>> on a schedule announced in december, bringing them to early march. as they who will explain, a backdrop in the labor market, our policy has been adapting to an evolving market. it will continue to do so. economic activity expanded at a robust pace, reflecting vaccinations and the reopening of the economy. fiscal and monetary policies and the healthy financial position of households and businesses. the economy has shown great strength and resilience in the face of the pandemic. the omicron variant will surely weigh on the economy. activity more broadly may also be affected as many workers are unable to report for work because of illness, quarantines or caregiver needs. fortunately, health experts are finding the omicron variant has not been as severe as previous strains. if the wave passes clearly, the economic effects should as well. and we will see a return to strong growth. the applications for the economy remain uncertain and we have not lost sight that for many inflicted individuals and families and for health-care workers on the front line, the virus continues to cause great hardship. the labor market has made remarkable progress and by many measures is very strong. job -- have been solid over the past three months. over the past year, payroll employment has risen i $.4 million. the unemployment rate has declined sharply falling two percentage points over the last six months to reach 3.9% in december. the improvement in labor market conditions has been widespread, including floor workers at the labor distribution as well as african-americans and hispanics. labor remains historically strong. with consent to our labor -- job openings, and rising at their fastest pace in many years. while labor force participation has edged up, -- in addition, some would report they are out of labor work because of factors related to the pandemic. including care needs and ongoing concerns about the virus. the current wave of the virus may prolong these effects. over time there are reasons to expect some for improvement in participation and employment. inflation remains well above our long goal of 2%. supply and demand balances and the reopening of the economy have continued to contribute to elevating levels. -- are limiting how quickly they can respond a return. these problems have been larger and longer lasting than anticipated. exacerbated by waves of the virus. one of the drivers of higher inflation have been from -- predominantly affected. price increases have now spread to a broader increase. wages have risen briskly and we are attentive to the risks that persisted real wage growth. putting upward pressure on inflation. like most forecasters, we continue to expect inflation to decline over the course of the year. we understand that high inflation which imposes significant hardship, especially on those least able to meet the cost of essentials like housing, food, and transportation. we believe the best thing we can do to continue to support labor is expansion. that will require prices to go up. we are committed to our goals. we will use our commitment to support a high labor market. we will be watching carefully to see whether the country is falling in line with expectations. the fed's monetary policy actions mandate action with employment and stabilize for the american people. as i noted, the committee left the target for the federal funds rate unchanged and reaffirmed to end early asset purchases in march. in light of the remarkable purchase -- progress we have seen in the labor market, the economy no longer needs sustained high levels of mount -- monetary policy support. we are phasing out asset purchases and we expect it will soon be appropriate to raise the target range for the federal funds rate. the economic outlook remains highly uncertain. making appropriate monetary policy in this environment requires humility, recognizing the economy evolves and it will need to be nimble so we can respond to the full range of --. high inflation is more persistent than expected. to provide greater clarity, we are reducing the size of the balance sheet. a set of principles will decide a foundation. these high-level principles clarify that the federal funds rate is our primary means of adjusting monetary policy and reducing our balance sheet will occur after the process of raising interest rates has begun. reductions will occur over time in a predictable manner, primarily through adjustments to reinvestments. so that securities role all of our balance sheet. over time, we intend -- we intend to hold -- for the operating framework. we envision primary security -- in that regard we will be prepared to adjust any other details to our balance sheet management in light of economic developments. the committee has not not make decisions about specific timing and pace to shrinking the balance sheet. we will discuss this in upcoming meetings and provide additional information at the appropriate time. to conclude, we understand our actions affect communities, families and businesses across the country. everything we do is in service to our public mission. we had the federal reserve will do everything we can to achieve our maximum employment and security goals. thank you. i look forward to your questions. >> thank you. the first question will go to chris --. >> thanks michelle and thank you chair powell. it is expected that the fed will hike rates every other meeting, but in the past, the fed has hike. every meeting. i want to ask are there rate hikes at the executive meeting on the table. is it a live meeting and on that note, will the fed consider front loading of its rate hikes, even if it does not raise every meeting? >> as i referred to in my opening statement, it is not possible to predict with