Monetary Policy gimmicks will not create their intended effects and instead will only serve to divert at engine the from the actual structural problems that have plagued growth in the u. S. And around the world in the last decade. Regulatory burpd dense and tax policies that serve to constrain Business Investment and longterm growth. What do you say in response to mr. Poe . I agree there are structural factors that have restrained u. S. Growth and ive also been responsible for rising inequality in the labor market and its important to take steps to address those problems. They are steps in the domain of congress. But its important for the fed to try to achieve its mandate of having ensuring a state of the labor market where people who want to work are able to find jobs where there are a sufficient number of them and given the stress situations that exist in europe where there remains very high unemployment, and in japan where inflation has for well over a decade undershot their inflation objective, its a tool that has proven useful to them. I want to talk a little bit, you testified earlier over the past number of years the fed kept federal funds rate at exceptionally low levels and with that you testified that even with this, quote, exceptional, close quote, strategy, the economy achieved 2 growth. And you add we, quote, economy has been held back by headwinds. I wonder if these headwinds are man mate or to borrow a phrase here in the United States and i could identify some. The Affordable Care act, a lost reform bill that missed the mark, frankly, epa regulations, and these headwinds have hit folks in my district like a mom who now has to pay 400 bucks for her kid where she used to pay ten. And a coal miner taking care of a 5yearold, 3yearold, and 1yearold, wont be able to pay for his mortgage. When the economic history of this decade is written, the fed tried to do with Monetary Policy what should have been done with fiscal policy. Well, i think its also important for congress to address structural factors that are holding down growth. Tape of the gentleman has expired. The chair now recognizes gentleman from missouri, mr. Cleaver, Ranking Member of housing and insurance subcommittee. Thank you for being here, madam chair. Following through some things that were said earlier, i have a bad knee and ive had it operated on 11 times. And but the weird thing is that whenever i go to the hospital for another surgery, they never operate on my shoulder or my fingers. For some strange reason they always operate on the same knee thats been hurter. And i know thats weird. The issue is, we cant address unemployment in a certain sector by saying we can operate on the whole body and it gets better. Its never been true. Now, i differ a little from my colleagues in that i dont think its your responsibility. I dont think the fed has a responsibility even with the dual mandate. I think it is to be handled legislate tively and i dont think were going to get that done. The other thing im going to have to say and every time you come out and say it and we have to get off my chest, the because i do think that were declaring minority unemployment too big to curtail. And thats somewhat troublesome. But you know, the wall street and the big six banks, you know, are too big to jail. And, you know, you rob a Convenience Store you go to jail. You rob 300 million americans, you get a cocktail. And i think thats whats creating all of this anger around the country. I know you dont run the justice department. And i know you dont vote on legislation that could address some of these other issues. I think we got to say it as much as we can because i dont think i dont think the world is hearing us. Now, i will like to yield now the remainder of my time to the Ranking Member of the Financial Services committee. Thank you very much, mr. Cleaver. As you know originally i was thinking about dealing with the question of the subpoena, et cetera, except if you dont mind, i am so focused on out of this money that goes to these too big to fail banks. And trying to understand, number one, not only the fact that g D Goldman Sachs got 121 million, jpmorgan, 910 million, and that with the rise in Interest Rates from a 25 to 50 , this will double. This money keeps its going to big banks. Its a subsidy to keep them from lending money and we have this big need thats being discussed by my colleagues about this high Unemployment Rate. And the lack of creativity and thinking about how we can deal with this and these banks too big to fail who we are fining evidence because of the predatory lentzing shs et cetera, are getting support from the feds. Please, please explain that. Its an essential tool that we need to adjust the level of shortterm Interest Rates. And from the standpoint of the taxpayer, our payment of those interest on reserves, we have very large reserve balances. We have 2. 