The hearing will come to order. Thank you for coming to the committee today to testify. We know you are on a tight schedule and in order to keep you on schedule and ensure all members have an opportunity to ask questions i ask unanimous can send members will be recognized during the question and answer session for three minutes. Without objections ordered in the Ranking Member and i will be recognized for five minutes during the question and answer sessions. Without objections ordered we will both be recognized for three minutes and they will now yield myself threeminute but once again thank you for being here its been seven years since the chair of the Federal Reserve has appeared before this committee and we are very grateful for your being willing to do that i want to make sure that we support the independence and the repeated attacks are unacceptable and dangerous. I look forward to hearing the testimony and discussing Opportunities Congress and the fed have to support the workers and to foster a healthy sustainable economy that works for all americans and with that i will yield to the Ranking Member. It is an honor to have you before this committee as the chairman of the committee has said its been many years since the researcher man has been here and now we are delighted to have you. I will submit my opening comment for the record so we can expedite matters and hear your opening comments and get the qanda. But once again, welcome. I think the Ranking Member and if any other members have Opening Statements of a mesa to those in writing for the record as well. Once again, thank you for being here this morning. The committee has received your Opening Statement and it will be made a part of the record. You now have ten minutes to get your oral remarks and he begin when you are ready. Thank you very much, chairman and ranking them were members of the committee. I appreciate the opportunity to testify before you today. Let me start by saying that my colleagues and i strongly support the goal of maximum employment and price stability congress has set for the Monetary Policy. We are committed to providing clear explanations about the policies and actions. Congress has given us an important degree of independence so that we can effectively pursue our statutory goals based on facts and objective analysis. We appreciate that our independence brings with it an obligation for transparency and accountability. Today i will discuss the outlook for the economy and the Monetary Policy. The u. S. Economy is now into 11 year of this expansion and the baseline outlook remains favorable. Gross domestic product increased at an annual pace of 8. 9 in the Third Quarter of this year after rising around 2. 5 last year and in the first half of this year. The moderate thirdquarter reading is partly due to the transitory effect of the strike at general motors. It also reflects weakness in Business Investment which is being restrained by sluggish growth abroad infiltrate the development. These factors also weigh on exports and manufacturing. In contrast, Household Consumption has continued to rise solidly supported by the healthy job market, rising incomes and levels of Consumer Confidence. Reflecting the decline in Mortgage Rates since late 2018, residential investment turned up in the Third Quarter following an extended period of weakness. The Unemployment Rate was 3. 6 in october, near half a century low. The job gains has eased this year but remains solid. We have been expecting some slowing down after last years strong pace. At the same time, participation in the labor force for people in their prime working years has been increasing. Ample Job Opportunities appear to have encouraged many people to join the workforce and others to remain in it. This is a very welcomed. The improvement in the job market in recent years has benefited a wide range of individuals of communities. In the recent wage gains have been the strongest for the lower paid workers to the people who live and work and grow in middleincome communities and many that have struggled to find work are now getting opportunities to add new and better chapters to their lives. Significant differences however do persist across different stuff workers in different areas of the country. Unemployment rates for africanamericans and hispanics are still well above the rate for asians into the portion of the job is over in the rural communities. Inflation continues to run below to open committees to present objective. The total price index for personal consumption expenditures increased 1. 3 held by the declines in Energy Prices. Core inflation which excludes Energy Prices and tends to be a better indicator of future inflation was 1. 