Criticism or in praise. But to undermine the independence and the credibility of the Federal Reserve is a very dangerous action that may be very difficult to undo once it is out there. And i dont believe these are just abtract discussions of the potential for undermining the credibility of a central bank will have a direct impact on the economy and ultimately on our constituents back home. And i believe that members of congress have the added responsibility as elected officials to uphold these important norms that have guided our country for decades. With that i would urge my fellow policymakers here in both the legislative and executive branches to exercise caution and prudence when it comes to these types of krit sicriticisms. Turning to a question, attorney yell yellen, i believe one of the most critical challenges we face in our Banking System today is cybersecurity. We face tremendous threats every single day as i know you are well aware. The warning signs are very evident. One example was in february 2016. Hackers successfully stole 81 million from Bangladesh Central Bank by sending false payment requests to the new york Federal Reserve. Since this hack was first rorltded additional breaches have been uncovered including attacks in vietnam, ecuador and more. These hacks are all been through the swift, society for worldwide interbank Telecommunications Banking network used worldwide by more than 11,000 Financial Institutions. I use as an example not to speak ill of swift, who has pledged to take steps to strengthen the security and that of their partners but rather to just illustrate on a global level that we are only as strong as our weakest link when it comes to cybersecurity. In august of this year i wrote president obama to put the topic of International Cybersecurity on the g20 agenda and in the mos followed i am pleased that the group of seven introduced eight suggested principles for private firms and Government Agencies to follow. And i continue to believe this is an issue that we must do in a collaborative and international manner. So my question to you is what steps has the Federal Reserve take on the ensure both internal cybersecurity as well as cybersecurity of Financial Institutions overseas . You currently play a central role, you will continue to. What assurances can you give us, please . So let me start by saying that i agree very much with your assessment. This is one of the most significant risks our country faces, and we are cooperating with the regulators as you indicated internationally, working with the g7, cooperating with Financial Institutions to make sure that we have a system that is prepared to deal with cybersecurity risks. We are very focused on this in our own operations and i can provide you more details if youre interested in the various things that were doing to make sure that our sewn systems are safe and meet the highest standards. Were also working closely with the Financial Institutions to make sure the controls they have in place are part of our supervision. We recently put out an advanced notice of proposed rule making that suggests Higher Standards of cybersecurity protections for institutions that are systematically important. And for those that are really interconnected where a problem could spill over to the entire Financial System we are proposing the very highest standards that those firms should meet given the fact that they could be a source of vulnerability to the larger Financial System. But i would say that while were focused on this in our own supervision and were working closely with other financial regulators and with the u. S. Treasury has taken the lead here, this is something that Congress Needs to look at very carefully. Its not just a matter of the fed and Financial Institutions. Risks involve merchants and others involved in the economy. And it is a very broad threat that we alone are not able to deal with adequately. I hope you this stay involved. Well, i will, chairman yellen, and look forward to taking you up on your offer to sit down and have a more detailed discussion as to what is happening at the Federal Reserve. I serve on commerce as well as Homeland Security committees. All of this merges so what were doing together here. As you stated yourself, this is the most significant threat we face is cybersecurity so i look forward to working closely with you. Look forward to it. Thank you. Okay. Well, members coming back and forth. We have this byzantine process of Going Forward here. I think youre between votes, is that what you said . Is he on the list of yeah. Were going to give you your five minutes, then senator kwlooif will be next. Thank you. One of the controversial things in the Federal Reserve, and i want to to ask you about this, is last time we were in a crisis you bought a lot of mortgagebacked securities. Correct . We did. And do you feel you paid above market value for those securities or did you pay above market value for those securities . No. We always purchase securities in the open market at market prices. Okay. Could you give me a description of other private bonds that you purchased over the last few years . We have not purchased private bonds. Were only allowed to purchase treasury and agency securities. Okay. How would you describe mortgagebacked securities . Well, those are agency securities. Theyre issued by fannie and freddie and so you consider that the equivalent of a government bond. Well, its an agency bond and that those are permissible investments for us. We buy securities in the open market in a bidding process, an auction process, that we purchase at market prices. And do those mortgagebacked securities have a face value, so to speak, or do they i guess ill describe it that way. Do they have a face value or is there a value say, if, all the mortgages would be paid in full . They do are have a face they do have a face value and then of course they trade in the market and prices can deviate from those face values. And when you were purchasing them, what were you paying compared to the face value . I honestly dont have weve published that information. I dont have that information at my fingertips. Maybe its an unfair question. 