5 trillion roughly of reserves in the Banking System as compared with 20 or 30 billion prior to the crisis. The counterpart of that on our Balance Sheet is that we hold a very large stock of assets on which we are earning a substantially higher rate of return than we are paying to the banks. And that differential between what we earn on our holdings of longterm treasuries and mortgagebacked securities and the 25 or 50 basis points we paid to the banks, that differential all shows up in the taxpayers pocket. It is money that congress can use to address all of the problems that you have discussed. Over the last year, we transferred 100 billion because of that. Now, if we dont pay interest on reserves, and must use another technique to adjust shortterm Interest Rates, likely we will be forced to greatly shrink our Balance Sheet in a rapid fashion and the total amount of money going from the Federal Reserve to congress will be significantly diminished. In addition to that, it would have very adverse effects on the economy. Well, i want you to know that not only am i concerned, it looks like we are about to have some bipartisan concern on this issue. I hear that. While i understand the argument that youre making about the big banks, we cannot feel sorry for them in terms of the amount of Interest Rates, you know, that they are getting or not getting, et cetera. We really do have to deal with this issue. I understand what you are trying to explain by shortterm Interest Rates, but if i may, madam, let me just let me just say this. That we have an opportunity with t this to allow for loans from some of these small Community Banks that they are not getting. And if that money went into the small Community Banks, they would be able to do job creation and to support Small Businesses, et cetera, and we just dont get why they are precluded from doing this and increasing the Job Opportunities in the community while we are given this subsidy to the big banks. We just dont get it. Although i agree with much of the Ranking Member has said, she has long since spent her time. The chair now recognizes the gentlelady from utah, ms. Love. Thank you, mr. Chairman. Thank you, chair yellen, for being here today. Chair yellen, im increasingly concerned about the impact of dodd frank regulations on real Economy Economic growth and especially job creation, which id like to just ask you a few questions about. If you look beyond the headlines, the headline numbers from last fridays jobs numbers and includes discouraged workers and the underemployment, real underemployment real unemployment remains high, nearly 10 . In addition, millions of people have stopped looking for jobs. They have dropped out of the workforce. And its a dynamic that is driving the nations workforce Participation Rate to an alltime low at 62. 7 . And i want you to know that i agree with my colleague on the other side of the aisle, representative scott, when he talks about the large number of unemployment with our young black americans. Meanwhile, Economic Growth of slow to just 0. 7 in the fourth quarter. Im concerned that the fed and other financial regulators may not have a firm grip on the cumulative impact on the real economy of thousands of pages of the new doddfrank regulations. Especially new capital and liquidity rules. Im wondering if you share some of those concerns. Well, i recognize that some of the new concerns are burdensome and do raise banks, cost to financial intermediation. In designing those regulations were always trying to achieve a balance between the benefits of creating a sounder and more resilient Financial System that is less likely to be subject to the kind of devastating financial crisis that we had. Were balancing that against burdens that can raise the cost of capital or diminish financial intermediation. And we have tried to strike reasonable balance remember that the financial crisis, nothing resulted in more harm for a longer period of time than the financial crisis that we lived through. And i think we now have a much safer and sounder Financial System. Okay. So another study by the American Action forum found that Consumer Credit availability deteriorated 12 to 14 since the passage of doddfrank. Im also concerned that the growing number of borrowers unable to access affordable banking, bank financing, a lot of borrowers from districts, lowincome districts, lowincome areas in my district, west valley, these are hardworking americans that have that are turning to high costs and unregulated online lenders to be able to get the access to the credit that they need, whether its purchasing a car or even starting a small business. Theyre finding that their ability to access this type of credit is unavailable to them. And so im wondering if you also share some of my concerns about Credit Availability in the higher costs alternatives. Well, i do share your concerns about Credit Availability and i think its clear that Credit Availability has, in particular, segments been diminished. Home loans, mortgage, for example, for individuals without pristine Credit Ratings is really difficult, remains difficult to obtain. In part we have regulations that are meant to address harms. I think lending standards were too easy prior to the financial crisis. We dont want to go back to lending standards that are so loose that they lead to the kinds of predatory lending and harms that we had that took a toll on the economy and on lowincome households and communities. We need to achieve a reasonable balance and were searching on that. Being on the subcommittee of Monetary Policy i wanted to ask you a quick question on Monetary Policy and whats happening in europe and what are the implications. I may have stepped out of the room. I dont know if you addressed this. Quickly, implications of european financial instability on the american Financial System. What are the implications of the Federal Reserve and the ecb pursuing divergent monetary policies . Well, the ecb has been ideaing high unemployment and inflation that slipped very meaningfully below their 2 goal by putting in place negative Interest Rates and largescale asset purchase programs. The u. S. Has done better. Were among advanced economies, about