I know youre loathe to lay into fiscal policy but given forecast for Unemployment Rates, do you think its important that congress extend the extra unemployment benefits. I think were trying to keep our comments on fiscal policy at a high level ill come to your specific question let me just say this, this is the biggest economic shock in the u. S. And in the world really in living memory we went from the lowest level of unemployment in 50 years to the highest level in close to 90 years and we did it in two months extraordinary. Appropriately the response there fiscal authorities has been large, forceful, and very quick by the standards of these things roughly 3 trillion congress has authorized, and thats benefiting households, laid off workers, small and medium businesses, hospitals, state and local governments, 14 of gdp, its in a class by itself in terms of both the size and the speed of it. Its also pretty innovative. Both the ppp and Unemployment Insurance are quite innovative in the american context. There were difficulties in implementing them but thats really a function of their novelty, i think this program by the way, the fed also, we both innovated and acted forcefully, progressively, proactively and aggressively as well you put those together, all of that is making a difference now. You look at the income data, expanded unemployment and stimulus checks have gone a long way to replacing lost income from job loss. Youre seeing it in the job data many given ppp credit on that front and keeping Small Businesses going its so far its a good response and having a good effect the question is, its big. Everyone can see that its big is it going to be big enough thais the question the question for the question that ive been concerned about really is this issue of longer run damage to the economy. Were doing a fair job of getting through these first few months more than a fair job the question is that group of people who wont be able to go back to work uickly, what abou them that could be many millions of people, in parts of the economy that will be slow ones to recover. We want those people back in the labor force, we want them getting jobs they are going to need possibly probably will need further support. I will say, this its possible well need to do more and its possible congress will need to do more. In terms of 600 Unemployment Insurance, i wouldnt try to give congress advice on the specifics of that. I know they are looking at i know from both talking to people and reading the papers that they are looking at a whole bunch of different possible approaches Going Forward and some of those seem kind of promising so were happy to give advice if people ask for it but probably not public ly. Thank you chair powell, im going to pick up on what scott asked you. You have been studious in threading the needle in interviews and speeches and colloquy thats followed not giving advice to congress but indicating theres likely to be a need for more fiscal stimulus for additional policy in the future, so im going to try a hypothetical here, and you can rebuff it if you want. If you were to find yourself in a Senators Office suite, he held up that unemployment report, which youve described as unexpectedly positive and a welcome surprise, and he or she said how this is an indication we can put on the brakes, i wonder what you would say. Your message, impressive as it is, how much urgency and dealing with this and weve seen that from the Federal Reserve, i wonder if you worry that sense of urgency isnt being matched panned what the consequences might be there is a fear the fed could be seen as we look through the unemployment and summer and more to wait and see what happens in subsequent reports a second question. Youve talked about your fear of a second wave of this disease. Theres a difficulty with definition youve talked about weathering this crisis and getting through this storm it seems to me as i listen to chatter from the white house, epidemiologists, there is an agreement on what getting through this means you have an administration inclined to if not direct be content this opening up states economies too early. How problematic is that not having an agreement on how to treat the virus. I will provide a little context. I want to be clear about the picture. One way to look at the picture if you look at the widest measure of unemployment, labor market slack, if you will, is the u 6 measure. The one we talk about all the time is u3 by economists the one that has a much broader measurement of slack in the economy is u 6 the u 6 level tripled from 27 thats 2 Million People who lost work in the economy, either going to part time thats in the low 20s. Thats post may unemployment report you can look at it a different way, look at the regular Unemployment Rate. Take the 21 people who list as unemployment now and add more on for the ones miscoded. Take those people who are suddenly out of the labor force. You put those together and that has gone up by about 24 million. Those are two different measures of what happened so the question is 22, 24 Million People got to get them back to work somehow weve got to get those people back to work. They didnt do anything wrong. This is a Natural Disaster i do think the responses so far have been great. Thats the way i would think about it i would just in terms of the may employment report, its so nice to see i think what people were thinking, youd start to get back to work kind of numbers in june, july, and august very few people saw them in may. Almost no one saw that happening as early as mid may but it did we dont know what that is, whether its a timing change well have to wait and see its clear evidence of how things are and how humble about our ability to have confident predictions as opposed to just predictions. Bottom line, i would just say the key thing people need to understand is theres a lot of work to do in the labor market were going to stick with this and support that until the work is done. That is