90 , 80 , 70 . We would have been paying market prices for securities at that time. Yeah, i know, but was that 70 of face, 80 you know, i realize you dont know exactly but you must know about. I dont think the discounts were nearly that deep, but i may be wrong. Okay. Okay. Thats my final question. Congressman, thank you. Senator lee. Thanks very much, mr. Chairman, and thank you, chair yellen, for being with us today. In 2013, there were 12 banks, as i understand it, that controlled 69 of the industry assets. And i think weve been seeing a market increase in the share of revenues concentrated in a relatively small handful of firms. I see youre nodding. I assume that means you would not disagree with that. I believe thats true. Then there was the Economic Census of 2012, and we learned from that study that there were some 33,000 fewer Business Establishments in the finance and Insurance Industry than there were in 2007. So over that fiveyear period we saw 33,000 business entities that left the market or were consolidated into something else. I think its worth evaluating the potential problems that increasingly concentrated and potentially less competitive Banking Sector might pose. Especially in light of some of the concerns surrounding the too big to fail concern. So let me ask you this, chair yellen. What risks do you see that might come from the concentration of power, the concentration of market share within within the financial industry . What risk do you think that might pose to our overall Financial Stability . So, large, interconnected, complex firms. Its not just a question of size but size is part of it but other characteristics mattered too. Their distress or failure could pose significant risks to Financial Stability, and a great deal of our regulatory and supervisory response since the financial crisis has been directed at those firms that do pose such systemic risks. And we have imposed much higher capital standards, end capital standards for individual firms that reflect our assessment of the individual risks that each of those systemic firms poses to our Financial System. Because of the risks they pose, they need to have a lower probability of distress to be better managed, have more liquidity, to have resolution plans that we need to make sure these entities are resolvable and diminish their risk of failing. And through our stress tests and capital requirements, resolution plans, living wills and other things have improved the safety and soundness especially of those institutions. Lets talk about those efforts for a minute. You mention stress tests in particular. Since the enactment of dodd frank and over the last few years, the fed has undertaken various measures, some of which you referred to, of regulatory enforcement. I wonder whether some of those efforts might undermine the due process interests of those who own the banks, not just the banks themselves, not just the wealthy people who are invested in them but also the many people including retirees who invest in them. A longstanding concern of due process involves certainty in the law. James madison described this in federal of 62, when he said that the people it will be of little avail to the people that the laws may be written by individuals of their own choosing if those laws will so voluminous, complex, and everchanging that they cannot be understand, or if they undergo such incessant changes that no person who knows what the law is today can be sure what it will be tomorrow. My understanding of these stress tests is that standard are constantly changing. And theres kind of a black box, so they dont know who what the law is today and they know even less about what the law will be tomorrow, if by the law we mean the standards enforceable by the fed that carry the force of law will be. How is that consistent with due process, and how can the lack of transparency be consistent with our timehonored standards of due process . So, i would disagree that theres a lack of transparency. While we do not publish the precise mathematical formulas that are used to evaluate bank portfolios, we have published and shared with the industry a great deal of information about the models that we use. A great deal of information about them. But that doesnt mean that they know what the models are. And the models themselves are the basis for legal standards toll which we are subject, are they not . We want these banking organizations to have sound risk management, and that means developing their own compassion ti to evaluate the risks in their portfolios rather than using a model that we hand them. And the gao review of our stress testing did not recommend they looked at this very carefully and they did not recommend that we share with the industry the exact details of the model. We have put out for Public Comment policies about how we design stress test scenarios. The industry understands how we go about devising those scenarios, although they change from time to time, and they have a great deal of information about the models that we use and whats contained in them, but we want to make sure that they have appropriate incentives to analyze their own unique risks of those organizations that may not be captured in our stress test and that they build models that are appropriate for each individual firm. My times expired. Ive