With the turkish leader. Much of the focus quite appropriately for the Business Network what the chairman of the Federal Reserve is saying right now. You know had three rate cuts this year. The third one just last month. He seems to be indicating he will keep his powder dry, holding fire for a moment. He acknowledges trade headwinds, other issues could slow things down. He is always ready to pounce if need be. He is certainly not indicating anytime soon. Get the read percent from our own Edward Lawrence. He has been monitoring all of this. Edward . Reporter neil, the testimony will go on for another 30 minutes or so when the Federal Reserve chairman has to leave here. Federal reserve chairman Jerome Powell told senators and Congress People does not see a rate cut for december unless check data would come in better than expected. He said the Federal Reserve would act going forward. He painted a glowing picture of the economy. He said the Consumer Spending. Wages are rising. Job market helped the consumer spend. Powell says the strong job market is driving the economy because consumer continues to spend. He sees that rising spending from the consumer throughout the rest of the year he says, at least into next year. He is concerned about inflation undershooting the target again. But he framed debate related to Interest Rates and inflation like this. Listen. We see the current stance of Monetary Policy as likely to remain appropriate as long as incoming information about the economy remains broadly consistent with our outlook of moderate growth, a strong labor market and inflation near our symmetric 2 objective. Reporter powell says he is watching risks to the economy, Global Economic slowdown, trade uncertainty. He is concerned to see if that will affect the u. S. Economy going forward. He says businesses taken on too much risk with debt. That is something the Federal Reserve is watching. The Federal Reserve chairman turned to lawmakers, putting congress on notice, saying the federal debt is on unsustainable path. He wept further than that today. He said unless congress can get control of this unsustainable path it will hurt their ability to help in an economic downturn with economic stimulus going forward. So, neil, again the headlines here. No rate cut in december he is signaling unless the Economic Data turns south. He says the consumer will continue to spend. He is watching weakness in business investment. He says the consumer will drive this economy through the holidays, into next year. Neil . Neil thank you very, very much my friend, Edward Lawrence. Two things before we go back to the powell hearings, your money, not playing political favorites here, this is event that you should watch and monitor what is happening on impeachment front. Were listening closely to William Taylor testimony, acting ambassador to ukraine. Only thing i saw potentially newsworthy or white house rattling his saying that President Trump seemed to care much more about investigating joe biden than about the ukraine itself. If that is a bombshell or smoking gun, in the eye of the beholder. Were monitoring that very, very closely as we will later on with george kent, Deputy Assistant of secretary state your european and Eurasian Affairs and his recollection of the phone call impact on ukraine. For your money, Jerome Powell, only Jerome Powell will have so much to say about continuation of a recovery the president says is second to none in the postworld war ii period. That is in the eye of buy holder. Federal reserve chairman is big reason. Three rate cuts for this year. That might be it for the time become time being. No indications that the chairman will change the economy anytime soon. The goldilocks variety, not too strong, not too weak, inflation held at bay, inflation not necessarily invisible. To hear the fed chairman tell it, perfect. Lets go to the hearing. Look exclusively at the data, at the research, at the performance of the u. S. Economy, those are things, we have a very careful, thoughtful process thats been developed over decades, over a century really. That is how we try to set Interest Rates. We dont consider political factors and things like that in what we do. Thank you. I have a friend in switzerland who went to borrow 10 million. Got a negative Interest Rate, negative. 3 of a percent. Theyre paying him 30,000 a year to borrow 10 million. Do you see any prospect of negative Interest Rates in the u. S. Con . Negative Interest Rates would not be appropriate in the current environment. Our economy is in strong position. We have growth. Consumer sector. Inflation below target. Very, very low, even negative rates we see around the world would not be appropriate for our economy. Those, you tend to see negative rates in the larger economies at times when growth is quite low and inflation is quite low. That is just not the case here. It is different for some smaller european countries. It is about keeping currency from appreciation which is the case with number of countries. From december 15th, through december 2018, slow consistent increases in rates. We turned that around with recent cuts this year. Is there enough room to cut rates further if we get another slowdown or recession . Have we given up Monetary Policy as a tool at the moment for dealing with that . Well, typical postworld war to recession involved rate cuts of close to 5 . The current federal fun rate is in the mid 150s. So were well short of that. 1 1 2 . So, i think it is, it is a fact not just in the United States but around the world that Central Banks are going to have less room to cut in this new normal of lower rates and low inflation. So thats why we are conducting this external review of Monetary Policy at the fed. Were looking for ways to make