the strongest. So we have divergent monetary policies. Its put upward pressure on the dollar over a long period of time, which is harmed manufacturing and exports. So it has resulted in negative influences on the part of our economy. Time of the gentle lady has expired. The chair now recognizes a gentleman from missouri, mr. Clay, Ranking Member of the subcommittee. Thank you, mr. Chairman. And thank you for being here. The Federal Reserve has a congressional dual mandate to seek maximum employment while limiting inflation. To limit inflation the Federal Reserve raises Interest Rates which slows the economy by discouraging people from borrowing, to buy homes or cars, and discouraging businesses from investing investing. But this reduced demand, businesses will hire fewer workers and, as a result, workers will have less bargaining power, meaning they will be less likely to get paid pay increases. The decision to raise Interest Rates based on assessment of the open Market Committee of the Federal Reserve, about whether inflation or unemployment poses a greater threat to the American Economy. Unfortunately the members of the fomc largely come from the financial industry and, as a result, tend to be more concerned about inflation than the population as a whole. And less concerned about unemployment. So how do we square that . Madam chair. First of all, i want to say that the committee is deeply focussed on unemployment. We have two objectives, not one, maximum employment, price stability which we have interpreted as 2 to 2 inflation objective. And i would really take issue with the idea that we are not focused on achieving our maximum employment objective. We are. Monetary policy has been highly accommodative. The fed funds rate was at zero for seven years. And we also have a large Balance Sheet that is provided a lot of additional accommodation. So we are not talking about tightening Monetary Policy or a tight Monetary Policy. We have an economy that now has made substantial progress creating 13 million jobs with the Unemployment Rate down to 14. 9 . We took one small step to to raise shortterm Interest Rates but continue to have an accommodative Monetary Policy which we see as consistent with further progress in the labor market. So its not that were trying to reverse progress. We continue to see even with modest increases and Interest Rates, further progress and we want to achieve it precisely because we think that although the Unemployment Rate is at levels that are probably normal in the longer run, they remain slack in the labor market and we want to see more progress. Not to cut you off, although we could get to 4 unemployment. But, look, while we are pleased to see that new jobs are continuing to be created in our economy and to learn that the Unemployment Rate last month fell below 5 broadly, these positive signs may lead some to ignore the persistent economic challenges faced by africanamericans in this country. The current Unemployment Rate for africanamericans, for example, remains at nearly 9 . It is a commonly accepted view, access to gainful employment is one of the most important factors in supporting economic mobility and improving health outcome. It is also widely known that in areas where higher rates of unemployment there is a lack of consumption, increased crime rates, reduced school funding, and reduced political shuliolit. Please discuss with us any actions youve taken or directed your staff to take to identify solutions to help remedy the historical and continued ratio disparity between Employment Opportunity for africanamericans and whites. So our staff produces statistics that are among the most important in documenting and highlighting disparities in the Economic Situations in terms of assets and income by Demographic Groups. And i have personally given speeches highlighting those statistics. So our staff certainly looks at and does work to document those disparities. And in our Community Development programs and work we discussed earlier that relates to the cra, thats an area in which we have the capacity to try to identify particular programs that will be helpful in low and moderate income communities that suffer from special disadvantage in the labor market and to try to identify programs that work that we encourage to be adapted on a broader scale. The time of the gentleman has expired. Id like to work more with you in that area. The chair now recognizes the gentleman from north carolina, mr. Pittinger. Thank you, mr. Chairman. I would like to just welcome those who have come today with your tshirts on, what recovery . Let our wages grow. Whose recovery . Very pointed and clear statements. I really commend you for being here and seeing this progress. Yes, the reality is that this recovery is the most dismal, slowest, tepid recovery weve ever had from a recession in recorded history. And we look at the realities of this recovery. This last report of new jobs was only 150,000 new jobs. We have 2 dismal Economic Growth. We have the people who, frankly, Demographic Group that is the lowest recovery is the lowincome minority people in this country. That Demographic Group has moved up the ladder less than any other group, albeit an intense effort, well intended, im sure, by the obama administration, by chair yellen, but through it what we have seen is very accommodative Monetary Policy, high regulatory environment, weve seen obamacare, weve seen the highest Corporate Tax rates in the industrialized world. All of this has achieved this dismal recovery. And i would