7 over the same period. Looking ahead, my colleagues and i see a sustained expansion of economic activity, strong labor market and inflation near or symmetric to present objective the objective is most likely. This is based on outlook partly reflecting the policy adjustments that we have made to provide support for the economy. However noteworthy risks to the south will remain in particular the sluggish growth abroad and trade developments have weighed on the economy and imposed on the risks. Moreover, inflation pressures remain and indicators of longterm Inflation Expectations are at the lower end of the historical ranges. Below target inflation could lead to an unwelcome downward slide in longerterm Inflation Expectations. We will continue to monitor these developments and assess the implications for the u. S. Economic activities. We will also continue to monitor risks to the Financial System. Over the past year the overall level of the vulnerabilities facing the Financial System has remained at a moderate level. Overall, investor appetite for risk appears to be within a normal range although it is elevated in some aspect. Its loads of businesses are historically high, but the ratio of the household borrowing to income is low relative to its pre crisis level and has been gradually declining in recent years. The core of the Financial System appears resilient with the leverage low in funding risk limited to the levels of recent decades. At the end of this week we will be releasing our third semiannual Financial Stability report that shares our detailed assessment of the resiliency of the u. S. Financial system. During the Monetary Policy, over the past year weakness in Global Growth, trade developments in the unit inflation pressures have prompted them to address to the assessmenentrustthe assessme appropriate path of Interest Rates. Since july, the committee has lowered the range by three quarters of a percentage point come and abuse policy adjustments but the current target range of one and a half to three quarters of a percentage. The committee took these actions to help keep the economy strong and inflation near the two present objective and to provide some insurance against ongoing risks. As the Monetary Policy operates the full effect of these adjustments are on Economic Growth, job market and inflation will be realized over time. We see the current stance of Monetary Policy as likely to remain appropriate as long as the incoming information about the economy remains broadly consistent without outlook of moderate growth, strong labor market and inflation near our symmetric to present objective. We will be monitoring the effect of the section these actions alh other information bearing on the outlook as we assess the appropriate task of the target range for the fund rate. Of course if the developments emerge, we would respond accordingly. The policy is not only present course. The fomc is committed to ensuring that the policy framework remains well positioned to meet the statutory goals. We believe that our existing framework has served us well nonetheless the current low Interest Rates involved in the environment may limit the ability of the Monetary Policy to receive support through the economy. We are currently conducting a public review of the Monetary Policy strategies, tools and communications. The first review of its kind for the fed. With the u. S. Economy operating close to maximum employment and price stability, now is an especially opportune time to conduct such reviews. Throughout these events in the country, weve been hearing a range of perspectives only from academic experts but also from representatives of consumer, labor, business, community and other groups. It will draw on the insights that we assess this help you achieve and maintain the maximum employment and price stability. We will continue to report on the discussions in the minutes of the meetings and share the ee conclusions when we finished the review likely around the middle of next year. And the downturn will also be important for the fiscal policy to score the economy. However, as noted in the ceos recent longterm budget outlook, the federal budget is not run that is on an unsustainable path with high and rising debt. Over time, this outlook restrained fiscal policy makers willingness or ability to separate the Economic Activities in the downturn. In addition, i remain concerned that the high and rising federal debt can in the longer term restring private investment and thereby reduce the productivity and Overall Economic growth. Putting the federal budget on a sustainable path would aid the longterm u. S. Economy and help ensure that policymakers have the spacpolicy makers havethe sy to assist and to stabilize the economy if it weakens. I will conclude with just a couple of words along the technical implementation of the Monetary Policy. In january, the fomc data to key decision to continue to implement Monetary Policy in an ample reserves regime. In such a regime we will continue to control the rates primarily by setting up our advanced rate and not through frequent interventions to actively against the supply of reserves. In the transition to the efficient and effective level of the reserves and the regime, we slowed the gradual decline in may and stopped in july and in response to the funding pressures and the markets that emerged in september, we decided to maintain the level of reserves at or above the level that prevailed in early september. To achieve the level of reserves he announced october that we would purchase treasury bills in the Second Quarter of next year and would continue temporary open Market Operations through january. These actions are purely technical measures to support the effective implementation of Monetary Policy as we continue to learn about the appropriate level of reserves and do not resent a change in the stance of Monetary Policy. Thank you and i look forward to our discussions. Thank you very much for your statement. We will now begin to question and answer session. As a reminder, members can to present questions to be answered later. Those questions and answers will be made a part of the formal hearing record. Any members that wish to set questions for