much confidence exactly what half of our policy rate is going to prove appropriate. at this time, we have not made any decisions about the past policy -- two-sided risks now. we are going to be guided by the data. we are going to be led by the incoming data and the evolving outlook. we will try to communicate as clearly as possible, moving steadily and transparently. more to your question, we know the economy is in a very different place than it was when we began raising rates in 2015. specifically, the economy is now much stronger, the labor market is far stronger, the inflation rate is running 2% above target. these differences are likely to have important implications for the appropriate pace of adjustments. beyond that, we have not made any decisions. >> thank you. let's go to victoria. >> chair powell, you were talking about the health of the labor market. i am curious if you would characterize where we are right now as maximum employment? and along the same lines, rate hikes on the table this year, do you think the fed can raise rates, bring inflation under control without hurting jobs and wages? >> i would say, both sides of the mandate are causing us to move steadily away from the policies we put in place during the challenging economic conditions the economy faced earlier in the pandemic. we will see participants agree that labor market participation are consistent with maximum employment, with maximum employment for stability. that is my personal view. very broad support on the committee for the judgment that it will be appropriate to raise the target range for the federal funds rate. the level of maximum employment that is consistent, may increase. we hope that it will as people come back into the labor market. in the policy path we are brought economically, it would be supportive of the outcome as well. the thing about the labor market right now is there are many millions of more job openings and there are unemployed people. you ask whether we can raise rates and move to a less conditions without hurting the labor rate, i think there is room to raise interest rates without threatening the labor market. this is a historically tight labor market. record levels of job openings, quits, wages are moving up at the highest they have in decades. if you look at surveys of workers, they find jobs. if you look at companies, they find jobs scares. we have not seen this in a lot of cases ever. this is a strong labor market. my strong sense is we can move rates up without having to severely underline it. i will point out, there are other forces at work that will help bring down inflation. we hope improving on the supply side, which will ultimately come. the timing and pace of that. fiscal policy is going to be less supportive of growth this year. not at the level of economic activity but the fiscal impulse to growth. there are multiple forces which should be working over the course of the year for inflation to come down. we realize the timing and pace of that are highly uncertain and inflation has persisted longer than we thought. we are prepared to use our tools to ensure higher inflation does not become entrenched. >> thank you. let's go to tim rose at the wall street journal. >> good afternoon chair powell. i have a couple of questions on the balance sheet. the statements on the balance sheet today called for significantly reducing your holdings. what does that mean? and apart from moving sooner and faster to shrink the holdings, are there any other ways in which you or your colleagues are seriously thinking about recalibrating this process? and finally, how much disagreement is there around how you should use this tool, including active sales rather than passive sales, changes in the composition of reinvestments? >> thank you. i am afraid to tell you those are all great questions and they are questions the committee is just turning to now. we had a discussion at the last meeting, an introductory. we are going through and carefully putting together a set of principles at a high level and those are meant to guide the decisions about all of the questions you're asking. i expect this process will be something we spent time on incoming meetings. i cannot tell you how long it will take. at the appropriate time, we will provide additional information. the last cycle when we went through balance sheet issues, we did find over the course of two or three meetings, we did come to interesting and better answers. we are just in that process now, at the next meeting we will be turning to more of the details you are asking about. the balance sheet is much bigger. it does not show duration from the last time. the economy is much stronger, -- being able to move sooner than we did the last time. sometimes faster. beyond that, it is not appropriate for me to speculate exactly what they would be. principle number one, the committee views change the target rate for the federal funds rate as its primary means of adjusting the stamps of monetary policy. we want the federal funds rate -- we wanted to be climbing at a predictable manner. >> if i could follow on that, raising rates will both strain the economy, tied to monetary policy. how should we think about the relationship between the two? how much passive drawn off -- increase in your benchmark rate? >> we think of the balance sheet as moving in a predictable manner. it is not both of them, it is a federal funds rate i think we have a much better sense of how rate increases affect monetary conditions. balance sheet is still a relatively new thing for the markets and for us. we are less certain about that. a timing and pace and composition and all those things. it will start in the background and we will look to have that running in the