say to you the contrast is, back in the 70s we had the same type of dismal economic outlook. High inflation, high unemployment. And yet what happened . We reduced regulatory environment. We reduced the tax burden. And the economy took off. We were creating 300,000, 400,000, 500,000 jobs a month. One month a million jobs. We were growing up to 6 . It seems to me that logic may come in. Perhaps wellintended policies have had an adverse affect, adverse outcome of what was ever intended. Chair yellen, i commend you for your work and what youve sought to do, but it seems to me with these accommodative e ivive pol have contributed to where we are today. I would say, chair yellen, i would like to thank you and your remarks that you made reference to the fact that there are those who are available to work but not actively searching for work. Youve also made reference to working those who are working part time and cant get fulltime jobs. Now, these numbers are not included in the current Unemployment Rate of 4. 9 . So reality were really talking around 10 , 11 , 12 of the stats that i have seen of real unemployment. Would that be correct, chair yell snn. Broader measures of unemployment are significantly higher. For example, a definition that the bls refers to is u6 that includes both of the groups you mentioned, involuntary parttime i want to make discouraged 4. 9 . Its disingenuous to say to the American People these policies have contributed toward 4. 9 unemployment. Reality its in the real world where people are living and some of them are here today, its far less. And i think that should be understood and absorbed by these wonderful people who come that the types of policies that have been enacted, been enforced, this last seven years, have worked against your interests. And what grew the American Economy was Small Businesses who could go get loans, an entrepreneur, the life blood of our economy, cant go to a bank today to get that new loan because of compliance requirements. They are the people who create those new jobs. And on top of that, you have the burden of the obligations of obamacare and small business. What are they doing . Cutting jobs so they dont have to comply. What will grow your economy . What will create the jobs that you earnestly want is an open market where companies can grow and not have this intense regulatory environment, where theres through monetary accommodative policy or through onerous regulatory environments placed upon them. I want to encourage you with that reality that we can find that type of opportunity economy. I would say to you, chair yellen, the regulatory rule book, its been a constant state of revision over the last six years. Can you see the benefit then as a result of what we discussed and pausing this process in order to assess the Community Impact these regulations are having on the economy before we proceed further . Well, we have several regulations that we intend to put out during this coming year. And in terms of the list of what was mandated by dodd frank, weve made substantial progress. Consider that outcome were seeing today, i think it needs to be done. Time. Time of the gentleman has expired. The chair wishes to remind members we expect to excuse the witness as close to 1 00 as possible. The chair anticipates getting through perhaps four more members. The chair now recognizes the gentleman from the super bowl champion denver broncos, mr. Perl. Thanks, mr. Chair. And chair yellen, thank you as always for being here today. And i was going to go a little off topic with my first question to say how about those broncos. But way to go. The chair already beat me to the punch. But i do want to talk about your overall conversation today. I want to thank you and i want to thank the Federal Reserve. I want to start with the chart that we have on the board which is really shows what happened at the end of the Bush Administration when we went to 10 unemployment. Under obama, were down to less than half of that. Okay . So thats your chart number two in your monetary report. Although the republicans dont want to let the facts get in the ray of the way of their rhetoric buzz then chart number four shows that after some time and thats on page 5, chair ways are beginning to move up after we started getting people back into the job market. Chart six, oil prices way down. Chart seven, inflation even. Chart 13, wealthy income, disposable income up, quote, a robust 3. 5 . Chart 15, Household Debt service, way down. Chart 20, mortgage rates, down. Figure one on page 37, unemployment down, looking at the longterm and core price inflation, even. Those are your charts. Those are the facts. Now, have wages gone up as much as we would like to see . No, but we had to get a lot of people back working. Now were starting to see them move. So the chair went through a whole list of economists because obvious his didnt have a lot of questions. He wanted to list a lot of names. There were a couple of guys there with the hoover institute. You know, so herbert hoover, grand old republican president who led sbus tus into the grade depression. Not the kind of economy i would like to see. All right. George bush, we go from 5 unemployment to 10 unemployment. We lose millions of jobs. Under barack obama, back down to 4. 9 . In colorado, were at 3. 