Transcripts For CSPAN3 Confirmation Hearing For Federal Reserve Vice Chair Nominee 20240708

Senate committee on banking, housing and urban affairs will come to order. Today is a hybrid format. Our witnesses are in this person but members have the option to appear in person or virtually to consider the nominations of dr. Lael brainard to be vice chair of the board of governors of the Federal Reserve system. And acting director Sandra Thompson to be director of the federal Housing Finance agency. Its amazing what a difference a year makes. We have today safe and effective vaccines that are saving lives, that are getting people back to work. 207 million americans have fully vaccinated. In 2021 we added 6. 4 million new jobs, more in any year since 1939. Workers are demanding raises. Theyre finally getting them. Theyre changing jobs at record rates because people finally have some options. The past year has illustrated our economy works best when it works for everyone, not just wall street, not just the top 1 . Everyone. Whether you punch a clock or raise children or care for an aging parent, no matter who you are, where you live, what kind of work you do, Economic Growth wont mean much if it doesnt reach all workers. Families in stubenville, scranton and communities of all sizes. The president has nominated dr. Brainard and acting director thompson to Important Roles to put workers at the center of our government and our economy to deliver results that actually improve their lives. Dr. Brainard is a leading economist who understands a Strong Economy is one where workers have power. Shes committed to a worker centered Monetary Policy that boosts employment and lifts wages, something that every member of the feds Rate Setting Committee has reaffirmed. Shes led the way in modernizing and strengthening the Community Reinvestment act, something that senator warner has been particularly interested in. A landmark civil rights law passed to begin to undo the shameful legacy of red lining and lending discrimination and spur investment in all neighborhoods and communities. Shes working to ensure banks meet the needs of all of our communities. During the pandemic she worked shoulder to shoulder with chair powell to steer our country out of the abyss. Dr. Brainard has a distinguished record. She joined the fed in 2014. From 2009 to 2013 she was in the department of treasury. She worked in the first bush administratio as a staff economist for the council of economic advisors and the clinton administration. As vice chair shell be tasked with supporting efforts to empower workers and refocus our economy on main street and make sure all americans have good jobs with growing paychecks and affordable cost of living. That also means supporting efforts to close the racial wealth and income gaps. The average black or latino household earn about half as much as the average white house hold and own only about 15 to 20 as much net wealth. As one of our colleagues once said, when we all do better, we all do better. With govern brainard as vice chair of the fed, america will have someone who understands that workers, not corporations, not wall street, but workers create Economic Growth. Acting director thompson has taken meaningful steps to put renters, homeowners and families first. Over the past six months acting director thompson has directed the gses to strengthen their plans to support housing. Shes expanded opportunities for middle class and low income homeowners to save money on their mortgages through refinancing and shes increased the focus on fair housing at the gse. I can think of no person who is qualified to strengthen the financial standing of the gse. Advocates have written to this Committee Supporting her. Before being designated as acting director in 2021, she served for eight years as the Deputy Director for the division of mission and goals. To ensure the safety of fannie mae and freddie mack. She spent 18 years at the fdic where she worked for seven different chairpersons from each of the Political Parties and in senior level positions including director of supervision and Consumer Protection and the director of the division of Risk Management and supervision helping to stabilize our nation nations in a nutshell you can see how qualified she is. Shell be in a position to tackle some of the most pressing issues facing homeowners and renters to ensure the stability of our Housing Finance system whether youre looking to rent or buy, housing has become too expensive and too hard to find long before the pandemic began. More than 50 years after the passage of the physical therapy Fair Housing Act people of color are far more likely to be denied a mortgage, own their own home. In just the past week tragic fires in the Ranking Members home state and the bronx have reminded us how far we need to go to ensure everyone has safe affordable places to live. Acting director thompson has distinguished herself as the person we need to lead this critical work. These nominees, each of them understands the challenges our economy faces, they understand the people who make our economy work, like so many of the president s nominees. As we recover from a pandemic that laid bare just how hard women especially work at paid jobs in the labor market and unpaid jobs in their families. I want to thank both nominees for their exceptional and lengthy years of commitment to Public Service. Ranking member toomey. Welcome. You both have very extensive experience in your fields. Governor brainard has been nominated to serve as fed vice chair. The fed has been granted significant independence to isolate it from political influence. However, congress has given the fed narrowly defined monitory and regulatory missions. The fed had been tasked to promote stable prices and maximum employment. But the feds recent actions have failed to maintain price stability. Last year governor brainard repeatedly insisted that inflation was transitory. Weve now had nine consecutive months where inflation has been more than two times the feds target. Cpi release of 7 , the highest in 40 years, confirms that further. Inflation is a tax thats eroding americans paychecks every day. Even though wages are growing, inflation is growing faster. Thats causing workers to fall further and further behind. The fed needs to learn from its mistakes. I think that begins with the feds new Monetary Policy framework of which governor brainard was an author and outspoken advocate. The framework supported the price stability mandate to try and maximize employment by allowing inflation to run high. The fed looked beyond employment as a whole to consider whether employment was, quote, broad based and inclusive, end quote. As the fed would sacrifice stable prices to see if it could achieve higher and use Monetary Policy to narrow [indiscernible] the fed decides which subgroups of people should have faster job growth than others. One of the problems is Monetary Policy can never equalize employment rates among different groups. The fed would run the risk of failing on both ends of its mandate because you need stable prices to achieve a Strong Economy and maximum employment. Given this fact, the fed should reevaluate this new framework. The fed has the mission of monitoring safety and soundness of certain major Financial Institutions. Under chairman powell the fed enacted modest, sensible reforms that reduced Regulatory Burdens and helped spur Economic Growth. Governor brainard was the sole dissenter over 20 times on regulatory matters. She argued that the feds reforms of capital liquidity and stress tests for Smaller Banks would weaken the safeguard at the core of the system. Yet the economy nearly collapsed at the start of the pandemic, the Banking System emerged exceptionally well and served as a source of strength for the economy, demonstrating the sensibility of these reforms. In addition to opposing those reforms, governor brainard has urged the fed to take an activist role on Global Warming which is beyond the feds expertise and mission. According to the New York Times shes endorsed the use of supervisory guidance the feds recommendation to banks to ask Financial Institutions to curb their exposures. Im concerned shes advocated for the fed to shape environmental policy through socalled climate Scenario Analysis. Not only does the fed lack expertise in environmental matters, theres no reason to believe that Global Warming poses a risk to the system. We havent found a single bank thats failed in the modern era due to a Severe Weather event. There is a transition risk associated with Global Warming but thats political and regulatory in nature. Its the risk that unelected bureaucrats will attempt to impair the value of assets by cutting off credit to the energy sector. This isnt about whether Climate Change is a threat to society. These are inherently political decisions, which is why they belong firmly in the domain of officials who are elected and directly accountable to voters. Turning to ms. Thompson, shes been nominated to serve as the director of the fhfa. Shes had a busy six months as acting director. Shes proposed Capital Requirements for fannie mae and freddie mack, suspended the gses acquisition of high risk loans. And increased gses Affordable Housing goals. She has not prioritized ending the gses conservatorships. Im concerned shes seeking to use fhfa and gse to take on more risk for taxpayers. That makes her nomination a referendum on the administrations radical housing policy. This policy contemplates more mortgages for higher risk borrowers, repurposing the gses as instrumentality of social policy. This administration is using the power of the gses conservatorship to command and control a huge swath of the economy. Were now asked to take ownership of the bailouts and foreclosures that im afraid are likely to follow, especially given where we might be in the housing cycle we should be reluctant to do so. Mr. Chairman, i look forward to hearing from todays nominees. Would the witnesses please rise and raise your right hands . Do you swear or affirm that the testimony youre about to give is the truth, the whole truth and nothing but the truth, so help you god . Do you agree to appear appear before a committee of the United States senate . Please be seated. Thank you. Governor brainard and acting director thompson, welcome to the committee. If you would like to introduce family members or friends in your testimony, i invite you to do that at the beginning or wherever you want to. Governor brainard, please begin. Is this working . Yes. Chairman brown, Ranking Member toomey, other members of the committee, thank you for this opportunity to appear before you. Im greatly honored to be nominated by President Biden to serve as vice chair of the board of governors of the Federal Reserve. Im delighted to be here alongside acting director thompson. If confirmed, i look forward to continuing to work with members of this committee. Were seeing the strongest rebound in growth and decline of unemployment of any recovery in the last five decades. Over the past year, unemployment has fallen by 2. 8 and growth is estimated to be around 5. 5 according to a variety of private forecasts. But inflation is too high and working people around the country are concerned about how far their paychecks will go. Our Monetary Policy is focused on getting inflation back down to 2 while sustaining a recovery that includes everyone. This is our most important task. When the pandemic struck in 2020, i worked closely alongside chair powell, secretary mnuchin and many others with the support of congress to calm Financial Market turmoil and save american jobs and businesses. When markets stabilized, i worked to responsibly wind down the emergency facilities that were established. Today the economy is making welcome progress. But the pandemic continues to pose challenges. Our priority is to protect the gains weve made and support the recovery. Since 2014, ive supported Monetary Policy that was responsive to Economic Conditions as they evolve. Our approach helped sustain the longest recovery on record with low inflation and millions of jobs. Ive worked to grow and safeguard our economy under administrations of five president s. Ive worked every major financial crisis over three decades. In country im committed to pursuing the goals of price stability and maximum employment and to maintaining the strength and resilience of our Financial Markets. Im committed to the independent and nonpartisan status of the Federal Reserve. If confirmed, i look forward to supporting chair powell in carrying out the responsibilities assigned to the Federal Reserve and in fostering Transparent Communication and accountability to you and to the American People more broadly. I will bring a considered and independent voice to our deliberations drawing on insight from working people, businesses, Financial Institutions and communities large and small around the country. Before closing, i want to thank my husband curt my daughters kaylin, kira and chloe for their steadfast support of my work and i would like to commend the outstanding efforts of the many individuals across the Federal Reserve system who work so hard every day to serve the american public. Senators, i thank you for your consideration and i look forward to answering your questions. Thank you. Thank you, dr. Brainard, acting director thompson. Chairman brown, Ranking Member toomey and members of the committee, i first want to thank President Biden for nominating me to serve as the director of the federal Housing Finance agency. It is the greatest honor of my career to appear before you today. Thank you to the senators and the Staff Members with whom ive met in advance of this hearing. If im fortunate enough to be confirmed, i look forward to working with all of you on the important issues at fhsa. I would like to introduce my sons jared and aaron, who are here with me today. Id like to recognize and thank my parents, herman and helen. Due to covid, they are not able to be here in person. The fact that my parents are still alive to witness todays hearing is very meaningful to me. I