got to respect the clock and the chairman and my fellow committee members. I do want to point out the gao did, in fact, recommend updating revising the guidance. I also want to be clear i understand you have a difficult job to do, and i understand these are very important things, but i dont think we can overlook the fact simply because something is important doesnt mean that we can subject the American People to laws that are constantly subject to change, laws that are not even written by individuals of their own choosen, laws written by people who are unelected and therefore unaccount to believe the people. It doesnt mean they have bad intentions. It just means that there can be no due process in that environment, and i think we have to take that into account. We need to be mindful of that and look for ways to reform it. Thank you. Senator casey. Mr. Chairman, thank you very much. I want to thank you, senator coats, for your service and the work you did working with representative maloney and others on this committee. So were grateful for that. And we wish you luck as you transition. Thank you. Madam chair, were grateful to be with you again. Thank you for this testimony. Thank you. When you provide this testimony, we always learn from it. Thank you. And my copy of your remarks is highlighted in yellow the parts that were most interesting to me, and ill quote from them in a moment. But i wanted to focus on maybe one word but unfortunately a vexing problem, and thats wages or lack of wage growth. Weve had i think a basic disconnect lately where with a good recovery corporate profits are healthier thank goodness, but the wage picture over time, not the most recent numbers but over time has been a different story. So we do have a disconnect where folks see corporate profit going up and wall street having good results in the and their own wa growing over time. And i think its problem for both parties to come together and tackle it. I believe we need to focus on shortterm strategies to deal with that as well as kind of a set of longterm priorities that ill just kwlik mention. But weve seen not just in the context of the election but even prior to that but maybe most especially people leading lives of real struggle and a lot of it is connected, of course, i think to the wage issue. Youre familiar with, i think most people are, one of the studies, the Economic Policy institute, which basically said wages grew more than 90 , maybe as high as 91 , for 25 years after world war ii along with an alignment of productivity growth, and then but then after that, roughly around 1973, even with productivity still increasing more than 70 , wages kind of flat lined by one estimate 11 over 40 years. If that data and that analysis is in any way accurate, and i believe it is, were looking at wage growth of 11 over 40 years. What we cant endure is another 20 or 30 or 40 years of that kind of wage growth. So what do woe we do about it . Well, one thing we need to do i think is to focus on ways to help communities when they are dramatically affected by substantial job loss in the short term. Thinking of place like erie county, pennsylvania, the city and county of erie. They have suffered a lot of job losses when ge moved jobs down to texas. Im advocating measures for assistance to communities with that impact that tleeds leeds to a lot of job lotsz. Over time i think we need to focus on more strategic actions, quality affordable child care, a real commitment to early learning, which we dont really have as a nation. Some of the things weve heard a lot about lately, investments in infrastructure, not only the more traditional roads, bridges infrastructure, but also broadband deployment. Pretty hard to grow a business or run a family farm if youre in a Smaller Community that doesnt have access to broadband, especially in Rural America, where the problem is really alarming. Huge percentages of Rural America and rural pennsylvania that dont have broad band. Thats a lot to chew into. But i want your sense of not what you hope we would do but maybe from a Vantage Point of what you think works. Shortterm strategies to raise wages as well as longterm investments that might result in that, if you have any ideas about that or opinions about that. So you pointed to the fact in your comments that the behavior of wages, the disappointing growth in wages is not just a recent phenomenon, its not just something that is associated with Great Recession following the financial crisis, although that took a huge toll. Its a longerterm trend. Many economists feel it reflects both technological change that has persistently favored skilled work er workers and diminished the Job Opportunities of those who do more routine or less skilled work and globalization i think also played a significant role. And even though many economists believe that these forces are good for in some sense for the economy as a whole, there are many individuals who were very badly and very negatively affected by these trends, and i agree with your focus that its important to think about how to help individuals who are not winners because of trends of technology and globalization and how to put in place inclusive policies that will help those individuals and make sure that the gains are broadly shared in our society. I dont have a foolproof method to do this, but you gave a very good list of things that are certainly worth for the congress and administration to consider. Certainly when you see a rising gap between wages of most skilled and less skilled worker and thats occurred since the mid80s, thats in a way a signal saying investing in people, investing in education, investigation Workforce Development training, we see now there are high levels of job openings and yet theres