5 . So i just want to thank you and i want to thank the administration for getting this economy back on track. Now, can we do better . You bet. How would you suggest that we do better, how this economy can get moving so that the folks here can see some real growth in wages, which i think are beginning to appear, or what would you suggest . So our objective in terms of what we can do is to try to make sure that the picture that you have put up here shows continuing improvement in the labor market. I agree with you, i would say the signs of wage growth increasing, theyre tentative at this point. There are some hopeful signs but i think if the labor market continues to progress, we are very hopeful we will see faster progress on wages. And well try to keep that progress going. Thats our objective. Inflation is running under our 2 objective. I expect that will move up over time as well with appropriate policy. But i appreciate youre saying that some of the burden should also be on congress and others because there are so many problems in the labor market and in particular groups weve talked a lot about africanamericans and the problems they face. Theyre not the fed of course has a role to play but job training, educational programs, programs that address other barriers in the labor market. I think this is congress job to address. Productivity growth is very low. I think congress has always had a role in supporting basic research, making sure that the infrastructure of our country is adequa adequate. And you know, putting in place programs that make sure that training and education are widely available. All right. Let me move to a soft spot that i think exists in the economy. And you and i have talked about it before and thats on oil and gas. And the fact that the Saudi Arabians are pumping like crazy into what appears to be an oversupplied market causing the price to drop a lot. Which in some ways is very good for all of us because it saves us 10, 15, 20 bucks a week or a month in our price at the pump. But it also is causing some job losses in the manufacturing sectors, oil and gas obviously, transportation. Can you comment on what the fed is doing or reviewing when it comes to oil and Gas Production . So were taking account, as you said, of the fact that the Energy Sector is very hard hit. Were losing jobs there. But with respect to employment, its although there really are very severe losses, its a pretty small sector of the workforce overall. Were seeing massive cutbacks in drilling activity. And thats rippling through to manufacturing generally where output is depressed. So it is having negative consequences. On the other hand, if you look at the difference in oil prices now relative2014, for the average american household, were looking at a savings of a thousand dollars a year. And thats boosting consumer spending, and we have got these two negative force, positive forces, were trying to factor all of that in. The time of the gentleman has expired. The chair now recognizes the gentleman from illinois, mr. Holtgren. Thank you, mr. Chairman. As you may know the Financial Crimes Enforcement Network or finsen is in the process of finalizing new requirements under its Beneficial Ownership rules. While i fully support efforts to curb terrorism financing, it seems the application of finsens rule to certain nonbank subsidiaries like Premium FinanceCompanies May not be appropriate. I understand that my staff already is talking with the fed about this issue, but wondered if i could get a commitment from you today about trying to find clarification for if these rules apply to Premium Finance companies that are subsidiaries of banks. Im sure were happy to work with you on that. Thank you so much. When you testified before the committee back in november 4th of 2015, we discussed the impact of the supplementary leverage ratio on custody banks. At that time you described it as a kind of backup ratio that works as a backup to risk based capital standards. When responding to questions from congressman rothfus, you stated when the supplementary leverage ratio becomes effective, it will likely become the binding Capital Requirement for some custody banks. I understand some of these custody banks already feel they must discourage customer cash deposits. These institutions have highly liquid, low risk Balance Sheets that support client needs. In light of this concern, will the fed consider adjusting the Capital Requirements for excess cash deposits, held with the Federal Reserve . So im not sure if they will become if the supplementary leverage ratio will become the binding constraint or not. I didnt intend to say that it is the binding constraint. There will also be socalled siffy capital surcharges that will come into effect that may make those the binding constraint. I mean, this is a matter that i understand what the issue is, we can look at it and discuss it, it was debated at the time. There were considerations on both sides, and a decision was made to include fed deposits. You know, it is something we can look at, but it was considered. I hope we are able to discuss that and also look and see if it is necessary for us to have congressional intervention as far as legislation to change the rule. Let me move on. Im pleased by the news that the Federal Reserve has been engaged with the Insurance Industry on rules. What are your thoughts on how that process is proceeding and when might we expect to see proposed rules from the Federal Reserve released for Public Comment . Were working very hard on that. I dont have an exact timetable, but we are expecting to go out with for each of the firms notice of proposed rulemaking, so the public can react to these rules. The staff is fairly far along in developing these, so my hope is it wont be too much