was born and raised on the south side of chicago to my extraordinary parents who came to chicago from mississippi as part of the great migration. My parents and family along with the Chicago Public School System and my beloved Howard University right here in washington taught me hard work, dedication, determination and perseverance. I would specifically like to recognize the schools in chicago that helped me my nomination for director of the this great privilege, i realize its rare for a career Public Servant to have the opportunity to lead a federal agency and as the first African American woman nominated for this position i appreciate the opportunity to demonstrate by expertise good judgment and leadership in this position i am proud of the work weve done at fhfa to our supervision of fannie mae, freddie mac and the Federal Home Loan Bank system. Throughout my career mike spirits in mortgage markets, and multiple agencies, ive seen what it takes to lead a federal agency and be effective in that role. In my work at fdic and fhfa ive demonstrated leadership, management and an understanding of the markets and industry. A fair balanced perspective, and the importance of the safety and soundness of americas Financial Institutions. During my time in regulation, ive witnessed and worked in several financial crises. These crises expose the truth in finance. As i head throughout the 2008 financial crisis, i witnessed firsthand the consequences of irresponsible lending. With hundreds of banks across the country when they were closed, a Record Number of homes went into foreclosure. I saw how the borrowers who received unsustainable and predatory loan products were devastated and the downturn and underserved and disadvantaged communities were hit especially hard. In fact, today the black white Home Ownership gap is wider than it was in the 1960s when lending discrimination was based or that was based on race was still legal. As a financial regulator, ive long believe that safety and soundness, an access to credit are not mutually exclusive. The fear of disability, they Work Together as pillars of the financial. Access to credit requires sustainable lending standards. Fhfa will continue to promote sustainable and equitable access to credit and in a safe and sound manner. On the mission that Congress Gave to the housing gses under our supervision, providing liquidity across the nation and especially supporting underserved markets like rural and tribal areas. Manufactured housing and preserving Affordable Housing. If confirmed it would be an honor for me to serve as the fhfa director and i will continue be to be fair, balanced and transparent. Thank you for the opportunity to testify before you today, and im happy to answer any of your questions. Thank you acting director i appreciate it well have you came in under your five minutes, and rarely do people do that then our witnesses, and i ask you to continue to be brief. I have two questions for you. Governor brainard i will start with you, thank you for your work during the pandemic, it took extraordinary action to support the economy. Some of our colleagues forgot and perhaps a forgotten what a critical state urine when the pandemic first hit. So why were those actions necessary and did you support all of them . The yes thank you for asking the question. I worked day in and day out alongside secretary mnuchin at treasury, chair powell, and other colleagues to stand up the necessary facilities to calm Financial Markets as you know dont recall our Financial Markets were in turmoil as they absorbed the news of the pandemic. A lot of workplaces had to shut down because of the risk of infection before vaccines were available. And millions of americans overnight, were placed on lay off the. And we really wrist losing Small Businesses around the country. We risk losing medium sized businesses, and the tens of millions of americans that those businesses employed. So i think due to the very important actions that congress took. We work closely with treasury to make sure that there was financing available for small banks, and cdfis, and empty eyes to get loans to Small Businesses, and to communities around the country. We make sure that mainstream financing is available, we make sure to make sure that Financial Market turmoil was calmed, and we provided a lot of support to the economy and here we are, two years later and we have regained all of that massive loss of gdp. We have businesses that are thriving around the country, people are back to work. So i was proud to work on that alongside all of my colleagues. I did not disagree with any of the actions that we took. In fact i strongly supported them and work hard to make them work. Thank you thank you governor. The acting director you know better than almost anyone how critical it is that Financial Institutions have appropriate capital to be transparent about the risk. What have you done so far and what more needs to be done to make sure that the the smith rounds smith smith gses have the capital they need to continue proving providing access to housing in good and bad times. The one of the things weve take undertaken is to continue with the fannie mae and freddie mac which are the long largest holders of credit risk in the world i dare say. One of the things we like to do is facilitate moving that credit risk off the backs of the taxpayers and into the hands of the private sector. We believe that some of the changes that weve made to the capital rule will help facilitate the credit Risk Transfer program and move credit risk away from the taxpayers and into the hands of private investors. Thank you acting director, dr. Brainard second question for you. For the first time in decades workers are starting to see a bit more power in the economy. We need to continue that progress to catch up to all the costs have been rising for decades. You are closely with chair powell, and if you are both confirmed and oversee this, how does the feds monitoring policy allow us to ensure we have stable crisis and economy were all workers have a good job and reap the benefit of Economic Growth. We put stable prices, and maximum employment on equal footing. And i think we are taking actions in the Monetary Policy front that i have confidence will be bringing inflation down while continuing to allow the labor market to return to full strength. The thats overtime, so we will achieve that maximum sustainable employment will we bring inflation down to 2 . Thank you governor brainard, and last question to acting director thompson. The gses have reported about 4 of their new mortgages over the past two years view the fewer than 11 for refinanced loans shares even lower compared to f h a, recently reported 70 of 17 of loans went to black borrowers at more than 25 to latina borrowers what should the gses do to take to make sure sorry that they are serving borrowers or color equally. The thank you senator. One of the things weve done weve asked enterprises to come up with some equitable housing plants, and they are supposed to focus on and identify barriers that underserved communities and particular communities of color have as it relates to getting a mortgage. They are supposed to identify barriers, and come up with specific plans to execute the requirements that they developed. We also have a focus as you all know on all underserved communities. Whether its rural or tribal. In other areas around the country. But we think that these housing equitable plans will go a long way to help minority Home Ownership and underserved divinities across the country and let them have access to mortgage credit. Thank you acting director. Thank you mister chairman, thank you again for your continued willingness to continue in Public Service. I know is not always easy. I was encouraged to hear you say that you are committed to the independent and nonpartisan status of the Federal Reserve. It is very important that fed decisions on monetary and regulatory policy are entirely free from political interference. So i think this is a simple yes or no question. Will you commit to considering yourself independent from the white house, regardless of which party occupies it . The brainard yes. And will you commit to make your decisions without regard to political or electoral consequences. Yes. I think you have acknowledged the importance of the independence of the fed, how crucial that is for maintaining the trust of the American People. In light of that, i wonder if you could tell me how you view the coup by three men including one who is serving on a term that expire three years ago that forced out a well respected regulator from the once independent fdic. I cannot speak to the fbi c. I can tell you ive enjoyed working with yellow, and i continue working with chair mike williams, on issues such as Community Reinvestment act. We have a very Different Institution and it is a very collegial institution, it is nonpartisan and i can tell you a bit about how i work in that institution. Just to give you a sense. Well i have limited time here so i know you commented on the Jelena Mcwilliams and i appreciate that. And i know you have a good working relationship with her. But i would ask that you reflect on what happened there. You know it is a multi Member Agency and it has prided itself on operating free from political interference and following norms of governance for many years. And that used to describe the fbi cnn fortunately it doesnt anymore and there are people on the left and in this administration who want the fed to become more political. To become advocates for the causes and agenda that they support. And i have worn, and im concerned that the feds dalliance with those issues, totally irrelevant to the dual mandate will undermine the feds the credibility and threaten its independence. And let me move on to climate risk, because the feds have consistently said there are two categories of climate related categories. The actual data shows that physical risk, like Severe Weather events do not affect Financial Stability. They said the physical risks, that doesnt seem likely in the near term. Well thats obvious and theres a recent report from the new york fed that backs up. Weather disasters from the last quarter centuries, had insignificant or small effects on u. S. Banks performance. So do you acknowledge that the likelihood, of weather events leading to Systemic Risk during your term as fed governor, is zero based on Historical Data . The so to be honest, i think its very important for us to understand potential implications of tail risks. Tail risks are risks that have very very low probability of happening, but have extreme damage. And of course i would have expected us to have to study pandemics five years ago either. Yeah a lot of our policy making over the last two years has been really under the cloud of a very complicated set of Economic Conditions and Financial Risks associated with a natural event. So its our job just to be very attentive to potential risks to the Financial Sector. So here here is my concern, and im certainly not alone in this. The other risk, the actual evidence shows that there is no real physical risk. The transition risk though is real, and chairman powell explain the source of that. Its really government policy beignets so this is what is concerning. There are lots of risks out there there could be a trade war with china there could be geopolitical turmoil coming from a russian invasion of ukraine. We could have the government engage in shutdowns again and in response to a pandemic for instance. And actually i would argue that each of those poses a greater risk to the Financial System then some sort of climate event which has never resulted in the failure of a major bank. But you havent advocated during stress protests and the only other risk that you have advocated, is stress tests for the more or less likely risk. Which is the climate one. And the concern that many of us have, is this whole construct unique to climate risk, even though it is really not a threat, certainly in the foreseeable future to the Financial System. It is all about a precursor for using the Regulatory Power of the fed to direct capital away from politically disfavored industry. So the sarah is by some accounts, might be President Bidens next nominee to be the vice chair for supervision, now she has been explicit on this point and she is argued in regards to the implementation of the cares act, that the fed should not be money to further entrenched the Carbon Economy explicitly. So she has been just denying it to this disfavored sector. So do you agree that miss raskin should play that role . Let me respond to your question senator, thank you for asking, i have not suggested that we should do stress tests for climate. Stress tests are very specific. They are related to the Capital Planning of large Financial Institutions but we do actually include the shell Economic Risks in those stress tests. So we have included things like brexit that in our stress tests. But i have not stated that we should do climate stress tests. In terms of supervisory guidance, what we tend to do is ask large institutions, in particular, do you have a good Risk Management framework for assessing all of your material risks. We would not tell banks, which sectors to lend to or which sectors to not land to. But we do want to make sure that they are measuring, monitoring and managing their material risks in many large Financial Institutions. So to be clear you disagree with miss raskin on this point. I honestly have not studied her position, and i would simply say i can speak to what we do in our supervisory guidance and you know, its pretty me and potatoes. It is very well known to the large institutions and not that, really not that different from what theyre doing today. But one thing i would also like to clarify, is that i dont think its appropriate for small institutions. I think small institutions dont have it on how this big a footprint. They dont decide what their risks are, but im more focused on the large institutions. Who themselves come into tell us they would like to have more consistent