a certain degree of mismatch, of skills with openings, investing to make sure that individuals have the skills they need to fill the jobs that are becoming available. And there is a good deal of research on Early Childhood education that suggests thats important. There are a wealth of investment possibilities that could help to mitigate this trend and other interventi interventions. And i definitely think its appropriate for congress and the administration toll consider a broad range here. I appreciate that. Youve been listening to Federal Reserve chair janet yellen testifying in front of the joint Economic Committee discussing wages. The timing of a rate hike. The outlook for the economy after the election. Regulation. And much more. Lets get to Steve Liesman whos been distilling the mornings message. Steve . Thanks very much. I think its worthwhile to take account of all that janet yell season saying here. She seems to be gently pushing back here against some of the rhetoric of president elect donald trump during the campaign. Shes pushing back against the need for massive fiscal stimulus, warning that it could be inflationary, saying the fed will take that into account when making policy, also saying that the economy doesnt really need it like during the financial crisis. Pushing back against the state of the economy saying it seems to be in reasonable strength here and also against a repealing dodd frank and having very strong words about the need for fed independence saying that the outcome can be terrible or shown to be terrible when Central Banks are subject to political pressure. She never addressed the president elect, never said anything about donald trump, but all of these things were issues raised in the campaign and questions asked by congress, kayla. Thanks, steve. Back to the fed chair on capitol hill. And senator, i just want to say how much a pleasure its been to work with you both on this committee and also on the intelligence committee. Chair yellen, im just going to jump into some questions because actually senator casey went really exactly where i want to go as well. The economys come a long way in the last few years. It is certainly growing. But i think historically weve had this approach of if we can just make the economy growth then, you know, a rising tide lifts all boats. And i at home hear from people and we certainly saw i think the same sentiment in the recent election that some of those boats just havent been keeping up with the rest of us. And that is a fundamental problem with the quality of our economy. So things like wage growth and particularly the seemingly broken link between productivity and wage growth, some of the lack of wage growth you can ascribe to skilled versus unskilled, but weve also seen this very divergent path where historically we are able to keep wages sort of tied to the same trajectory as productivity and weve seen those split apart. Do you have thoughts for why that is and how we can, you know, seek through Vocational Training or other poll sis to relink those things together for a broad swath of america that is simply not feeling the benefits of a growing economy or a rising stock market . So, productivity growth is important over the long haul to real wage growth, and it has been extreme disappointing over last decade. But i also agree with the point that you just made that weve had periods in which real wage growth has not kept up with productivity growth. Thats also true. One way of data tashos that, if you look at the share of the pie, and here by pie i mean our gross domestic product, our output bundle of the economy, its division between rewards to labor and rewards to capital, that share was essentially constant for 100 years and more recently weve seen an increase in the share of the pie going to capital. And thats consistent with real wages not keeping up with productivity. There is some research on that. The United States is not the only country that has seen that happen. I am not certain what the cause of it is, but i would agree with you that that is something thats happened. I think were seeing a little bit of reversal of it now that the labor market is very tight and wages are increasing more rapidly. But even if wages were increasing ain line with productivity, we do have the fact that were seeing rising income inequality. Weve been seeing that for a long time. A loss of middle income jobs in the face of technological change and globalization that was probably accelerated in the aftermath of the financial crisis. So we have people who lost good jobs where they were earning good incomes and even if they can find work, because after all the Unemployment Rate is low and there are a lot of job openings, but often really changed. The nature of the jobs have changed and the incomes so theyre taking large wage hits. And, you know, were seeing the frustration that comes with that. And we just go back to the points i made in response to senator caseys comments. I believe there are lots of things that could be considered thats not in the domain of monetary policy, but m there are structural policies, training, education, and safety net yeah. Okay. Well, you know, you anxioused some questions earlier that were really focused on mortgages and the tightening mortgage requirements. I wanted to sort of cut quickly to the chase there and just ask you fundamentally, do you think we all agree that thins were not we werent getting the balance right when the mortgage crisis occurred. Certainly weve seen stricter requirements and in large part some benefits from that. Have we gotten that right . If we gotten the balance right coming out of the mortgage crisis of 2007 . So thats a hard question and i dont think i can give you a short answer. Simple