background and have the interest rates be the active tool of monetary policy. that is the plan. i cannot tell you much more about any of the very good issues about size, pace, composition. we will be turning to all of those incoming meetings. >> thank you. >> now we will go to neil irvin. >> thank you. glad to be back. i was wondering if the volunteer rating for financial markets in the last few weeks stress anything alarming or might predict the trajectory. might that be desirable in some ways in achieving your tightening goal? >> the ultimate focus we have is on the real economy. financial conditions matter to the extent they have implications for a dual mandate. you know we look at broader financial conditions, not one or two markets. we are always asking ourselves, are we seeing changes with persistent and material for training conditions that are inconsistent with achieving our goal? that is how we are looking at that. we do not want to focus broadly. that is how we are thinking. in terms of what we have seen. we said at our last meeting, the projection of meetings and rate increases, it is six weeks, seven weeks later. you have seen the communication channel with the market. no more rate increases. surveys show that market participation are expecting a balance sheet runoff at the appropriate time, sometime later this year perhaps. we have not made a decision yet. we feel like the communications we have with market participations and the public are not working. long-term policy works through expectation. that in and of itself is appropriate. >> thank you. let's go to howard snyder. >> for a year now, the statements reference the benchmark for this interest rate increase, now that we are approaching that moment, what are the benchmarks going to be? i know you cannot stipulate the past but how should we think about the next step? >> we haven't gotten to that point. we haven't made a decision yet. we will make a decision at the march meeting. we will make a decision whether to raise the funds rate. i would say the committee has a mind to raise the federal funds rate at the march meeting. assuming that conditions are appropriate for doing so. we have our eyes on the risks, particularly around the world. we expect some softening in the economy from omicron but we think that will temporary. we think the economy should show through rather quickly after that. >> if i can follow. the copacetic circumvent is where inflation comes down without the federal funds ever getting over the estimate of mutual, given development, that is incredible merit for --. >> high inflation we are seeing does not become entrenched. the number of factors, it is not just a monetary policy. the number of factors supporting of the client and inflation. fiscal policy will be significantly less of an impact to growth. we do expect now that it will come slower than we had expected and hoped. there will be relief on supply. that should lower the supply sectors. monetary will be significantly less accommodating. are things turning out as we expect? there is a case where, for whatever reason, it slows more. if it slows at a higher level or more persistent level, we will react to that. this is a different economy that existed during the last. >> thank you. let's go to gina snelling. let's go to gina. let's go to steve lee's men. >> thank you mr. chairman. one technical question and one question on principle. the technical question, if you discuss balance sheets at the next meetings but you won't begin balance sheets until after rate hikes, it seems that you will not or cannot begin balance sheets until the summer. is that correct? second, you suggested with balance sheets running in the background, you will possibly be raising rates and bringing up the balance sheet at the same time. the principal question i have, you said it is going to be running in the background. but the statement on the balance sheet principle says the community is able to adjust -- or it won't be running in the background. >> let me start by talking about that last paragraph. you remember during the last cycle that this process is inevitably surprising. during the years of the prior cycle, we didn't intend to do that. that has required us to do so. we have a pretty robust paragraph that says we are free to do this at any time. it does not mean we are going to but if the situation turned out to be different than we had thought, we are not going to stick with something that is not working out. that seems to be a general statement rather than a hint. i like to think that our philosophy of the balance sheet is divided in these principles. the idea, for example the federal funds -- determine the timing and pace of the balance sheet to the function of a dual mandate after we begin the process of raising rates. those are all the things that try to describe how we will proceed. it may be a higher level to try asset purchases were enormously important at the beginning of recovery in terms of market function. then after they were a macro economic -- now the economy no longer needs this highly accommodative policy we put in place. it is time to stop asset purchases at the frederick time, start to shrink the balance sheet. the balance sheet is substantially larger. in amounts needed to increase -- in the reserves regime. there is substantial amount of shrinkage in the balance sheet to be done. that is going to take some time. we want that process to be orderly. and predictable. those are some of the ways i think this lays out the way we are thinking about this. in terms of timing, i cannot really help you. after we get underway i would say we are going to have another discussion at the next meeting. at least one other discussion at the meeting after