expectations in this area across jurisdictions. The thank you senator toomey. Senator menendez. Governor braynard, let me thank you for your leadership piece in the middle of 2020, when the Trump Administration was ramming a flawed rule through the occ, civil rights advocates, banks and other affected parties look to you as a serious voice in the room. And if confirmed i have no doubt that you will continue in that spirit as we approach dr. Kings birthday commemoration this coming week. I think about this as one of the essential elements of a move towards a more just society. So let me first ask, during last few years as you are engaging in that work, what did you hear from minority organizations on already led organizations, to further incentivize investments in minority communities, who were disproportionately impacted during the pandemic. Thank you for your question, and i was very pleased that the board unanimously put out a plea list of rulemaking, and that provides a Good Foundation for Community Groups and banks. For what could be good modernization measures. What we hear still from many communities around the country is that they still dont have similar access to credit. There is still or there are still bear barriers, locked and they really like having Bank Branches in their neighborhoods, but particularly in rural areas thats not always the case. And they want to be able to have more interaction than they want minority depository institutions, and Community Development institutions, which tend to be very good at serving those under served communities to be strengthened. They just really care deeply about the Community Reinvestment act. As you many banks. So when you commit to making it a top priority to work with the other regulators to issue a strong new rule in a timely fashion . I will certainly support that effort at the board and with the other regulators thank you yes. I appreciate that, because minority communities are hurting right now. And this needs to be a priority. The pandemic has brought to light how severe the lack of credit and investment dollars problems are for minority, Small Business owners and i think its past time for our regulators to Work Together and issue an updated and effective cra rule. So i look forward to your leadership. And the miss thompson, new jersey is a blue chip state. According to u. S. News and world report, new jersey has the second best Public School system in the country, and the highest per capita income in the country. In other words we do a great job of educating our kids, and giving them the ability to reach their potential. Lets not just because new jerseyans are smarter than their fellow americans, but its because we invest in our people. So, this is a state that is part of a region that generates 20 of gdp for the entire nation. So we make money for the federal treasury. But as we met yesterday, and i appreciated our visit, i explained how many new jersey homeowners are being hit with a 12 punch. Of rising Flood Insurance rates, an unfair cap on state and local tax deductions. The oldest deduction in the federal Internal Revenue service code. And based on that thanks to the trump tax bill, which im you know were fighting to reverse both of those bad policies. But i want to make sure as director of the fhfa the you are sensitive to the concerns of homeowners not only in new jersey, but other high cost states. Yes we want to be fiscally responsible to the entities. The gsa is under your purview, but we cant simply do it on the backs of those that are actually generating revenue for the federal treasury. And you comment on that . Sure senator and thank you for the question. Certainly we care very much about the high cost loans, and as you know last year we had the historic increase in home prices. And that hit states that have high cost areas probably harder than most. One of the actions that we undertook was to increase the fees for some of the higher balanced loans. And that unduly impact a number of counties across the country. I think most of the country is not impacted, but there are about 104 counties across the country that are. And having said that, we do recognize that there is a difference between buying a home in new jersey versus buying a home in a can south carolina. And we have excluded from this fee, first time home buyers with the median incomes less than 100 , and weve also included our are excluded our foreign will product so there is no Fee Associated with first time home buyers. Those who live in high cost areas. But we know that there is a huge affordability issue, especially with firsttime home buyers. And we did not want to assassinate that problem. Finally governor brainard the, finn has a serious diversity problem. Something i keep pressing especially with chairman powell, and im compelled to raise it with you as well. If you are confirmed what steps are you going to take to improve minority representation . Particularly latino representation. Which is one of the worst that exist in the Federal Reserve brainard the founded on recognition of the importance thats why we have 12 reserve banks all across the country, and we have branches and in communities across the country, so we have regional diversity, we have always valued sectoral diversity. Its very important to have different kinds of backgrounds. But we really have lagged on racial and ethnic diversity. We are seeing some very important changes that we have worked very hard on at the reserve banks, in terms of the boards of directors. If you look there at latino representation it has gone up threefold just in the last four years, and so now we have about 25 of our class c directors are latino. We have about a third that are black, and we have now more than half who are minorities of one sort or another. So we made progress there, but in terms of actual leadership positions, we have only ever had one black president. We have never had a latino president , and so that remains a very high priority. Many of those boards spent a great deal of time making sure that we have more diverse pools of candidates and that our procedures and hiring are as good as best practices everywhere. Why . Because we know, as those who wrote the Federal Reserve act view, is having more perspectives at the table, diversity of every type, leads to better group think and better outcomes. South dakota is recognized. Thank you mister chairman. Let me begin by saying thank you to both of you for your continued participation in Public Service. Miss thompson, in september the f h f a, under your leadership about just a capitol framework which offered a strong incentive for the gses to create credit transfers or certainly relevant to the current regime. You began and you visited a little about that with the chairman of the committee here. I would like to explore that a little bit more because i believe that this is a legitimate tool and. Can you share with me briefly your philosophy on the crtc and how you might utilize it . Sure. Thank you for the question senator. I firmly believe that the transfer program is very important for the enterprises. As i mentioned earlier, fanny and freddy are the largest voter holders of credit risk in the world, and right now fanny and freddy are able to attain capital but they are not able to, they dont have enough to sustain a severe event, so if something really bad happens, the event will have to be paid for, once again, by the taxpayers, and it is important for us to continue to encourage the Credit Transfer Program so that the taxpayers are not on the hook for any extreme events and that private investors arent having to engage in the credit risk decisions. We just believe that it is critical for the enterprises, especially while under capitalized, to continue to transfer credit risk away from the taxpayers and into the hands of private investors. Governor, braynard first of all, thank you for the meeting in my office. I appreciate our conversation. I think a number of the concerns that our Ranking Member has shared with you, you had an opportunity to respond. Specifically an item that you and i spoke on very briefly and a conversation i would like to have here as well. I made a similar inquest to chairman powell on tuesday. I believe the adjustments to the supplementary leverage ratio, or the s o r, are necessary in order to account for the large influx of cash that has become challenging for banks to manage. Would you be emailing to work with my office to look at ways to address the liquidity issues through the calculation of the scl are . Thank you, senator. I certainly share your view that because of the need to respond to the pandemic, theres a lot more reserves in the system, and i support the removal of the reserves from the leverage racial for the banks, and i think it makes good sense to look for ways, while keeping capital strong, to find a way to adjust that supplemental leverage ratio, because of the much larger amount of reserves in the system. Thank you. I commit to working with. You thank you. Also, lets talk a bit about inflation. This is critical. We are at 7 by now. Stated goal is 2 , five Percentage Points, critical. I think in our discussion with chairman powell he made it clear that the fed could manage the demand side. I think you would agree with that. Demand is where you work at. Not necessarily on the supply side. Fair enough . Absolutely. I think over the medium term, inflation is a monetary phenomenon and we have tools that operate on the demand side. Okay. In order, you have made it clear that this is a critical priority. How much of the inflationary trends do we see today that we could manage with demand side policy only . I think we have set of tools that are very effective and we will use them to bring inflation back down sector to sector there are microeconomic market structure. Other issues at work. Supply disruptions at work. Thats not where our tools are effective. That lies elsewhere. But we are committed to using the tools that we have to deal with inflation, which is fundamentally monetary phenomenon. What im trying to get at, and this is not a dodging question, by question really is, with inflation where it is at, we know its both supply side and demand side. But clearly there has been discussions, and clearly you have Research Done is to how much of the inflationary trends that we have our attributable to the demand side policy. Can you share with us what you believe the percentage, or at least the amount of inflation would be attributable to demand side. The reason why i ask is because if you overreach, or if you dont do enough, you are never going to get it down. But at the same time, with supply side, we both recognize, you cant do much about supply side, and this is critical for the price of gasoline is going up because we have restrictions on the abate availability of new gasoline being put into the system in high demand for gas. Simply telling a consumer that the price has gone up and so we are going to make it more restricted for you to buy it, theyre still going to buy gas because the way they have to get to. Work in this particular case, as we look at food prices going up, and we look at gasoline going up, the price of rents is going to be going up, the price of housing is going up, how much of that interest and inflation do you think the responsibility, or should you be looking at in terms of the demand side of the equation . Governor, be as brief as you can, please. I will certainly, just looking at prices at the pump, prices at the grocery store, that is clearly hurting americans all over the country. That is about a quarter of the very high inflation that we see. I think you are certainly right to focus in on those areas as particularly difficult and very rooted in supply side constraints. Thank you. Senator tester from montana is recognized by his. Office i wanted to thank senator thompson and governor brainard for being here today. Governor thompson you said something about the statement that is something indeed we need to Pay Attention to, and that is the ownership gap today, as wide as it was in the 1960s when discrimination was illegal. This is a question for you, but then if governor brainard wants to add to this i would certainly like to hear it. What can you do about closing the ownership gap in the position that you are going to be hopefully confirmed for . Thank you for the question, senator. The access to credit is important especially in minority and underserved communities generally weve asked the enterprises to develop equitable housing plans and focus on some of the equities that have taken place. Theyre supposed to enter identify barriers for underserved communities, especially black and brown communities, to engage in Home Ownership, and we are looking over those now. Some of them focus on education and making sure that opportunities are available for people to understand that what the ownership process is, how it works, what it does, and then if there are other issues, like appraisals, that come into play, in terms of bias that may or may not exist, and we want to make sure that the enterprises are focused on, identified areas, and coming up with theories to identify those barriers, to really close the Home Ownership gap, because as you know, senator, a home is the greatest asset that most people own, and we believe that homeownership will go a long way towards closing the Racial Equity gap. Governor brainard, would you like to respond to this question, in the position youre going in for to solve this ownership gap . Thanks for the question, senator. So we are well aware of that Home Ownership gap. We collect the statistics and it has been very stubborn. We do work with banks working to provide help and incentives under the Community Reinvestment act to increase the supply of Affordable Housing, workplace housing. We know there are shortages in all the communities representative by members of this committee. I visited many of them. In particular, we have Community Development Financial Institutions who are very good at using subsidies and other subsidies to gather with Bank Financing and thats where