something were going to do as well it may require congress to help but thats going to be their decision. You also asked about the second wave. We have major responsibilities and powerful tools, but the decision about when to reopen the economy is one for elected officials at the state and local and federal level. We dont have coronavirus experts, its kind of selfevident, i think, that if it happens, you know, the issue would be, first of all, Peoples Health but secondly, you could see a public loss of confidence in parts of the economy already slow to recover. It could hurt the recovery even if you dont have National Level pandemic, just a series of local on ones, in traveling, restaurants, entertainment. Anything that involves getting people together in small groups and feeding them and flying them around those things would be hurt it would not be a positive development and ill leave it at that thank you, edward lawrence. Thank you, chairman powell, for the question in may we saw at least 5 companies file for bankruptcy. Do you think its too late, first of all second of all, the future of these facilities, is this a oneyear impact to the economy to these facilities or multiple year if so, how many years. We have significant interest, we think also, remember, lots and lots of companies are getting financed, too. Banks are lending, markets are open you have a much better lending climate than certainly we had in february and march we dont think its too late, though we do expect it to be quite soon in terms of timing, well leave them open for new loans as long as we need to. That will be a decision we make, of course, with colleagues at the Treasury Department. At certain point there wont be a need for further loans and the assets will be there i dont know if thats part of your question, too i would say at that point the useful role of the Federal Reserve is close to an end at that point we dont have expertise managing pools of credit assets, loans, if you will, or bonds. We dont want to be made we dont want to be part of the decisions to manage such a portfolio. Wed be looking to have that done either someplace else or by a third party or the Treasury Department were working on ideas for that. Our real focus is on getting these facilities going and getting them to do the job they need to do thank you reuters. Thank you so i have two quick questions. One, if we have hit bottom the economy. The second is regarding the way that the pandemic has exacerbated racial inequality, i wanted to ask to what extent do you think you can factor in those disparities. I would say many forecasters have been expecting a bottom for the economy around the middle of the year with ahuge range of uncertain uncertainty. I think the labor market the evidence of one jobs report, the Labor Department may have hit bottom in may. We dont know that were going to see many forecasters widely expect a recovery over the second half of the year so it is possible. Were in the going to overreact. Were going to be very careful reaching any conclusions about good data or bad data. Were going to be here with tools supporting the economy as long as its needed. I think theres a possibility the bottom is coming to the Labor Department we dont know that well know more Going Forward. In terms of the effect of the pandemic on equality the pandemic, of course, hits everybody. But in economic accepts it hits those industries that involve groups of people in tight groups, either in places where its travel, leisure, restaurant, bars, those kinds of Service Economy jobs a lot of lost jobs are people in the service area, relative to other jobs, relatively low wages. If you just look at what that is, unemployment has gone up more for hispanics, more for africanamericans and women have born an extraordinary, notable share of the burden beyond their percentage in the workforce. Thats really, really unfortunate because if you go back two months where we were, we had effectively first tight labor market in a quarter centu century. For the last couple of years before the pandemic hit you were seeing wages go up at the most at the lower end of the wage spectrum, and that was great we were meeting with people from low and moderate income communities all over the country and saying dont change this do whatever you can, keep this going. This is the best labor market weve seen we had every expectation, every reason to expect this would continue, then this comes. So its hard breaking. We want to get it back i think we learned a number of things over the course of the last few years one of them is you can have 3, 3 1 2 unemployment for a couple years and you see modest moves in wages and relatively almost invisible moves in inflation that was not anybodys understanding of the structure of the economy we can use our tools to support the labor market and support the economy. We can use them until we do fully recover and thats what were planning to do we dont target different groups were cognizant of the fact that late in the last cycle, late in the last expansion, the benefits really do go more to people at the lower end of the spectrum, for the first time in many years, when labor markets are tight, when unemployment is low, so we would really like to get back to that place victoria from politico. Hi. Victoria guido with politico i wanted to follow up with a couple of things that have already been asked first of all on fiscal policy, you all put our summary of Economic Projections im curious to what expenditure future fiscal policies is factored in or not factored into those projections and how more or less fiscal policies might affect those projections my other question is on main street, youve mentioned that the fed and treasurer are willing to expand the program further. My question is, whats the threshold for those types of changes. Is it just making sure borrowers who want to borrow through the program are able to do that. In terms of the way we do forecasts is we dont we dont tend to incorporate