answer to that. I think its appropriate that standards are tighter, but i think there are some groups for a variety of reasons that maybe having a duly difficult time in the aftermath. Thank you, chair. Thank you. And senator cassidy. And i also thank you for your service to our country in a variety of way, as an ambassador, as this, as many other things. So thank you. Madam chair, thank you for being here. Thank you for all you do. Thank you. Thank you. Im aware your knowledge on this greatly exceeds mine. I ask for trepidation but i ask for sincerity. I had a conversation with Alan Greenspan a couple months ago. I said this is the first time in eight years weve not had gdp growth over 3 , is this the new norm . He said it might be. That longterm Capital Investment continues to decline. Now, i have a graph, im sorry, i wish i could blow it up, but you think in numbers so its probably clear to you. It look like since 2011 the year over year growth in Capital Expenditures by fortune 500 companies has declined pretty significantly. And it occasionally levels, but then it begins to decline again. On the other hand, every time theres a qe there is a spike in buybacks. So there are those who say the easy money has made it easier for big corporations to arbitrage as opposed to make money by longterm Capital Investment. Going back to my conversation with former chair greenspan, he said that if you go to a board of directors and you say we need a 30year spending plan for Capital Investments, theyre going to say wheres the certain certainty . On the other hand, if you say we can invest in whatever types of credit markets or the bond market, we can have a return, they will. So your comments has perversely the qe hurt longterm Capital Investment . Thats what i am told is key kooe to productivity growth and rising wages and rising gdp. So there are a number of factors that have been depressing gdp growth. A number of my colleagues now estimate that longterm growth rate is likely to settle under 2 without so changing policy. We have more slowly growing labor force and Educational Attainment of the workforce which had been increeing at a more rapid rate is now leveling off and so there is less contribution there. I agree with you the Capital Investment has been weak and thats one reason productivity growth has been as dpriszed as it is, even side of investment, in technology that come from other sources, also seemed to have diminished. Now its not clear to my mind why it is that investment spending has been as weak as it is. Initially, we had an economy with a lot of excess capacity. Firms were clearly operating without enough sales to justify a need to invest in additional capacity. And more recently with the economy moving toward full employment you would expect to see investment spending picked up and its not obvious exactly why it hasnt picked up. Elsewhere on capitol hill we are monitoring the Weekly Press Conference of House Speaker paul ryan. Lets listen in to that. He was a very integral part of the campaign. Hes obviously a brilliant young man who donald trump trusts. Ill leave it up to the Trump Transition Team what role he plays. But he played a very Important Role in this campaign and i think that should be respected. I dont have a deep understanding of how they work. [ inaudible question [ inaudible question ] work for the Trump Administration, time line, health care, immigration, so on and so forth. Are you concerned theres going to be these two countervailing forces where the public is going to say, wait a minute, why havent you passed that is all stuff in january, and you want to do it right, so its also going to take some time to get those plans together regardless of the groundwork you can lay now even in early january, how do you balance those two things . Some of your members in your conference will demand that. Well have plenty of time to talk about the schedule and the calendar. We move fairly quickly in the house but the senate is another story. They dont move as quickly as the house does. But we will deliver on this agenda. Yes, of course, that takes time because that is how the legislate sure works. I think well be making sure that people understand just how the calendar works, just how the progress of legislation works because we intend on delivering. And were going to make sure this is the most Productive Congress weve seen in a long, long time. And im confident that as people understand the way the legislative process works they will see that we are going to be hitting the ground running and moving to fix these problems for the American People as they have given us this unified government and trust to do. Just following up on, that when you say hit the ground running, what are the specific legislation that youll be pushing in the first 100 days . Well have plenty of time to talk about that later. We are just in the beginning of the transition period, so we are just now working with the Incoming Administration on planning that transition. Seitz a little premature to get into what day what bill is coming up for vote other than to say thats the kind of conversations were having right now, making sure we plan not just here in the house but with our friends over in the senate and with the new Incoming Administration that is just a couple weeks into this transition. So well have plenty of time to talk about all that stuff. Both sides, the president elect and you all have talked about tax cuts, repealing and replacing obamacare. All those things will have plenty of time to talk about later on as to when they come up. This is what our transition is about. None of these decisions have been made yet. Were just in the beginning of this. When we have made decisions about the timing of legislation