the Community Reinvestment act comes in, to expand the supply we are looking. We are looking also at naturally occurring Affordable Housing. One questions we asked in the cra. Native cfis for example are very good at working on particular issues affecting tribal nations. So getting incentives for banks to partner with those institutions can help on the margins. Thank you for that. I would also say that, i think you both know this, there is an incredible supply problem out there across this country, which has caused housing crisis prices to go up. If you have any idea, any recommendations about what congress can do to help solve this problem, i would certainly love to hear them. I know the build back better proposal that may or may not be going anywhere in this moment in time, had some Housing Initiatives in it that i think could have been positive if they were passed. To solving some of the supply problems. I want to continue for a second. You and chairman powell have clearly worked pretty well under partnership and i know this will continue. I give power the opportunity to share earlier this week and i want to give you the same. I remember clearly the pressure that President Trump put on the fed for his own political gain, not the wellbeing of the economy. I am grateful for you and your colleagues commitment to the independence that you make that you maintain in the fed through intensive pressure. Can you tell, me briefly, why is this independence so very important . I think it is a long established tradition at the Federal Reserve. It certainly is important to be able to set Monetary Policy in a way that is closely related to the goals that congress set for us. We need to make judgments in the committee, free from political pressures. That is what we have been able to do under the independence of the fed. It is important to keep doing that. I will continue to support chairman powell in that. Thank you both. Thank you. Senator kennedy from louisiana is recognized. Thank you mister chairman, governor, director, congratulations on your nomination. Governor, i realize that the Federal Reserve, you have a big staff that advises you on inflation. And based on the track record, my guess is they also advise people to buy condos in las vegas in 2007. But you dont have to accept their advice. So, with respect to your predictions on inflation, how did you get it so wrong . Well, senator, thank you could you move closer to the mic . Thank you for your question senator. I think nobody got the pandemic right. The pandemic is unprecedented. But im asking you about inflation. I think, as forecasters, private forecasters certainly, the forecasters, the s e p, the whole committee, we thought that perhaps we would see more rapid resolution of the pandemic and the supply demand mismatches in particular excuse me for interrupting, but i dont have much time. Are you saying that inflation has caused another pandemic . We certainly have seen the perpetuation, for instance, of the Delta Variant leading to yes but are you saying the inflation has caused another pandemic . I certainly think the supply demand in balance that had been the biggest contributors to the very high inflation we have seen and directly attributable to supply chain issues, distortions in demand yes, heres what troubles me about that. I will agree that inflation is spreading but i dont see people going around coughing inflation at each other. I understand supply chains matter. So does the demand side. And sodas too much money chasing too few goods. And i dont think, and i dont think any fair minded person thinks, that inflation is solely the result of the pandemic. Let me move on. Do you think that federal regulatory authorities should use their considerable power, not just the Federal Reserve but federal regulatory authorities, do you think they should use their considerable power to discourage private banks from lending money to oil and Gas Companies . Okay. Do you think that those federal regulatory authorities should use their power to discourage private banks from lending money to gun manufacturers and dealers . Its not our if not a job we just ask them to risk manage. I thank you for that. Will you issue a statement to that effect . If you are confirmed . I certainly have made that statement, well continue to make that statement. Would you issue a separate statement saying i want to make it clear to basically for what its worth, all of my colleagues in government. I dont think that you should use your power to discourage private banks from lending money to oil and Gas Companies and gun manufacturers. I wont tell other regulators what to do, but i will be happy to talk about what we do at the Federal Reserve. What are Statutory Authority requires us to do. Okay. Im going to follow up with you on that. Okay. Yes senator. I take that as a yes and im looking forward to that statement. Director, sorry this is americas debt. I wont have time to ask you about it because i want to ask director thompson a quick question. Yes director thompson. Are you familiar with President Bidens risk rating two point oh pricing scheme for the national Flood Insurance program . Sir im not familiar with the details of that program. I need you to take a look at it. You talk about affordability, President Biden is about to make housing for at least 500 or 5 million americans unaffordable. By raising their Flood Insurance to thousand dollars a year, from basically 1000 to 5 or 6,000 a year. And you dont have a problem . Pierre oil quickly madam governor, do you think we have, we have four big banks. They have market share between 30 and 50 . In the greatest economy, in all of human history. They are not really banks they are countries. Do you think power, economic power is too concentrated in those four banks . Well i certainly think that from a Financial Stability point of view when you have a very very large institutions that are systemic, you need to have very very big capital buffers. Liquidity buffers and Risk Management. Because it would be very very difficult to resolve those banks in the moment of financial stress. Okay and thank you mister chairman. Senator kennedy. Uconn with your time. My office will work with you on that statement of oil and gas and gun manufacturers. Thank you senator. Senator warner from virginia is recognized. I would first like to take a moment thank you, normally we dont introduce our witnesses, but i want to take a moment to add to your comments about doctor brainard, and ive known her for over 20 years in her family. I think shes done a great job on the Federal Reserve. She has been the representative from the Federal Reserve bank of richmonds fifth Federal Reserve district. She cares deeply and as you indicated in your opening statement. About working families, she is ready to roll up the leaves and take on the challenging and the challenges our country faces. I think part of the issue with that is what happened during last year of the Trump Administration. When we got hit with covid, and that administration if had they responded quicker we might not be in as the same position as we would be. And she worked closely with secretary mnuchin, and in many ways she prevented what wouldve been an economic catastrophe. So i look forward to supporting her. And i would say to my good friend from louisiana, that when we were passing unprecedented amounts of money to put that capital into americans families pockets. I dont hear anybody complain about inflation . The first three trillion dollars, 2. 2 trillion dollars. Nothing. Next couple trillion you know okay senator give us credit on that. With the vast majority on both teams. They said that was the right thing to do. And i hope that the fed moves aggressively on dealing with what we can do is Monetary Policy. But i would say, i wish we had all been a little bit more impression about the challenge of inflation. We know and gas prices go up. But if we were looking at the indicator, and were looking at the indicators and that President Trump always used for his best weather vane. Stuck his finger in the air and say how is the economy doing, he look at the stock market. Well inflation hit 7 the other day, but the market to went up. So again im not saying that the Market Makers are smarter than us senators. But the markets have weighed in on this. If we look back as well to the early 80s, when we saw or the late 70s, when we saw the inflationary pressures, i think when it hit seven or 8 . Before it went up even higher. Interest rates were about 16 , they went higher than that. Theyre about 60 . Right now Interest Rates are about 3 . So the market at least and boy a bit doctor brainard i wish they had never heard of the word transitory. Because we will probably to contest can you to use that term. But i would say that the market indicators, the market, Interest Rates, and candidly the fact that most of us on both sides were all in beignet on beignets making the investments to deal with covid. I want inflation to go down, but i think and i do think, we will start to see it move down. Incrementally if you look at the rise and you look at the slow declines, but i hope that the beignets i want to raise one issue, and i want to compliment my friend from louisiana and north carolina, because one of the things i think we did that was really bold, along with help from all the folks on the side of the aisle, was we said that we need to get more capital out. We need to get out to more disadvantaged communities during covid. And director thompson i want to recommend her, im not good chance to ask your question, but i commend you for saying youre still open to that and the fact that in Housing Financing you know i know its a challenging area. Somebody worked my friend on this and still has the scars to prove it. The fact youve got the bankers, civil rights communities supporting you, i am looking forward to supporting you. But one of the things we came up with, and working with secretary mnuchin, was trying to put more capital into minority institutions and. And i would like to thank my republican friends for thanking on that. Almost a double amount of Tier One Capital we put out in that sector. By definition, lens to lower minority. And doctor brainard if you could weigh in on the other things we can do. There are other things, our private capital that wants to go in these institutions but theyre afraid in the change of control groups. Would you work with me and other other people in this committee, to make sure that this Financial Sector signifies that they get the get the support they need to perform these critical critical services. Yes we will. Senator that was a quick answer. Both witnesses are good at quick answers. Congratulations to both of you on your nominations. It should be a proud moment for both of you. Miss brainard the consensus has been a that the fed board has worked on a largely monetary front. And its confirmed youre going to be elevated to the position as vice chair. So this in mind, would you believe that the elevation of your role to vice chair provide c with any special power or authority to set board agenda items . No quite the reverse. The vice chair role is traditionally a role that works the chair in the formulation of Monetary Policy and achieving consensus at the and i can look forward if confirmed, to take on those responsibilities. Thats good to hear and i agree. On your time on the boards, youve been called the feds great dissenter. That was in 2018, that was the first time the governor had issued a dissent. The feds meant to be a collaborative institution, i think we all know that. Governments have to commit to other members. And proposed changes or reform. Given the longstanding consensus that theyve had on your term, would vice as vice chair would you push for policy changes like word consensus . No i like to put forward a number of roles, that did achieve consensus. Its my preference, i dissented rarely, i always supported implementation of the law. Especially of s 20 1 55. There were some provisions i particularly liked in that and i said that publicly. I only dissented on areas that i thought that they went to the resilience of the largest institutions. And that was because of the potential Financial Stability implications. And only in areas outside of the limitation of the law and in the judgment of the board. When i did i always worked with vice chair and chair powell, to let them know what concerns i had. To see if we could arrive at an agreement that. I would always give them my statements ahead of time to let them correct me, if i got something wrong. And to rebut it. So i always try to be extremely collegial. I did not have or did not relish dissenting at all. I only did it in a few cases. And those cases were around those core issues, around the largest institutions. Im going to get on your political activity, i think you may have said that your behavior would be different going forward. We know you gave a max contribution to the president ial campaign for Hillary Clinton in 2016. And i think thats probably the only governor thats done that nearly 22 years. I know some were pretty politically active, but after being confirmed as governor they eliminated their political activities. So what was this importance of this for you. I did that in consultation with our ethics officer. They make it clear that that hadnt occurred in quite some time. No unfortunately, it is where it has occurred, but it certainly is not something ive done since then. I do not think the appearances issue is a good one for the fed. So i have not done it. But yes its clearly permissible, and thats something maybe not i wouldve done had ive been there longer and understood. But that was not customary. Thank you. The miss thompson can you provide more clarity about the fhfa releasing freddie may and 14 back from the conservatorship. And are you concerned about any negative market impacts . Senator its a great question, and certainly we would defer to congress on the exit from conservatorship for the gses. But in the meantime there are number thing were doing. Building capital, we are encouraging the credit