that. we will tell you as we make progress and we will start the process of shrinking the balance sheet, what we find to be the appropriate time. i wish i could do more. we have made those decisions -- we have not made those decisions and have not had the important discussions on a lot of the details in the coming days. >> thank you. let's go to craig torres. >> chair powell, good afternoon. craig torres from bloomberg. you said risks are one-sided. can you elaborate on what are the risks to a soft landing. what are the risks? and then, second, chair powell, i have an administrative question. robert kaplan's disclosure of the securities transactions, in a couple of months, chair powell, or maybe sooner, you and i will file our tax returns and we will list transactions and all kinds of things. those transactions we will put dates. bloomberg asked for the dates of mr. caplan's chair powell: you asked about risk first. one is that inflation risks are still to the upside in the views of most participants and certainly in my view as well. there is a risk that the high inflation we are seeing will be prolonged. there is a risk it will move higher. we do not think that is the best case but you asked what the risks are. we have to be in a position with our monetary policy to address all plausible outcomes. that calls for us to be in a position. we have an expectation about the way the economy will be involved that we have to be in a position to address different outcomes including the one where inflation remains higher. of course, that is a risk to the expansion. you know, we have been saying that what we need here is another long expansion. that is a kind of thing we saw over the last record long expansion. we saw labor force were to summation rise. we saw wages -- labor force participation rise. we saw wages higher for people at the lower end. there was no imbalance under the economy that threatened that expansion. it could have gone on for years were not hit -- were it not hit by the pandemic. we will try to get back to that. that will require price extension and the fed to tighten instrument -- interest rates. i mentioned two sided risk. a couple things. one, covid is not over. covid can continue to evolve. we just have to accept it is not over and the risks to it can slowdown growth and that is a downside risk form -- from a growth standpoint. another risk is just further problems in the supply chains that could slow down activity. you see the situation in china where there are no covid policy -- their no covid policy may cause more lockdown -- lockdowns and play into more problems in supply chains. in addition there is what is going on in your turn -- eastern europe. so there is risk out there and we cannot forget risks on both sides. so that is what i would say. i know you have been all over the issue with my colleagues on the issue of information. we do not have that information at the board. you know, i ask the inspector general to do an investigation and that is out of my hands. i am playing no role in it. i seek to play no role in it i cannot help you here today on this issue. i'm sorry. i can't. >> ok. >> thank you, we go to dena now. >> thank you, chair powell. i was wondering if you could tell us a little bit about where your thinking on inflation stands today. the last time we saw an sep in september we saw you and your colleagues were projecting inflation would be back down close to target by the end of the year. i am wondering if you still think that projection from december is reasonable. or if you think it has changed at all. i also wonder if you could talk about the pathway to that celebration from 7% to where you expect to be at the end of the year. chair powell: since december i would say that the inflation situation is about the same. probably, slightly worse. i would be inclined to rise -- raise my own estimate of 2022 core pc inflation -- pce inflation by a few thenths --tenths today. what it has not gotten better. it is probably gotten a bit worse and that has been the pattern. i think if you look at the fomc participants, there is a range there. that range has been moving right for a year now. by the way, you look at other forecasters, essentially, all other micro -- macro forecasters who do this for a living you see the same pattern. what do we think about that? we wrote down rate increases in the december meetings, each of us individually and i think to the extent the situation deteriorates further our policy will have to address that. if it deteriorates meaningfully further either in the time dimension or the size of the inflation dimension. so that is how we are thinking about it. i think part of this will be the fed moving away from a very highly accommodative policy to a substantially less accommodative policy in overtime to a policy that is not accommodative. i do not know when that will be. that is part of it. another part of it is the fiscal policy provided it an impulse to gross over the last two years. that impulse will -- to growth over the last two years. that impulse will be negative this year. we will eventually get relief on the supply side. the ports will be cleared up and there will be semiconductor then things. -- and thanks. we are learning it is just taking much longer than expected. that, i think, does raise the risk that high inflation will be more persistent. i do think that we will come off of the hives we saw in the early part of the episode -- the highs we saw in the early part of the episode in the spring last year. the question will be, what is inflation running at? we will be watching that. our inflation is to get inflation back down to 2% and provide enough support to keep the labor market healthy. the labor market is very strong