youll be the first to know. Mr. Speaker, one of the things that donald dont blurt out. One of the things donald trump has talked about is the socalled drain the swamp age a agenda. One of those things is to impose term limits on members of congress. What is your view on that . Ive always supported term limits. Ive long been a fan. I dont know where all the other members stand does but ive always been in favor of that. What about legislation on that . Ill leave it up to others for that. Ive been in favor of term limits since before i came here. What are the advantages of adjusting the cr through march . Why is trump asking you to do that instead of funding the government through next september . I think the new incoming government would like to have a sayso on how spending is to be allocated in 2017. We are working with the new incumbent government, the new Trump Administration on the t e timing on that, the continuing resolution. I think they would like a sayso on how money is spent the rest of this fiscal year. Do they want more it was spending . I cant answer that. Theyve asked us to work with them on the continuing resolution as weve described. Well do just that because i think weve got a lot of priorities we would like the see change relative to the obama funding priorities. Its that simple. How would your desire as you spoke about a unified republican government and the desire to go big be helped by a possible return of ear mashes . Well, heres what our members are concerned about. Our members are worried that we have seen the dilution of the separation of powers. Our members are worried that the executive branch on elected bureaucrats have been given far too much power and weve seen violence done to the separation of powers. Restoring the power of the purse truly to the legislative branch so that elected officials can hold the unelected branch of government more accountable is the genesis of that concern. We decided yesterday that were going to spend a good amount of time deliberating how best to do that. So were going to be spending the First Quarter of 2017 figuring out just how we can make sure we can restore the power of the purse to the legislative branch to hold the unelected branch of government accountable. So its likely to have a return in some form. Well have debate about how to do our job as holding the executive branch oversight. Heres a concern. The one that many members talk about is the army corps of engineers. The army corps of engineers is run by unelected people that do not necessarily reflect the will and the sentiment of the elected branch of government. So we want to make sure that in this opportunity we have with unified republican government were restoring the constitution, were restoring the separation of powers, were restoring accountability to the federal government. When we say drain the swamp, that means stop giving that is all power to unelected people to micromanage our society, our economy, and our lives and restore the constitution. Thats what this debate is about. Mr. Speaker, can you sort of just lay out your big picture thinking on fiscal implications of the trump House Republican agenda . How do you secure the border, increase defense spending, increase Infrastructure Spending and do tax reform in a fiscally responsible manner without increasing the deficit . A couple things. You need to hold down spending in the critical areas where its growing so fast and you need to grow the economy. Lets not forget that we have been in a slowgrowth economy for far, far too long. Were just limping along, i would argue, not even close to our potential. So what we want to do coming out of the gates is get this economy growing. Releasing the regulatory choke hold that is on the u. S. Economy is one of the first things we can do to help get this economy growing. Comprehensive tax reform is one of things we can do to get this economy growing. Faster Economic Growth means more gdp, more wages, more jobs, more revenue. But we also had to deal with the drivers of our debt. Dont forget that obamacare rewrote free entitlement programs, the three entitlement programs that are the primary drivers of our debt. When we replace obamacare, a law that is collapsing under its own weight this is a law where people are getting hit consistently year after year with doubledigit premium increases. This is a law that is rising the dedoubleable so high that families dont even feel like they have Health Insurance because their deductibles are so high. This is a law where according to kiz fer im not mistaken, 31 of the counties in america have one choice of a plan. Thats not a choice. Thats a monopoly. So this law is failing. Forget the fact that this law rewrote medicaid and medicare. This law has done great damage to medicare. I could go on and on. Weve got to replace this law with one that works for the American People weather one that gives people more choices, as more competition, that has a patient centered system so we can lower prices and get Better Health care value for our dollar. You do that, you fix the health care problem, you are dramatically fixing the Fiscal Health of this country. Those are among the things we have to do if were going to truly nurse ourselves back to Fiscal Health and better management. Economic growth and fix and replace this broken obamacare law. Would you look at premium support for medicare or well get into all this stuff down the road when were doing our replacement plan. It took three years to get to the passage of the Affordable Care act to the implementation of the exchanges. How early can these people who are seeing premium spikes a great question, one well be dealing with all year long. Its too early to have the to know the answer to how fast can obamacare