Risk Transfer program, and we are establishing. We are also supervising them in a safe and sound manner, making sure that they lead their mission. So whenever they exit from conservatorship, they will be ready. I also mentioned that there are a number of stakeholders that would likely need to be involved and engage in the discussion for that if it ever happened. And the treasury certainly as the majority owner of the gses and certainly going to make sure that the taxpayers are adequately compensated. We probably would have conversation with the fed, also with the justice department. On standing litigation. I just a number of steps that would have to take place before the enterprises would be able to exit conservatorship. And i have to meet their capital targets which are quite masked. Thank you. Again, congratulations and thank you mister chair. Thank you senator warren from massachusetts is. Recognized thank you, mister chairman. Grand graduations governor brainard and congratulations miss thompson on your nominations. I would like to talk a little bit about inflation and about the feds tools to deal with it. Governor brainard, lets start at the beginning. If the economy is overheated, what is the feds primarily to tool to cool it off . The federal funds. Rate so, increasing fan Interest Rates in other words. But what if inflation is caused by kinks in the supply chain . Prices jumped because the supply chain is just not functioning. Does the fed have a tool to deal with that . No. We have a tool that operates on the demand side, which is the federal funds rate. In other words, Interest Rate adjustment is your tool, and it doesnt work on things like supply chain kinks. When chair powell was here on tuesday, we discussed market concentration and how it can lead to increasing prices, while consumers are facing higher inflation Profit Margins for corporations have surged to their highest levels in 70 years. Inflation has not gone up because one day corporations woke up and said hey, today were going to be greedy. Now. Inflation has gone up at this moment because of the way that prices are passed on in a more concentrated. Mark it. In a highly competitive market, one costs go up, businesses pass those costs along to their customers, but they can expand their Profit Margins because other competitors are just going to beat them down on prices. But in a very concentrated industry, one with only a few competitors, a dominant cooperation can use the excuse of inflation for passing along rising costs and then add in an extra bonus for themselves to increase their Profit Margins. As chair powell put it on tuesday, those firms are, quote, raising prices because they can. So, governor brainard, would you agree that increase market concentration has allowed some corporations to profit off pandemic disruptions by raising prices on consumers beyond the increased costs that the corporations have to deal with . Certainly a lot of Economic Research would suggest that in concentrated industries, individual producers have more pricing power. That kind of dynamic is certainly possible. Okay. So i know that the fed has a role in approving bank mergers. But with respect to broader concentrations throughout the rest of the economy, does the fed have the tools to deal with increased concentration there . No. No. And that is really the point here. Dealing with inflation requires the fed to act if the problem isnt overheated economy. But dealing with riser Consumer Prices also involves the ftc, the department of justice, in breaking up monopolies and investigating crooked price fixing schemes that also increased costs for hardworking families. That is why it is so important that the Biden Administration is taking action to fight Corporate Power by enforcing antitrust laws and boosting competition. Governor brainard, do you think that the steps that the administration is taking to address Market Competition and price fixing have a role to play in helping families that are facing rising prices . I certainly think that we are hearing, from working families around the country, about inflations and some of it is in areas where we are seeing supply dynamics. But again, we do have a powerful tool and we are going to use it to bring inflation down over time. Good. I understand that. But price stability is a core part of the fred feds mandate and i know you care about that. I am just wanting to make sure that we keep our eye on all of the things that affect prices for consumers. Todays price increases have many causes. I hope that the fed treads carefully even using its tools to help lower prices for american families. I am glad to see that the administration is using all the tools that it has to bring down prices over a longer run. That is our collective job and i appreciate your help in this and your thoughtful comments here. Thank you, and again, congratulations to both of you, im sorry miss thompson that i didnt get to question you, but i am looking forward to supporting both of. You thank you. Thank you mister. Chairman senator hagerty from tennessee is recognized. Thank, you chairman brown. Thank you for callings important hearing. I would like to congratulate our nominees, governor brainard and to senator thompson, its good to be with you and i appreciate your time. Before we start i would just like to highlight the fact that we are in an unprecedented time. Governor brainard and i talked about this yesterday. If you look at the Consumer Price index it was released for this month, over december, over the prior december, we are at a high that has not been seen in almost four decades. The median age in america is 38 years old. The average american has never seen inflation of this level. I want to underscore the fact unappreciated complementary reflected, governor brainard, in your ability to deal with this very carefully as we undertake the challenge and get priced debility back under control. For both of you i have a House Committee question to ask before we get started. For both governor brainard and acting director thompson. As a matter of housekeeping, have either of you ever currently or in the past embellished any part of your resume, your background, your publications, or any other aspect of your accomplishments . A yes or no wilson flies. No. No. I thought. So governor brainard i turn to you, and in one of topics we discussed yesterday is one that i raised with chairman powell on tuesday when he and i discussed, and that is regarding the actions of cfpb director show bra and interim director greenberg in their attempt to force out the chairman before term expired. This destruction both of institutional norms and historical precedent undermines the independence and the integrity of our financial regulators. I want to ensure that a similar situation does not occur at the fed. So my question, governor brainard is slightly different from that you answered with senator tillis. Do you believe that the fed chair has the ultimate discretion to set the feds regulatory agenda . It certainly is the case that the vice chair for supervision and the chair Work Together, but yes, the chair determines what goes to the board for votes. Thank you. I appreciated your answer yesterday. And thank you for being clear today. Acting director thompson id like to talk to you about stewardship of the fhfa if i might. As the director of the fhfa, you are meant to carry out the law, not to be a policy maker. The housing and economic recovery act does not permit indefinite conservatorships, by definition, no conservatorship is meant to be permanent. So my question of you is, will you commit to do everything in your power to fulfilling your statutory mandate to and the conservatorships . Senator, that is a great question, and certainly no one ever expected the enterprises or any Financial Institution to be in conservatorship for 13 years, and certainly we believe that congress has a role and we will be working to help in any way that we can to facilitated questions that you have. But we think that this is something that Congress Needs to work on as well. Is there any point in a law that says that Congress Must approve a conservatorship . I dont know if they must approve an exit from conservatorship, but there are a number of issues that congress will have to address, specifically if the enterprise exit conservatorship, will the companies be private, will they be public, what form will they be in . There is a host of issues that have to be considered, that Congress Must weigh in on. Certainly if the fhfa can get the enterprises ready. The heroes act does not provide adequate clarity, i hope you will get back to me as quickly as possible with the areas that you see inadequacy in the legislation, but because my expectation is the legislation is clear the next it is called for. I want to get to another point though in that has to do with a recent reductions in gse Capital Requirements. How do you see that reduction fit with the working toward the exiting the conservatorship . A great question, senator, and i can assure you i firmly believe in safety and soundness of the genius ease and i think that will be backed by the Capital Requirements and im a two minor changes to the final capital rule is finalized at the end of december and those changes were designed to promote the utilization of the Credit Transfer Program and the Program Transfers market credit from the enterprises to the private sector. They also made a change to not the leverage requirement but the leverage buffer. So that the buffer would be, would not be static, it would be more dynamic. I believe that banking regulators are also looking at the supplementary leverage ratio on the banking side as well. The changes that i have may, just for context, before the crisis, the required capital for enterprises was about 55 billion. Right now even with the proposed changes that i have recommended, the required capital is about 300 billion dollars, which is over five times what it was before the enterprise went into conservatorship. I think we need to be careful because in my home state of tennessee housing prices are up 20 . Thats a case across the board. But you are overarching objective of getting these out of conservatorship, i applaud the careful balancing act, an independent perspective on that as well. I look forward to very conservative management. There and now senator van hollen of maryland is recognized. Thank you mister chairman. Congratulations to both of you on your nominations. You are both eminently qualified for the positions youve nominated to, when i look forward to supporting your nominations. Doctor brainard, let me thank you for your leadership in getting the fed to adopt a realtime Payment System through fed now. As you know, People Living paycheck to paycheck are spending billions of dollars ian Overdraft Fees or payday loans because of the lack of a realtime Payment System. They are bearing the costs of this inefficiency in our system. I have a very simple question. Are we on target for launching a fed now next year . We are on target. As you say, it is something that Many Community banks, other payments providers, and Community Groups are very supportive of, and i think larger banks are very supportive now as well. Good. Im glad that more and more people are supporting the effort. As chairman powell acknowledged in his testimony before this committee on tuesday, because of the American Rescue plan, we have been able to lower unemployment in the country way ahead of projections. The 3. 9 unemployment levels we saw in december, that was a full year hitting that target, a full year before with the fed had projected, and four years before with congressional blush budget set. Thats the good news. On the other hand we see disparities behind that number. Black american unemployment is at 7. 1 , and while long term unemployment has been cut in half over the past year, we still have about 2 million americans who are long term unemployed, looking for work and not finding it for over 27 weeks. How will these facts factor into your analysis in considering whether we have achieved one of the main said goals of full employment . As you noted, unemployment has come down very rapidly, which is very welcome. But we still have between three and a half and 5 million fewer jobs than we would have in the absence of the pandemic. Some of those are going to come back more slowly. So as we look at Labor Force Participation we have not seen the improvements there. It is between 1. 5 Percentage Points, looking at the total label force, 1. 