longer. We have worked hard to have the appropriate interactions with the firms and other regulators to do this right. I appreciate your work on that. From illinois, insurance is important, we got some Wonderful Companies there. They got questions and i appreciate interaction and hopefully resolution relatively quickly. One last question, will the Federal Reserve issue propose capital rule for all insurers it supervises and if you can explain why or why not . Im not positive. I think for the particular civvies designated ig and metlife, theyre likely to be Firm Specific rules, but im not positive. Let me get back to you on that. Thank you. Thank you, chairman yellen. I have an additional minute that ill yield back. Gentleman yields back. The chair recognizes gentleman from minnesota, mr. Allison. Thank you, mr. Chairman and Ranking Member. As we start out, i also want to thank some of the folks who have joined us for the hearing today, good friend of ron harris is here from minneapolis, good to see you, ron. And i want to let you know that this active citizenship of coming to these hearings, watching things is exactly what is needed in order for this government to function properly in my view, this is what democracy looks like. Thank you, all, for being here. Let me, miss yellen, chairman yellen, let me point your attention to the words of mr. Nariana who is a former minneapolis fed chair, outgoing president of the Federal Reserve bank of minneapolis. He made on Martin Luther king day, he wrote a blog and here is what he said there is one key source of economic difference in American Life that is likely underemphasized in the fomc deliberations race. He went on to say that for the year he went on to say he searched through the transcripts of the fomc meetings the year 2010, first year on the committee, and a dire year for africanamericans in our labor market and that year a total unemployment rating ceded 9. 25 every quarter, but for africanamericans, 15. 5 . Today, now, white unemployment in minnesota is 2. 9 as of december 2015, black unemployment is 14. 1 . And in minneapolis, white unemployment is 4 , but overall white unemployment is 4 , but black unemployment is a shocking 18. 9 . So i say that because, i mean, this is something that i think needs the attention of the chair. And you may i dont know what constraints you believe are out there, but, you know, people race matters when it comes to how people experience our economy. And if we dont discuss it, talk about it, then we wont ever get to the heart of the matter to how to fix it, to make equal justice for all. And so i guess my question, you know, and ill quote one more time, he said as well as we all know too well, race matters, the average africanamerican experience with the economy is different than the afternoon white persons. My question is, what do you make of the commentary from the previous minneapolis fed president , in your view is there adequate discussion, attention of the Economic Situation of africanamerican workers within fomc deliberations . And if there is not, i suspect youll say theres not, what can we do about it, how can we focus the committees attention on this segment of our fellow americans . So it is, of course, important that we look at different groups and particularly those who are suffering the most in the labor market. And im surprised there was no specific mention of race. It is in 2010, the Unemployment Rate was substantially higher than it was. The committee was very focused at the time on what we could do to promote a stronger labor market. And i suppose because our tools are not ones that can be targeted at particular groups in the labor market, it was clear what we needed to do and that was to support a stronger labor market more generally. Forgive me for the interruption, i definitely think that i get that part, but i would rather talk prospectively. The past is what happened and there is no change in it. How can the fed chair get the fomc to say, wait a minute, not all americans, particularly africanamericans are experiencing this upsurge in economic activity. For black americans, were still in the midst of a very serious depression recession. What can we do about it. And again, im not here to say to wag my finger about what happened, we know what happened and it wasnt right. But in terms of what is happening now and what can happen, what can you tell me . I think youre right, that we should pay adequate attention to how different groups are faring in the labor market. We have made clear that we dont focus on any single statistic that the Unemployment Rate is only one measure of what is happening in the labor market, and it is appropriate for us to really try to do a much more detailed assessment of where things stand and what we should be aiming for. Time of the gentleman has expired. The chair anticipates calling upon two more members, mr. Bar and mr. Delany and then excusing the witness. The chair now recognizes the gentleman from kentucky, mr. Bar. Thank you, mr. Chairman. Chair yellen, thanks for being back before us. The last time you were here we talked about a qualified clo concept and you were kind enough to respond to that question in writing. I want to thank you for that and particularly thank you for recognizing that the qualified clo concept could be considered a positive development in the market. And id like to continue our discussion about the role that regulation could very well play in terms of being a source of economic instability, particularly in our capital markets. The