now. i think the strength will continue. there is really a shortage of workers. we see it particularly among production and nonsupervisory workers. you see very large wage increases. i mentioned some other indicators. so, that is what we are looking at. we realize, i think as everyone does, that this outlook is quite uncertain and we are going to have to adapt and communicate as clearly as we can. but, we have to be adaptable and , you know, move as appropriate. >> thank you. let's go to colby smith. >> thank you, michelle. chair powell, when you talk about the past four for monetary policy does that also include the possibility of raising interest rates by a larger increment? if inflation does not moderate sufficiently? should we interpret this approach as eta partner from the gradual pace we saw during the last cycle? chair powell: as i mentioned, we have not made these decisions. we really have not. what i can tell you now is that we fully appreciate that this is a different situation. if you look back to where were we -- where we were in when he 1620 17, 2018 unemployment was not at our estimate and growth was in the 2% to 3% range. right now we have inflation running substantially above 2%. more persistently than we would like we have growth even in the somewhat reduced forecast for 2022, we still see growth higher than substantially higher than what we estimate to be the potential growth rate. we see a labor market where by so many measures it is historic. i think in a way the least tight aspect of it is looking at the unemployment rate that is still below our median estimate of maximum employment. if you look at job openings and wages you are seeing in just to the ratio of job openings to unemployed a very, very tight labor market. now, we also know that labor force participation is significantly lower, 1.5 percent lower than in february of 2020. maybe a percentage point of that is retirements. some part of those retirements are, you know, related to covid rather than just regular. so i think there is a pool of people out there that could come back into the labor force but it is not happening very quickly and it may continue to not happen very quickly as long as the pandemic is on. so, that is how we think about that. we have not made a comment here. -- specific questions, we have not begun to address those questions and will begin to address them as we move into the march meetings and meetings after that. let's go to rachel. >> thank you, michelle, and thank you chair powell for taking your questions. i am wondering if you can talk to us about any metrics the fed uses to assess how inflation affects different groups of americans especially lower income earners. are you worried that the fed underestimates or cannot effectively measure the impact of inflation on some of the most vulnerable households? chair powell: it is more of a matter of the problem we are talking about here, really that people are on fixed incomes living paycheck-to-paycheck. they are spending most or all of their what they are earning on food, gasoline, rent, heating, things like that, basic necessities. and so inflation right away, right away, forces people like that to make very difficult decisions. that is really the point. i am not aware of inflation literally falling more on different socioeconomic groups. that is on the point. the point is some people are really in -- prone to suffer more. for people who are economically well-off inflation is not good. it is bad. high inflation is at. but, they will be able to continue to eat and heat their homes and drive their cars and things. so, that is how i can give it. -- think of it. to control inflation for the benefit of all americans, part of it is that it is particularly hard with people with fixed incomes and low income to spend most of their income on necessities which are experiencing high inflation now. >> thank you. let's go to edward lawrence. >> thank you michelle and mr. chairman. year-over-year, inflation is at a four year high. the price index for all of 2021 was the highest on record. some investors fear the fed might be moving too late. decisions were made on the path of rate hikes but was the right height more than 25 basis points discussed today? you testified that the supply chain issues could be worked out by the end of the year. today the ceo told foxbusiness that the chip shortage will last into 2023. i want to drill down and get a time on that you see. chair powell: i would not say that i would expect the supply chain issues to be completely worked out by the end of this year. and i have not expected that. what i will say and have been saying is i expect progress to be made in the second half of this year mainly. progress. because we are not making much progress. if you look at a town of metrics you can find some that suggest that delivery times are shorter and inventories in some industries are moving up but overall we are not making progress. things like the semiconductor issue will be quite a long time, i would think, more than through 2023. in terms of being too late i would say that our policy needs to be positioned to adjust a full range of possible outcomes and particularly, the possibility that inflation will continue to run higher more persistently than expected. we think we are positioned to make the changes in our policy to do that and we are committed to doing that. that is really where we are. in terms of your question about the size of rate increases we have not faced those decisions. we have not made them. it is impossible to sit here today and tell you with any confidence what the precise path will be. but as we work our way through this meeting by meeting, we are aware that this is a very different expansion