1 Percentage Points looking at the prime image labor force behind where it was prepandemic. So that Unemployment Rate is higher when you take into account nonpartisan patient. Where are those people . We see very big concentrations of missing jobs and leisure and hospitality despite a lot of openings. We have a lot of parents and we look at parents and children with the data who cant go back because weve got School Closures and particularly for young children, still very limited childcare options. That hits black and brown parents more in terms of the statistics. And also concerns about the virus. Some sector reallocations. We are going to see that participation cycle like the employment cycle. I have strong confidence that we are going to see improve more slowly over coming quarters and years. Thank you thank you doctor brainard. As you know when we look at those figures, over 7 for black and american unemployment, those are people looking for jobs and under unable to find them. On top of that we have the issue of people who are looking are not looking for a very various reasons. And we are also looking to reduce the amount of childcare for those families. Miss thompson thank you for your current stewardship at fhfa and also one of the major household costs. But moderate or low income families their energy costs. In fact for low income households, the share of their budget is three times higher. Then for higher income households. And if we could make Energy Efficiency improvements we can get those bills by 35 . I wrote to you last august and urge you to thank you for the actions you took an october. Can you just elaborate a bit for the importance of this issue and the other measures that we need to reduce these costs for households. Yes thank you for the opportunity senator. We believe that the Energy Standards have come a long way since the enterprises started engaging in ensuring that the Affordable Housing units at in particular on the multi family side, had these energy efficiencies. We are encouraging the enterprises to and especially in the low income and affordable space, to make sure that the loans that they purchased have a component of energy efficiencies. I do believe that they give discounts for purchasing those loans. We will continue to work with you on that and other aspects of Affordable Housing. Thank you senator. Thank you senator lummis is recognized. Thank you and congratulations to both of you. Governor brainard thank you very much for this time you spent with me, and the conversations weve had in the past year. I appreciate that very much. Governor brainard my question is for you. As weve discussed, wyoming is the largest exporting state of energy in the nation. And that is because of our small population, we do not consume very much of the energy we produce we export it. Its critically important to our economy and to our job base and to American Energy independence. So do you believe, that the Federal Reserve has the authority either through rules or guidance, too broadly curtail Community Banks and investments in oil, coal or Gas Exploration . No no senator. Thank you. Do you understand the Regulatory Burden that incorporating climate risk into Bank Regulation may have on Community Banks in wyoming. I do and i dont favor asking Community Banks to put in place those kinds of Risk Management, to the extent that a supervisory guidance is appropriate, or is really appropriate for the large banks that have a big imprint. Not for small banks. We dont want to burden Community Banks in particular. Thank you very much, and Community Banks in my state are the backbone of banking. Again because of our small population. Thank you so much. As you know, i have a keen interest in wyomings special purpose and depository institutions. And the applications. And is it a fair characterization to state that, the Federal Reserve is currently making progress on the importance of the legal and supervisory issues. Regarding the wyoming depository. I think thats an accurate characterization senator. Tell me why you believe responsible financial innovation is responsible to both Monetary Policy and Bank Regulation . We are seeing quite a bit of Innovation Associated with technology. Consumers now have access to their ability to make transactions using their mobile phones. This will continue to evolve the Financial Sector. It and we just want to make sure that that is done within the existing guardrails. So like activities are regulated in alike manner. Consumers are protected, and that is really our focus on responsible innovation. Do you believe that it is important that Innovative Financial technologies, like Digital Assets and distributed ledgers, be inside the regulatory perimeter . Yes i do believe that again, the focus should be on like activities, like risks being treated in alike manner. And of course our existing regulatory structure was designed for different kinds of charters and institutions. So that needs to be involved, and we Welcome Congress taking a very Important Role in updating that statutory framework. China has produced a digital , a Central Bank Digital currency. It seems to be available to the retail customer. Allowing the communist party of china to surveil the uses of its Central Bank Digital currency. As the fed, and the Congress Considers a Central Bank Digital dollar. Do you believe it should be available to the retail customer . Or should the feds be available only as it is now to the Banking Industry . This question about Digital Currency is a big question, and we really are looking to congress in the first instance and the administration to give us guidance in this area. We want to make sure that we do the requisite research on policy and technology, so were in a position to move forward if congress decides its important to be able to compete with china in this regard. Of course Privacy Protection is very important in any kind of approach that might be taken. Thank you very much, again congratulations to both of you on your nominations. Mister chairman i yield back. Thank you senator, senator smith from minnesota is recognized. Thank you and welcome to both of you, its wonderful to have a chance to see you in person after a virtual meetings. I would like to thank you so much for your willingness to serve our country. And miss thompson im going to start with you. As i said when we spoke on the phone, it warms my heart to see a career Public Servant have the opportunity to, or for us to have the opportunity of you leading this agency, thank you so much. I want to follow up on the question that senator brown started with, touching on issues of gaps in Home Ownership and in minnesota, we have much to be proud of. We also face significant challenges around Racial Equity which is essentially the proposition of prosperity in our state should be equally shared. The reality is, and in the minneapolis metro area, the Home Ownership for white families is one of the highest in the country, wall for black families its closer to barely 20 . This is the largest gap in the whole country. I might just note that this is the legacy of old federal policies that contributed to this. And in addition to old red money. Theres a fascinating study, which tracks this legacy in home values today. And today you still see disparities in home value because of this. So director thompson, could you just talk to us, if you are confirmed which i hope you will be, how you see the work that we have to do ahead and to address this Home Ownership gap which contributes directly to wealth and equality that we face in our country. Thank you for the question senator. Theres a lot of work that needs to be done in that area. We do believe that qualified borrowers ought to be able to if they can, afford a home a mortgage loan. One of the things that is taking place, at fannie mae in particular, is any potential home owners are now renters. When youre looking at Credit Scores one of the things that the traditional credit score does not take into consideration would be rent payments. And typically a rent payment or a mortgage payment is the largest payment that most people have for their households. So fannie mae has taken the step to incorporate 12 months of positive rental payment into their credit scoring. So that the typical requirement of something being a debt, as opposed to an expense, is what a rental payment is, thats now taken into consideration in a positive way. And thats to help improve the credit scoring process. We think there are a lot of Little Things around the edges looking at nontraditional Credit Scores and not using them as sole factors but as additional factors in really providing sustainable access to credit to Home Ownership. I look forward to working with you on these things. I think you are pointing out how we have old systemic ways of doing things, and end up having a discriminatory impact. If we look at them we can change them. And then we can start to change the path or create a much better path for people in this country. Which is why were here. So thank you. And doctor brainard, we had a chance to talk about a variety of things. We spoke at the phony of the day. Many of my colleagues have also discussed some of the questions we were discussing, full employment and the disparities in employment amongst black families, versus some white families in this country. I want to just drill down on a bit of whats senator van hollen was asking about. And the fed has limited tools in this category. But could you tell me, if we were to see Interest Rates increase, what impact would we anticipate that having unemployment . And particularly as we try to look at broadbased employment . Weve seen an economy thats grown about five and a half percent over the last year. Weve seen those broad unemployment numbers coming down really quickly, so theres a lot of underlying momentum in the economy. So as we go forward, on our plans and asset purchases begin to raise Interest Rates, at some time beyond that to shrinking the Balance Sheet. I think will do it in a well communicated way. A transparent way. To allow markets to react in a measured way. And i believe we will be able to see inflation coming back down to target while the employment picture continues to clear. There are some short term constraints there, that i think are limiting people from coming back into the labor market, as those are lifted. I think we will have continued gains unemployment. Thank you im out of time, i just want to take a moment to say that one of the biggest constraints as you and i have talked about, that people dont have access to affordable childcare, so theyre left being unable to work. And thats one of the things we would address in the build back better act. Which i hope passes. Senator smith thank, you senator crapo is recognized from his office. Thank you mister chairman, let me start out with you director thompson. First of all i very much appreciated our visit last tuesday, i have one quick question for you which we discussed ben. Housing. Which is a top priority of mine. And its been my view that Congress Must find a pathway forward, to resolve conservatorship of our gses. In that context, i toomey for releasing his principles last march, which has shows many of the goals that i outlined when i was addressing this as chairman of the committee. These principles include establishing stronger levels of taxpayer protection. Preserving the 30 year fixed rate mortgage. The increasing competition. And ensuring a level Playing Field for lenders of all sizes. Promoting access to Affordable Housing. My question to you is, if confirmed as the fhfa director, would you be able to support legislation which is consistent with these principles. Absolutely senator. Nice brief answer, and the right answer. I appreciate it. Lets move on to welcome to you. I appreciate first question i have for you is on inflation, which you already talked about today. But i am concerned about the consumer crisis and the fda director of 9. 7 . These high and persistent Inflation Numbers are, i think, the greatest threat to our economic recovery. And now is clearly the time the question i have for you on this, if i understood you earlier in your testimony, you said that you are confident that we will get back to 2 rate. The question i have is, how quickly do you see that happening. Is that something that we can have done in months . Or years . What is the timeframe you would expect to see . Well, thank you senator for your question. So, i certainly also am very concerned about the high level of inflation. And we are committed at the Federal Reserve to bringing it back down to target. And we are taking a number of actions. We have already decided to end asset purchases in the first quarter. Youve seen that the committee has projected several hikes over the course of the year. We will be in a position to do that. As soon as asset purchases are and we will have to see what the data requires over the course of the year. And we started to discuss strengthening our Balance Sheet. In terms of the projections on inflation, i think they will remain high throughout the first two quarters. Certainly in the committees projections, you saw it coming down closer to two and a half percent by the end of the year. But i think we should all take these projections with a fair amount of caution and we will obviously try to bring it down as quickly as we can but consistent with a sustained and a strong recovery. Thank you. And i realize its hard to predict these kinds of things, but i appreciate your projection. Last question is, and i know you have been asked about this senator toomey talked about and i know senator kennedy talked about the same thing. And i understood your answers to that. I personally believe that its viewed as unfavorable and politically unacceptable and controlling the allocation of capital is not a new concept. You will recall, operation choke point from the Obama Administration years. And i certainly hope that president obama as he nominates with policy at the fed. You have already indicated, you dont believe that the Federal Reserve should act in a way to try to choke off credit to Traditional Energy companies. My question, though, is if policies such as those senator toomey was talking about are utilized in our stress testing processes, does that, in and of itself, select specific types of industries if they are going to be selected in that way and subject them to the potential for Capital Requirements or some other type of Regulatory Burden . They would not be there if yeah, so, i think about supervisory guidance. Simply asking institutions, large institutions, to be measuring, monitoring, and managing that risk. This is what we ask them to do across the board. So, i dont think it has a particular cast to it. And on a Scenario Analysis, i think of concentrations of areas where wildfires are becoming more frequent or flooding is becoming more frequent. If insurers are pulling back from covering those properties, our Scenario Analysis would simply allow us to see, where are those risks building up and are there certain counter that are very exposed in terms of covering those risks . And might they be subject to a shock that could amplify financial instability throughout our system . So, that is how i think about climate Scenario Analysis. It is quite different from the stress tests that banks have undergone under the traditional Capital Planning framework. Thank you. Thank you very much, mister freshman chairman. First, let me commend the president for his nomination. Congratulations to your elevation to vice chair. Congratulations for nomination as permanent director of the f h f a. You have all touched upon the Critical