relief occur. What were focused on is how we get obamacare repealed and what we replace it with so we can get that relief to the American Families as fast as possible. Thats something well be discussing all along. Thats one of the big topics of our transition. Last question. Hi. Thank you very much. President elect trump promised to defund planned parenthood as long as they continue to perform abortions. Will the Republican House pass legislation that prohibits funds going to any planned parenthood affiliate until planned parenthood stops we put a bill on president obamas desk in reconciliation. Our position has not changed. House Speaker Paul Ryan just wrapping his Weekly Briefing with members of the press. That has been taking place concurrently with fed chair janet yellen wrapping up her testimony on capitol hill. Mike, weve been watching the reaction of the markets, which has been muted at best, but speaker ryan talked about his support for term limits. The pivotal role that steve bannon, now the president elect chief strategist, played in the campaign. The prioritization of earmarks and the need to release what he called the regulatory choke hold on the economy to restore it to growth. Pretty deferential to president elect trump in terms of his staffing changes and also his ideas on term limits, which is perhaps interesting for, you know, a congressman whos been there quite a while. But, yes, the comments about not just earmarks but releasing the regulatory burden, that was really in response to the question of arent you going to be concerned about the widening out of deficits with tax cuts and stimulus coming on. Arent you supposed to be a deficit hawk. He goes back on the, were just going to grow the economy, make it up on volume is the old story. That was a very interesting question in the sense he does not himself anticipate putting forward a lot of specific objections to a broadening out of the debt in the short term. Were already seeing this very delicate, intricate dance that it looks like this unified republican government is going to have to do on term limits, House Speaker paul ryan said hes personally a fan of term limits, always has been, but hes not sure how his other fellow congressmen feel about it. No specifics on the timing of the congressional ageneral dashgs knowing that people are going to be expecting them to move very quickly because of the majorities they have. Also its interesting, talking about restoring the power of the purse to the legislative branch. Trying to drain the swamp, this term as being about bureaucrats, not being about elected officials who have been in washington a long time, not doing much of anything. Im pretty sure when people were saying drain the swamp they werent just talking about the people who are career workers in washington, d. C. Theys how theyre trying to reframe it. We seal how the elect cat is going to respond. And reframing the time frame for congress as well. He said he would spend the First Quarter of 2017 focusing on that priority monopoly declining to say exactly what would be possible from a legislative perspective in the first 100 days because a lot of the regulations that they are talking about and tax reform, its not just writing new legislation and write nug policy. Its take eight way what was there before. He didnt talk about repealing obamacare. Hes now talking about obamacare relief and how fast relief can occur. Relief and also sort of attacking its effects on the big, you know, sort of social safety net programs, medicare, medicaid. I mean, big jobs, no surprise he didnt give a timetable. By the way, on the drain the swamp question, fascinating to see him invoke the army corps of engineers as kind of a runaway bureaucracy. Its not about them coming in to drain the swamp, its about impediments that had their own agendas on the environmental front. It is a busy day on the political calendar. You not only had speaker ryan just speaking of the transition ongoing of the trump campaign, you have the president , president obama traveling in germany meeting with Angela Merkel over there, and we will get to his comments when that q a begins. But janet yellen, the fed chair, did wrap up on capitol hill. Wasnt to go to Steve Liesman monitoring the end of those comments to tie that up for us. Steve. Yeah, kayla, a rare early end to a testimony of the fed chair. Fed chair saying definitively she was appointed to a fouryear term and laid aside any concerns she may resign early, saying she fully intend to serve out that fouryear term. She went on to sort of maybe a broadside before the trump campaign, given some of the rhett fricke that campaign, saying that it was critically important that the Federal Reserve remain independent and that there are there were terrible evidence of terrible economic outcomes in the event that there was political pressure on a central bank. She went on to say essentially that warned about inflationary impacts of fiscal stimulus if it foes too far, saying the economy doesnt need massive fiscal stimulus the way it did during the financial crisis. She suggested that the new president and Congress Take account of the 77 debt to gdp ratio. She said they do fiscal stimulus, they should focus it on raising the nations productivity. She went on as well, kay lashgs to defend dodd frank, the new Regulatory Reform law that was heavily criticized by president elect donald trump during the campaign, saying she would not like to see the clock turn back. So we have a situation here where on several critical Economic Issues you have a fed chair and a president elect at least given his rhetoric during the campaign who are at odds on some pretty important issues here. Steve, when she was asked and responded about the markets reaction