as i have set a couple times with higher inflation, higher growth, a much stronger economy and i think that those differences are likely to be reflected in the policy we implement. >> thank you, let's go to mike mckee. >> thank you mr. chairman. i would like to we some of the strands of your answers together and ask you as you start to reverse policy what your goal is. will you be raising interest rates until you get inflation to 2%? do you want to go below 2% so that on average you get to 2% inflation? and because you said we have to protect the employment part of your mandate, is there some sort of circuit breaker that would stop you from raising interest rates on the employment side? chair powell: no. there is nothing in our framework about having inflation run below 2%. so, that we would try to achieve that outcome. so the answer to that is no. what we are trying to do is get inflation, keep inflation expectations well anchored at 2%. that is always the ultimate goal. we do that in the service of having inflation, we get to that goal by having inflation averaged 2% over time. if inflation does not average 2% over time then it is not clear why inflation expectations would be anchored at 2% so that is how we think about that. what was the last part of your question? >> i was asking if you are protecting the employment side of the mandate whether there is some sort of circuit breaker there? chair powell: i would say that you have a tremendously strong labor market hand you have growth this year forecast to be well above, well above potential. i mean, people are forecasting potential growth around two. most forecasts are about that for 2022. that is you and with policy becoming substantially less accommodative. the labor market will be strong for some time. ideally, what we are trying to achieve his inflation getting back under 2% -- is inflation getting backed up to 2% in a process that accomplishes, that will leave the labor market in a very strong position. nobody really knows what that will take. again, i will say it is not just monetary policy helping inflation get down. it will be supply chain improvements and less fiscal impulse. but monetary policy, it is our job to get inflation down to 2%. in a situation where the two goals are, the two goals can be intention it is difficult. but i do not think they are here. i think a really significant threat to further strengthening in the labor market as per to predation -- as precipitation overtime is high inflation. high inflation is taking away the benefits of some of these large wage increases we are seeing now. so we hope to achieve and our plan is to achieve both those goals. >> does the danger of tightening too much as policy works its way into the economy mean that you should go back to being more forecast appended in making decisions rather than the state dependency you have been using as a framework for the last year and a half or so? chair powell: state dependency was a specifically around the thought that if we saw a very strong labor market we would wait to see actual inflation. actual inflation before we tightened. so that was a very state-dependent thought because for a long time we have been tightening on the expectation of high inflation that never appeared. that wasn't the case for a number of years. so, -- that was the case for a number of years. so in this particular situation will be -- we will be monitoring incoming data as well as the evolving outlook. >> let's go to michael derby. >> thank you. with the benefit of hindsight, do you feel that monetary policy and fiscal policy maybe did too much to react to the crisis and part of the inflation problem now is because the government responds collectively was more than what the economy ended up needing? chair powell: i think it is too soon to write that history really. but i would say is this. -- what i would say is this. remember what i felt like at the beginning of the pandemic. -- it felt like at the beginning of the pandemic. literally, the global economy shutting down on a large part and people going to their home for weeks on ends and no vaccine edit could be a really long time to get them. -- and it could be a really long time to get them. economic activity dropped her a shocking amount. so there -- by a shocking amount. there was a real risk of lasting damage and i think congress responded remarkably with the cares act. it was incredibly timely, very powerful. there will always be flaws in these but in real time it was a remarkable achievement and we responded. we were able to stave off a collapse of the financial system and make time for what really needed to happen, the income replacement and recovery congress made with the cares act. now, that was a lot. what we did was a lot. so what we have now is the strongest recovery of any country and we have a recovery that looks completely unlike other recoveries we have had because we have put so much support behind is a recovery and we are managing the relatively high problems that come with that, high inflation and a labor shortage. these are serious problems, very serious. we are working as hard as we can on them. was it too much? i will leave that to the historians. in 25 years we will look back at this incident. it will be a 2, 3, 4, 5 year timeframe. we will have a better basis to make a judgment about the actions people took. but it was all founded in a very strong reaction to a unique historical event and i guess i will have to leave it at that. i hope i will be around to see how it looks in 25 years. >> thank you. >> thank you. let's turn to dean young. >> thank you, michelle. chair powell, some investors are expecting the yield curve could flatten or even invert after rate hikes began. with