Role of housing in our economy. And i know we have already talked about some steps we would take going forward. But one of the interesting things is this ties and also to the inflation problem we are seeing right now. As i believe right here, 30 of the based on housing prices, as a result that we dont get a handle on housing, we will not get an effective handling of inflation. With that in mind, raising Interest Rates, will that help us or hurt us or make it more affordable for working families to get good housing . I think the question about Workforce Housing and Affordable Housing, to the extent that we look at it at the Federal Reserve, is really very much a supply side question. We do meet regularly with the home builders. And they have been telling us, even before the pandemic, that shortage of lots is an acute problem. So, we went into the pandemic with in and of course the pandemic has exacerbated materials the and skilled tradesmen availability. So, all of those things, i think, on the supply side are exacerbating these issues. Our tools are very limited on the supply side. We have some incentives under the Community Reinvestment act. And we are trying to improve the credit that we naturally occurring housing as well as shoring up those really important institutions that use housing subsidies in partnership with banks, but our tools are limited on the supply side. Thank you. Governor burnett, are you aware of the announcement yesterday that the bank of england is incorporating climate as part of it for all their institutions . I have not studied their most recent statement there. No. But i would presume that they there are major motivation is the Economic Impact more than anything else. Or at least, is that so, when weve talked to the counterparts, regulators and other countries such as the bank of england and the europeans, canadians, australians and others. We are certainly taking on board just of the Financial Risks associated with Climate Change and trying to incorporate that into their supervisory frameworks. We have already seen some aspects of the financial industry, particularly insurers, incur significant losses, particularly in california and wildfires and so, there definitely is an economic effect that is being generated, i think, with more frequency with a climate. Is that i think the statistics that i saw recently were about 630 billion dollars worth of damages over the last five years from Severe Weather. And that is a historic high. And of course, we all see it in our home areas. One of the other aspects of inflation and that is something that is really beyond the specific control of any agency in the United States government. Because it is basically what struck me is the production is not even up to the levels that they have set for themselves. So, do you have any insights on what is going on in that market . So, we dont have a lot of insights. Our Dallas Reserve Bank tends to be closely studying trends there. Its certainly true that about a quarter of consumer inflation over the last year has come from suit and energy, but really disproportionately from Energy Prices at the pumps is hurting working americans across the country. Thank you. A quick question, miss thompson, one of the things we have seen recently is the trend for private equity to buy up lots of homes. They have the resource to do that. And take them out of the market and put them into the rental market. And in some cases, with the ability to dictate private prices. Is there anything you can do at your agency to look at that . Thank you for the question, senator. And we are taking a look at the private equity participation in a couple of different errors. And the manufacturing Housing Communities where we are very that they have protections and will not purchase loans unless there are protections for the communities, the owners, and the renters. We are also looking at between fanny and freddie, there are probably 9000 properties. We have established this First Look Program that allows and nonprofits to have the very first look at all the Reo Properties that are available. And we have increase the number from 30 to 45. And we have been looking at the non conforming loan sales as well. And what we require is that any buyer has to go through a waterfall where they have to offer bob buyers and these pools, Loan Modifications and some of them have been dealing with 3 to 4 years. But they still have to offer these borrowers Loan Modifications. We have always asked structure smaller pools, so that nonprofits can start buying and working with these loans. Thank you. And i apologize thanks. Senator kramer from north dakota is recognized. Thank you mister chairman, Ranking Member to me. Congratulations to both of you on your nominations. And governor, braynard, thank you for your discussion, i enjoyed it very much. A very interesting. I like most of your answers. So, now i will try to reconcile them a little bit after yesterdays meeting. And given todays conversation, you have been quite consistent. And particularly in the last couple, you referenced and your response to a climate Scenario Analysis as opposed to climate stress test. The example you used yesterday was fire. So, if you have a forest fire situation, there are insurers backing out, that represents a risk. But you use that in response to a climate question, not a fire question. I think it was senator reids question that you referenced, record weather events. I just want you to be really definitive about this issue. Maybe as definitive as you were yesterday. Are you in sync with chairman powells position, and he stated it a couple of times. Would you say you are pretty well in sync with his analysis or his assessment of climate and where it belongs in your mandates . Yes, senator, thanks for the question. Yes i am. He said, to the degree that it fits within your mandates, the climate is one of many factors, basically. Important so, how is it that you get so much more now, im asking you to im trying to understand why so many of our friends on the other side of the aisle think you are wonderful on climate, but they will not support chairman paul for the same reasons. I am just wondering, how can i recognized that in my mind . Im not asking you to be my psychologist, but tell me your thoughts. We do operate within our statutory mandates and we talk a lot about what those are and what those mean. So, i think, generally speaking, those are the guardrails that we operate within. I do try to be aware of emerging risks, generally. I thought it was important to develop research in the area of digital finance, for instance, several years ago. So, i am looking out over the horizon sometimes. And perhaps talk more about the research. But we are very instinct in terms of what we actually think our responsibilities as an institution or. I just want to just a little opening on the recent question senator reed asked you about the supply side. And particularly, gasoline, fuel. You rightly recognize that that represents probably a quarter of the inflation. And, by the way, its going up as fast as inflation the rest of inflation, if not faster. I come from a state that is now producing about 400,000 barrels of oil less than it before. It has a lot of capacity for more. Cash starved, quite honestly. And some of that is the signals that they are getting from banks and that banks are getting from others that investing in Oil Production is the demand is going up, the supply is being held down by both rhetoric and policies. I know its not your policies, but it is the president s. And i worry that we want to transfer climate guilt by suggesting that we shouldnt produce so much in the United States, while Global Demand goes up and our adversaries who are not nearly as environmentally friendly as we are, produce. Does that matter, do you think, in these climate scenarios that we may very well be hurting our own economy, our own job creation, while transferring with the opportunity to another country . The question that you are raising is a very big one that i dont study in terms of energy policy. Generally, i would just say that when we do supervise institutions to see that they are managing their material risks, it is pretty pedestrian stuff. It is, do you have a Risk Management committee . Is that Risk Management committee well informed . Do you have the right data . Do you have the right models . Do you have the right controls . It is really not specific. In any way. Too particular borrowers or sectors. So, i understand the concern that you are raising. But our supervisory guidance is very much around making sure those guardrails are there. Thank you. Thank, you senator kramer. Senator cortez from nevada nevada is recognized from her office. Thank you very much. Welcome to both the nominees and thank you for your service. Thank you for your commitment to serve moving forward. Let me start with director thompson on federal thank you so much for taking the time to talk. Earlier about this particular issue. As you well know, and we have discussed this it is regulated by the federal finance agency. In our discussion, i noted that my Offices Research discovered that the Federal Home Loan Bank serves nevada hasnt long neglected investments in our state. This is an issue for me. So, my question, director thompson, it would you commit to working with my office to ensure that the federal home loan in san francisco, improves on its record in investment in that . That is a great question, and senator, and thank you for bringing this issue to my attention. It is my expectation that the federal will serve each state within their districts. And i would mention to you that the did change the scoring mechanism so that nevada is able to get their portion of Affordable Housing program. But they should not be a case where there is a state that does not get a portion of the Affordable Housing program from the banks. That is right. Thank you. I know they made a change they have been working with me and i appreciate that, but i know there is a role for you to play as housing director. And in that role, that in reviewing every landing plans, only one included investments in native american communities. So, my next question is going to ensure that landing plans appropriate to the needs of their communities. Thanks again, senator, for the question. As i committed to you, i will have conversations with all of the Bank President s and the Community Investment officers that reside in each of the Federal Home Loan Banks to talk to them about filling the specific needs in their respective communities. There shouldnt be a case where there is a travel community that is not being recognized in the Community Lending plans for the Federal Home Loan Banks. And we are going to have those conversations. Thank you. And, director, one final thing, beyond Affordable Housing programs and volunteer programs, thank you for your commitment there, im curious, do you have any other with respect to the oversight sure, yeah, so, we are looking at, right now, i should say the federal phone play a huge role in the Financial System. And during the pandemic, they certainly were very much utilized, but the advances right now are relatively low. And so, we are looking at ways to just oversee the homeland banks and make sure that the advances and the earnings are appropriate. So, i have my team working very closely with the banks to make sure that there are supervised in a safe and sound manner. Great. Thank you. I look forward to working with you as well. As we move through this process. Governor braynard, let me go back to you as well, and thank you as always for speaking with me. It is a pleasure to welcome you back to the community. I know you have a long career in Public Service that you represented interest on an international stage. I also know that in the last few years, you has interested you to work closely with former secretary of treasury mnuchin in the former in response to the covid19 pandemic. Clearly, you have played a Critical Role at the Federal Reserve. Very briefly, because my time is running out, can you tell me how you work with the other Board Members . To not only respond to the pandemic, but also Bank Regulatory challenges as well . Well, we were asked surprised i think as everybody by just the incredible we saw ive never seen anything like that, so we needed to respond very quickly. And i think we just worked seamlessly across the regulatory agencies. We did need to relax some Bank Safeguards to make sure that they could continue lending, to make sure that their existing loans would be considered and we stood up facilities very quickly and we also, wants to turmoil past, we were very quick to wind them down. And i think, generally speaking, we are in a much better place today and as a result, we have Many Americans have jobs and Balance Sheets that are much healthier. And many more businesses are thriving today because of the efforts you did here in congress. And the efforts that we did to carry out those programs. Thank you. Thank you both again. Thank you senator cortez. Chairman, thank you. We had quite the inflation rising that takes me back to when i graduated from high school. In montana and other mountain states, inflation is actually 8. 6 . Significantly higher than the national average. This report asks a continued bad news for montanans. Weekly earnings declined by 2. 