the record they do so within seven days. As we normally do, the Ranking Member and i will defer questions until the end. I would just admonish all the members i will not be my normal self and will try to keep strictly to the time limits so we can get him out of here. He has a hard stop at noon. With that i now recognize the gentleman from massachusetts for three minutes. Chairman powell ticket for joining us this year. We share your interest in continuing this 11 Year Economic expansion. But we also have concerns. And one of my concerns i will be the first to say we in congress have not been good partners and doing our part. You just mentioned that you are concerned about the high and rising federal debt, and the fact that in the longterm it can restring private investment and thereby reduce productivity and Overall Economic growth. It is a typical to increase deficits as we are now during the prolonged economic expansion. However according to the cbo as it is discussed in the jobs act which coulwhich can really bened wealthier corporate american corporations at one point find truly in dollars deficit over ten years. Now of course republicans claimed this would lead to increases if you testify moderate thirdquarter gdp growth has a weakness in Business Investment which is impacted by sluggish growth abroad and trade development. Im hoping you can elaborate on what you mean by trade development. First of all, let me say we have no responsibility for trade policy and not giving anyone advice on the trade policy is not our role. We have a narrow role we try to do that in the u. S. Economy and supporting maximum employment stable prices and to do that, anything that could affect our achievement of those goals is in principle relevant for the Monetary Policy so we have been hearing for the last year and a half from businesses that uncertainty around the trade policy had some extent the tariffs have been weighing on thwaiting on adifferent sentimes what i am referring to their. You also discussed the policy programs that could bring the discouraged workers back to the workforce to address the fact that despite our growth we still have lagging workforce participation 63. 3 and you mentioned mothers returning to the workforce after their children grow up. As a father of a 1yearold who is here with me in washington today, because my wife is on a business trip to dallas, i wondered if you could talk about the value of paid family leave to ensure that women who want to work while they are raising children can do so. Hispanic Labor Force Participation is a very important issue for the United States needs urgent attention. We do lack other countries now in the Labor Force Participation. I can point you to research and i can talk about institutional differences, but it really is not appropriate for me to evaluate o whats up with this particular policies. Remember we are not elected by anyone. Weve been given a specific mandate, and i think it is really up to that is the question is would it help increase workforce participation . There is research that shows those kind of policies that support childcare and family leave and other countries have supported the higher participation among women in the workforce. Hispanic the gentlemans time has expired and recognized gentleman from ohio for three minutes. Minutes. Thank you, mr. Chairman, and Ranking Member for holding this important hearing and chairman powell, thank you for being here today. As the representative for eastern and southeastern ohio, and very concerned about the consequences of our growing National Debt and the effect that will have on the National Security and quality of life for our children and grandchildren. The publicly held debt has averaged 42 of Gross Domestic Product over the last 50 years. It is now at 79 of gdp. Within three decades the Congressional Budget Office projects that it will reach 144 of gdp. Which would be a god by far the highest level in american history. So, chairman powell, in your view, is the federal budget outlook sustainable . I think i would define sustainable as the debt is not growing faster than the economy. Our debt is growing faster than our economy by a margin, and so i think by definition that makes it unsustainable. Can do that to continue to indefinitely grow as a percentage of gdp, and at what point do we reach the Tipping Point where we are unrecoverable . That isnt a question to which there really is an answer to the specific Tipping Point. There are examples of countries that have much higher levels. What you do know is that over time as the debt builds up, you will be spending more and more. More accurately our children will be spending more and more of their tax dollars to pay for interest on the borrowing that we have done for the things they need come education, healthcare, security. You answeresecurity. You answered my next question in the first response. What is the appropriate way to measure and that is when the economy is growing faster than the debt and not the other way around so i will skip that question. If the federal budget outlook is unsustainable, and i think weve established that it is, what a challenge does this pose for the u. S. Economy . I would stress these are longerterm challenges, and i think ultimately we would have no choice but to get on a sustainable path. You dont have to pay down the debt or balance the budget. You have to have an economy that is growing faster than the best and you have to do