things were highly uncertain about i think the forecast would not have included substantial additional big fiscal support for the economy. Maybe a modest amount. Something that looks like a low end guess on what might come out of the current negotiations. Thats basically what would be in the baseline. Of course, if there were more fiscal support you would see it sooner thats a question for congress were spending a lot in terms of main street and our willingness to expand it further, i think one thing were looking at, very strongly looking at, is nonprofits and is there a way to incorporate them into that facility or a similar facility thats another dimension you know, if we had a great idea for changing main street we would have done it weve done things very positive here as we learned more, it could be in terms of size it could be in terms of lots of Different Things i think we have a good product to go to market with now i think it will get out there soon you know, well see, and well be willing to continue to adapt. Thank you the vast majority laid off are expected to be recalled by their employers. At this point, what is your expectation of how much of these job losses will be permanent a reliable estimate of that, clearly not everyone will go back i would say many will go back. But whats the remainder when we reach the new normal is uncertain. It could be a number of people in many estimates. Id say youre so early in the process, people are for example, people are going back and looking at other significant changes in the economy, and they have seep how many people go back when, for example, theres technological change you may have seen some of this research you come up with an estimate its just going to be very hard to say my assumption is that there will be a significant chunk, well into the millions. I dont want to give you a number because its going to be a guess, but well, well into the millions of people who dont get to go back to their old job, and, in fact, there may not be a job in that industry for them for some time. There will eventually be, but it could be some years before we get back to those people finding jobs if they lose a job, if they can find a be jo in their own industry, thats the fastest way. They know other people in the industry, different kinds of jobs thats the fastest if you have to go to a different industry and start over again, its much harder thats when you start to lose people who just fall out of the labor force. You know, its very tough on their lives. We all know people to whom that happened in the Global Financial crisis hence, our desire to do what we can to support this and support this recovery with the tools that we have i want to go back to the issue of inequality. Im wondering what more could the fed do for equality in the country. I know you said you dont target certain groups is there a way you could use black Unemployment Rate as some kind of a benchmark as something you want to meet or something to keep track of. We track unemployment by all kinds, as you know, all kinds of different demographics, particularly africanamerican Unemployment Rate, which reached an alltime low in the modern era. Its close to twice the Unemployment Rate, or it was its certainly much higher now you know, the best thing we can do with our Monetary Policy tools is to look at the evidence we saw with our own eyes recently the economy can have very low unemployment, very low unemployment it could have been lower than we were it could be lower than 3 1 2 , without seeing financial imbalances, without seeing inflation getting out of control. We frankly didnt get inflation back up to target. Without seeing wages getting out of touch with where they should be thats the biggest thing we can do inequality is thing thats been with us increasingly for more than four decades. Its not really related to Monetary Policy. More related to theories that cause it its something that more or less has been going up consistently for more than four decades theres a lot of theories. One is globalization Technology Call for rising levels of skills and aptitudes and education, and u. S. Educational attainment flattened out relative to our peers over that period that means if youre on the right side of those trends, then those things are good for you. If not, wages will stagnate. Wages at the bottom havent gone up for a long time wages at the top compensation any way you cut it, before taxes, after taxes, wages compensation has gone up a whole lot for people at the top and really happened gone up for people at the bottom if you look more in the middle, it has gone up for most other groups but at the bottom not so much in real terms we call it out as an important factor in the economy and we use our tools to support maximum employment and take that definition to heart. Obviously thats something that requires all of society, all of government response. Thank you for the last question well go to michael mckee, bloomberg television. Michael, bloomberg tv and radio. I came across a statistic, since your emergency announcement, every single stock in the s p 500 has delivered a positive return im wondering even the levels of the market right now, whether you or your colleagues feel there is a possible bubble that could pop and set back the recovery significantly or we might see capital misallocation that will leave us worse off when this is over. Second inequality is not just about wages but also about wealth a number of studies suggested keeping rates so long and targeting markets after the financial crisis that the fed did contribute to wealth inequality in the country. Im wondering if you think theres some tweak or some message you could give that would affect this. What weve targeted is broader financial conditions if you go back to the end of february and early march, you had basically the World Markets realized just about the same time i remember that monday, that there was going to be a Global Pandemic and the possibility it woul