4 . Ive heard many of my colleagues on the other side of the aisle that said i remember right, here not long ago, challenging this notion that inflation is transitory. We heard from smart people who are sitting right where you are, rejecting that notion. Forecasts are forecasts. You dont always get them right. I hope that inflation has reached its peak, but i dont see anything in this region report that provides any sort of confidence that inflation is fading in meaningful ways. In fact, on the contrary, pulling it back, what is going on right now in china with a zero covid policies i think the supply chain disruptions will increase. I met with montanans just an hour ago, they told me that the they cant get fertilizer back and forth across the canadian border. Fertilizer prices have doubled. This is a huge issue right now for farmers. But one more contributing factor to the Inflationary Forces currently in this economy chairman powell told the committee on tuesday that high insulation is a, quote, Severe Threat to the labor market. I agree with that and i hope you do as well, governor braynard. Returning to my questions, i would like to follow up on climate related Financial Risks. Over the past year, youve delivered a number of speeches, suggesting that the fed may take a more active role in environmental policy. Specifically, you announced that the fed is, quote, developing analysis to model but has associated with Climate Change, and quote. However, the fed act lacks both the experience and the expertise and environmental matters. Further, actual climate researchers have found the current climate models cannot be used to provide financially meaningful information. This raises the traveling prospect for many of us here today that the feds work in this area is politically motivated rather than based on actual data or expertise. And i say that respectfully, as a chemical engineer by degree. My question for you is, on what basis do you believe the feds position to shape environmental policy given its lack of expertise in this area . Thank you for your questions. First, on inflation it is very high and we have a responsibility to bring inflation down. We are orienting Monetary Policy to do that. We have accelerated the tapering of asset purchases so that we can be in a position to move on increasing the federal funds rate and we have projected several increases this year and also talked about having a Balance Sheet starting to shrink sometime thereafter. So, we are very focused on that the. With regard to the issue surrounding climate, we dont do environmental policy at the Federal Reserve. As you say, it is not our expertise. But we do have responsibility for is making sure that supervised institutions are properly risk managing and we do have some sort of responsibility for understanding potential Financial Stability implications of a host of different kinds of things and that is where Scenario Analysis comes in. We dont have any expertise and disease and pandemics, but certainly it turned out that the pandemic had a norm is Financial Stability consequences, so its just incumbent on us to be doing research to understand how shocks could affect our Financial System. And that could include Severe Weather events and other aspects as well. Speaking of shocks, i think we all remember the war of jan cooper, what happened back in 1973. When we were dependent on the middle east for oil. And the shocking event that had when oil prices quadrupled. The inflationary effects and in 1981, we saw 18. 6 it was devastating. So Many Americans, including folks working hard very speaking of political motivated, my distinguished colleague here from north dakota, sitting next to me, we watched this president , with one stroke of a pan, stop the pipeline, which reduces Carbon Emissions. It is the most environmentally sound, carbon minimal amount of Carbon Emissions to transfer oil, versus using rail cars or trucks. We are skeptics that there is not going to be political motivation and i hope that you will guard the fed and i hope you will stick with their mandates. I asked this question to chairman powell this week. I would like to ask if you as well. Do you think that rolling blackouts and i just come from my hearing before i came to this hearing, where we literally had folks talking about breaching dams in this country. These are radical ideas. Do you think that rolling blackouts, due to a lack of stable, baseline power, poses an intangible near term threat to the stability of the Financial System. We try to take into account a whole host of different risks to the system, so we are trying always to kind of look out over the horizon and take into account a host of risks, including from abroad. We do try to do that. We are not very successful always, but we certainly try. Yeah, well, thank you. And my final comment here. On one hand, we have colleagues who are sending the strongest message possible that we could stop the production of natural gas, coal, even breaching dams in some cases here. We cant have it both ways. Is this an Energy Crisis that is why this car spinning out of control right now on the highway. And the fed has its role. But im just very concerned about the policies from this administration that are having severe harms for the American People. And we are seeing that at the gas pump and with inflation in this country. Thank you, mister chairman. Thank you to our nominees. What tools would you have at your disposal whats tools might congress be able to strengthen or offer to the agency to increase the supply of housing in communities where there is an accused housing shortage . Do you agree that increasing supply, adding units, adding density, is key to resolving the crisis of Affordable Housing . And, when i look around the state of georgia, speaking with Community Leaders, looking at the housing market, 48 of folks in the city of augusta say that Affordable Housing is a very high need. Georgia has lost 11,000 Affordable Housing units in atlanta, in rome, in savannah, in albany, in rural communities, the rents and the prices of homes are increasing at an alarming rate. So the question is, what rules will you have the agency to increase housing supply . Do you believe increasing housing supply is essential and, finally, will you work with me and Community Leaders in both to identify solutions particular to the needs of my state to help housing supply great question, senator. Absolutely. Supply is a major, major issue in housing. And the supply issue really is exacerbated with respect to Affordable Housing. We certainly are we dont have any direct influence on supply, but one of the things that we have done is Affordable Housing program, they are able to contribute to affordable projects around the country. And we have also increased the enterprises allotment for a low Income Housing tax credit. And we increased their allotment to help with the Affordable Housing supply and Affordable Housing preservation. We are really focused on working with our regulated energy is to do whatever we can in this space. We also have allowed to purchase manufactured housing. And we also have asked these accessory dwelling units. And many cases, there are local zoning ordinances that get in the way of some of the Affordable Housing that could be built. We are very much committed to working with you and all members of this congress to try to do what we can to address this issue. Thank you, miss thompson, and my time is limited, but just briefly, i mentioned atlanta, albany, savannah this is a serious issue and communities across the state. Will you commit with working with my office to identify specific solutions more collaboratively to bring down the cost of housing, to bring down rents in these communities . Absolutely, senator. Thank, you miss thompson. Doctor braynard, congratulations on your nomination. I would like to ask you about Retail Investing and stop trading i want to commend chairman brown for his leadership on this legislation to address this. Is there a cultural problem . If theyre widespread stock trading, potentially, on the basis of the expectation of coming policy announcements at any level in the Federal Reserve, in your opinion . I dont believe there is. But i think we have all been surprised and dismayed by some of the financial disclosures. Doctor braynard, will you help to ensure that lawful requests or commands pertaining to stop trading should congress wish to review those . Yes. Thank you. And a policy question for you, what is your view on district yoshino over the long run, the relative benefit to unemployment against the exacerbation by driving up asset prices in a way that may favor those who hold equities and assets on homes have you conducted any research . Has the fed pretty i know there is some research along this. It is not clear cut. It tends to be the case that during recessions, work inequality diminishes and it tends to increase during recoveries. We use quantitative using only when we have run out of room on the Interest Rate and the alternative of allowing to skyrocket would be very, very bad for working americans who really rely primarily on their jobs for income. We stay very focused on that dual mandate and try to protect employment and downturns to the greatest extent possible, using whatever tools we have. Thank you. I will send you some additional questions for the record congratulations again to you both for your nominations. Closing questions, remarks, as do i thank, you mister chairman. I first want to respond to our colleague from massachusetts who seems to be in that inflation is the result of Greedy Companies in highly concentrated industries. In fact, i dont think the data supports that. I dont think that is well correlated. That is to say, that the rate of inflation and the extent to which an industry is consolidated. And in fact, one that i can think of that might be among the least concentrated industries that i know of, the retail sale of used cars, it is one that has experienced among the highest rates of inflation. 37 over the last year. I also want to respond to governor bernards statement that is not a stress test. It seems to me, that is a little more than a summed man tick difference. The whole point is to test, whether banks are prepared to address perceived risks associated with Climate Change and if the fed determines they are not, to that sounds exactly like stress testing, whether or not you qualify different aim. And i am not alone in that view. The New York Times, not exactly a conservative paper, said the same thing. When it reported on a speech that dr. Braynard gave last october on climate Scenario Analysis the times wrote, and i quote, as brainard that, the fed was which are often called, stressed tasks, and quote. And the concern is, there are many categories of risks to any Financial System that nobody is advocating for a separate Scenario Analysis. But there is an advocacy for the Scenario Analysis for even lower risk, problems in the climate. The fact is, the transition risk associated with Climate Change is political. And the danger, is it becomes a self sufficient fulfilling process see. Finally, let me just turn to miss thompson. You and i may have a different understanding of and other statues because it is my view that clearly does authorize the f h f a to take the gses out of conservatorship. So, can you tell me specifically, is there something that is lacking in legislation that you think is required for you to move in that direction . Sure. Thank you for the question, senator. It is my belief that the enterprise actually, fhfa well have to have a conversation with treasury. Its something that congress would have to legislate. So, if the enterprises reach their Capital Requirements that we have established we will be having conversations with different stakeholders. If Congress Wants the enterprises to come out as is, then that is within the statue. But if there is another outcome, if they want there to be utility with other charters sure. If we wanted to change the existing statutes and charters, then we would have to pass legislation. But my point is, that is not the only option available. Would you commit to going as far as you legally can in moving in the direction of coming out of the conservatorship . Senator, that is a great question. And i will commit to positioning the enterprises and working with the congress to do whatever is necessary to move them out of conservatorship and we will certainly be wanting to work with congress and other stakeholders on this issue. I appreciate that and i look forward to working with you. Thank you, mister chairman. Thank, you senator toomey. A few closing comments. Thank you both, by the way, for being here. Something where i hope we can reach consensus in this committee. Many of my colleagues have talked about the importance of that, of Housing Finance reform before the pandemic, as you know, consensus was a merging on what the system should look like. I would like to point out a list of priorities that i think we can Reach Agreement on. And there will be some differences of degree im sure between some, between and among all of us. Protecting access to affordable 30 year fixed rate mortgages, providing catastrophic government guarantees, structuring loan guarantees like public utilities, providing a regulated rate of return, serving a Broad National market, serving lenders of all types and sizes equitably, maintaining a duty to serve all markets, all borrowers, maintaining Affordable Housing goals and metrics, expanding investments and Affordable Housing, and maintaining the gses successful multi Family Business models and ensuring continued or better access to financing of affordable rental housing. All of these reforms would meet the needs of renters and homeowners across the country. I am certainly happy to engage with a Ranking Member and and getting, as we spoke on the phone, getting the kind of Technical Assistance that you are so good at to provide to. Us i would also today, on climate stress tests and Climate Trust scenarios thank you. It was a full and productive discussion. I think the Biden Administration for the nomination of these two eminently qualified women to i look forward to supporting the nominations of both of you. Four senators who wish to submit questions, these questions are due on tuesday, the 18th of january. The nominations will thank you for your testimony. The committee is adjourned. College students who worry about food often see their grades take a hit. It can take them longer to graduate and Food Insecurity texas toll on even before the pandemic, College Students faced Food Insecurity at above average rates. Now, pandemic related campus shutdowns have caused the rate of hunger to nearly double in some states. In january, certain student restrictions to snap eligibility such as being enrolled more than half time, we