to president elect trump and some of the proposals on the economic front that hes been discussing, she described a fiscal package as potentially not expansionary but acknowledged that a strengthening dollar or any further inflation pressure might actually put the fed in a difficult position. What did you make of that . Well, something weve been talking about for well over week now, and the market has picked up on this. By the way, there was a very slight bid caught by the twoyear note. We hit 123 for a moment there. I dont know if were still quite there. Steve, i have to interrupt. We want to take steve, we have. We want to take to you berlin where the president and german chancellor Angela Merkel are being asked about trump. How would you advise European Countries to deal with the same threat and, lastly, if i may, would you like to see your friend Angela Merkel run for reelection next year . Pull out your german. Showing off. Translator has the american president calmed you in the sense that on the policy of his successor on Climate Change and russia has allayed your fears and are you concerned the common european policy towards russia will collapse . And after the election of mr. Trump would you as a sign of civility wouldnt you have to declare you are going to be a candidate again . Well, i try to make it a rule not to meddle in other peoples politics. All i can say is that chancellor merkel has been an outstanding partner and chancellor merkel is perhaps the only leader left among our closest allies that was there when i arrived. So in some ways we are now the veterans of many challenges over the last eight years. And although we have not always been in sync on every issue in terms of our core values, in terms of her integrity, truthfulness, thoughtfulness, doing her homework, knowing her facts, her commitment to looking out for the interests of the german people first but recognizing that part of good leadership on behalf of the nation requires engaging the world as a whole and participatinging effectively in multilateral institutions, i think shes been outstanding. So its up to her whether she wants to stand again and it will be up to the german people to decide what the future holds. If i were here and i were german and i had a vote, i might support them. But i dont know whether that hurts or helps. With respect to srussia, my principle approach to russia has been constant since i first came into office. Russia is an important country. It is a military superpower. It has influence in the region, and it has influence around the world. And in order for us to solve problems around the world it is in our interest to work with russia and obtain their cooperation. We should hope for a russia that is successful, where its people are employed and the economy is growing and they are having good relationships with their neighbors. So i sought a constructive relationship but what i have been is realistic in recognizing that there are some significant differences in how russia views the world and how we view the world. Democracy and free speech and International Norms and rule of law, respecting the ability of other countries to determine their own destiny and preserve their sovereignty and territorial integrity, those things are not something that we can set aside. And so on issues like ukraine, on issues like syria, weve had very significant differences. And my hope is the president elect coming in takes a similarly constructive approach, finding areas where we can cooperate with srussia, whee our values align but stands up where we deviate from International Norms. I dont expect he will exactly follow but my hope is he does not take a real politic approach and suggest that if we leave smaller countries vulnerable or creates long term problems we do whatever is convenient at the time. And that will be something that well learn more about as the president elect puts his team together. I am encouraged by the president elects insistence that nato is a commitment to that does not change and his full commitment to nato for International Security is very important. In terms of my conversation with president putin, these are conversations that took place before the election. There has been clear proof they have engaged in cyber attacks. This is not unique to russia. Weve seen industrial espionage and other behavior we think should be out of bounds. And i delivered a clear and forceful message that although we recognize russias intelligence gathering will take place even if we dont like it, theres a difference with that and going after private organizations or commercial entities. We will respond appropriately. If and when we see this happening. I do think this whole area of cyber at an International Level we have to work on and develop norms so we dont see a cyber arms race. A lot of countries have advanced capabilities and our economies to digital platforms making sure that this doesnt become a lawless battlefield and weve started some principles that were adopted in the g20, the g7, and at the u. N. Levels. Translator allow me to underline im very much impressed that in spite of the very tough Election Campaign the transition period in the you states of america because it follows principles working smoothly because this is all about the American People, the destiny of the American People, the Outgoing Administration is sharing its expertise and this, to us, is a sign of encouragement to continue the good cooperation and that is in our mutual interest. I will continue this with i approach this with an open mind and will do it with deep conviction with president elect donald trump. Secondly on russia i can only repeat, im saying this from a european Vantage Point, from german points, that we live in peace