that worry you? -- would've that were you? how important -- would that were you? how important is that in the fed's consideration for adjusting policy? chair powell: we do monitor the slope of the yield curve but we do not control the slope of the yield curve. many factors influence longer-term interest rates. but it is something we watch and you will know that from where we had this issue a few years ago. we take it into account along with other financial conditions as we try to assess the implications of all those conditions for the economic outlook. so that is one thing i would say. another is currently you have got a slope if you think about two to the 10 year treasury around 75 basis points well within the range of a normal yield curve slope. so, it is something we are monitoring. we do not think of it as some kind of an iron law. but we do look at it and try to understand the implications of what it is telling us. it is one of many things we monitor. >> can i follow-up and ask if it did invert would you tie it to u.s. fundamentals or would it be driven by a much broader set of factors? chair powell: good question. the u.s. long-term sovereign debt is an important global asset. the fact that our rates are so much higher than other risk-free sovereign rights around the world may put a ceiling on our rates. it would really depend on the facts and circumstances at that time. >> last question. >> yahoo! finance. within the context of the broad effort to normalize rates would you describe what you want to do as a gradual hiking? within the context of hiking cycles it is often a talking point for financial stability and wanted to make sure asset bubbles do not merge. is that factored into the conversation as you think about hiking rates? chair powell: i would describe what we are doing along these lines. this will be a year in which we move steadily away from the highly accommodative monetary policy we put in place to deal with the economic effects of the pandemic. that will involve a number of things. it will involve finishing asset purchases. it will involve lifting off. it will involve additional rate increases as appropriate. we will write down in march our next assessment of what that might be. it will continue to evolve. we need to be quite adaptable in our understanding of this. the last thing we will do is we are going to have a couple more meetings i think to talk about allowing balance. -- the bailout -- the balance sheet to begin to run off in a predictable manner. that is something we will be doing as appropriate. i do not think it is possible to say exactly how this will go. we are going to need to be, as i mentioned, nimble about this. the economy is quite different this time. the economy is quite different. it is stronger. inflation is higher. the labor market is much stronger and growth is above trend even this year. all of those things will go into our thinking as we make monetary policy. you asked about financial concerns. in connection with our policy, is that your question? yeah -- >> yeah, within other hiking cycles it seems like worries about asset bubbles emerging as the result of easy rights have been part of that and i did not know if that was part of the discussion today. chair powell: we have course have a financial stability framework. it shows a number of positive assets of financial stability. you mentioned asset prices as one of the four. asset prices are somewhat elevated and they reflect a high risk appetite and that sort of thing. i do not think that asset prices themselves represent a significant threat to financial stability because households are in good shape naturally -- financially. businesses are in good shape financially. defaults on business loans are low. the banks are highly capitalized with high liquidity and are quite resilient. now, there are some concerns in the non-bank financial sector around money market funds although the fcc -- the ftc has made positive trade -- has made positive proposals there and we felt things in the treasury market during the acute phase of the crisis that we are looking at ways to address but overall financial statement let people are manageable, i would say. -- financial vulnerabilities are manageable, i would say. >> today retired admiral joins the u.s. chamber of commerce for a conversation on geopolitical hotspots to watch in 2022 live at 4:00 p.m. eastern on c-span, online at c-span.org or full coverage on our new video app c-span now. >> c-span is your unfiltered view of government funded by these television companies and more. including comcast. >> comcast is partnering with 1000 community centers so students from low-income families can get the tools they need to be ready for anything. come cans -- comcast supports c-span as a public service giving you a front-row seat to democracy. the u.s. house returns tuesday with votes later in the week on legislation to end force arbitration agreement for sexual assault and harassment survivors in the workplace. members are expected to vote on lgbtq human rights. this and is back monday -- the senate is back monday at 3:00 p.m. eastern and will consider several of bidens executive and judicial nominees including u.s. ambassador to germany and the president of the export import bank. watch live coverage of the house on c-span, the senate at c-span2, online at c-span.org or our new c-span now video app. >> president biden met with technology and manufacturing company leaders at the white house to discuss his social and climate spending proposal and ask about news reports of supreme court justice stephen breyer's retirement. the president said it is up to the justice to announce any future plans he has.

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