sure that we have the tools to do what were assigned to do by you, which is achieve maximum employment and stable prices, even in downturns. And thats what were going to be doing. I will say also, that fiscal policy is often, part of the answer, often a big part of the answer when there is a severe downturn. We would certainly look for that to be the case if needed. Thank you, again. By bringing up the challenge that public debt faces all of us here. I was raised to believe that money supply and growth were causally related. If money supply grew quicker than Economic Outlook that inflation was net result. Were less than 2 this year. You have muted expectations. Is there no longer connection between money supply growth and inflation . Should i Pay Attention to modern monetary theories, for example . So the connection between monetary aggregates and inflation is something we all learned in econ 101. I did. It was important. It was generally thought empirically a good relationship. I think about 40 years ago as the Financial System developed all kind of alternative forms of money, the relationship between monetary aggregates and growth has just gone away. So we dont, we look at those aggregates. They no longer are driving part of the theory. It is price of money as opposed to quantity that we look at which is Interest Rates. Im out of time. But thank you, very much. Mr. Chairman i yield. Senator cotton. Thank you, mr. Chairman, chairman powell welcome back. I want to Start Talking about chinas Economic Growth. Chinas Economic Growth in quotes. They have reported most recently 6 1 2 growth. Thats down from most of the last 30 years. Still probably somewhat inflated. In fact, Michael Pettis at the Carnegie Endowment for International Peace says chinese industrialists and economists find hard to find any economic sector enjoying growth. They had a few findings he found to be quite interesting. Gdp is not particularly useful measure for determining chinese growth because they have massive investments in nonproductive activities. Second, china likely distorts its gdp significantly in a way that is systematically pushing it higher. Third, that increasingly gdp as reported in china is not so much a measure of economic out put but measure of political intent given the benchmarks china imposes on local governments as many, as well as many stateowned enterprises. As long as they have debt capacity and can postpone writing down of nonproductive assets they could essentially achieve any growth target they wanted. What are your thoughts about this general question of chinese growth and the specific points that mr. Pettiss research have found . I think its very hard, i certainly feel that its very hard to understand china. You can read all you want, visit all the time but nonetheless it is still very hard i think for me anyway to really feel like you understand the way the economy works, the way the society works. So i think there is, i think you have to as a general matter, just accept that its really hard to know. I think on Economic Data in particular, you know, we dont, im familiar with Michael Pettis and his research and all that but we, we havent taken a view as an institution about that. I think couple things are worth noting. One is that you know, the it may that be there is more information in the change than there is in the level if you know what i mean. The other we noticed here in the last few years that the volatility of their economic reports has declined substantially which is kind of suggest as little more management. Nonetheless we dont really know. The truth is we dont really know. We take the data, we take it with a bit of a grain of salt. You spend at the Federal Reserve capable economist there is look at underlying indicators, statistics try to suggestion the direction of our economy. When you look not just how the chinese leadership in the communist party behave but when you look at some of those indicators, how their people are behaving, how other things, like Energy Inputs or shipping, so forth, do you see a country behaving as if they have almost 7 growth right now . Its hard to say. I would say, one thing that is notable is, they have not responded with massive stimulus at this, to this current situation. They have had, obviously over a longer period of time growth has been slowing from detect decades of 10 as an economy matures. I think theyre trying to manage that decline. They did put an awful lot of stimulus to work after the financial crisis and, that supported their growth. I think they have been much more cautious and careful. They have a Deleveraging Campaign as im sure you know, that has been going on now for one or two years. They havent really backed away from that. That is part of, by the way, i think that is part of the global slow down actually is trying to, trying to at least stop debt from growing inside of china where they have usually high debt as a society for any emerging market nation. So i would say theyre behaving relatively thought fully and responsibly in response, they appear to be in response to this current slowdown. Thank you, my time has expired. Senator hassan. Thank you, very much, mr. Chair. I appreciate your and the vicechairs convening of this meeting and to chair powell, thank you for being here and your work. Mr. Powell as you know it is critical to the longterm safety and stability of the u. S. Economy that the Federal Reserve makes data driven decisions and remains independent from political influence. Unfortunately recent political pressure on the fed is having real World Economic consequences. A recent study found that markets react each time you are publicly pressured to intervene in the economy. With quantifiable change in investors expectations that the feds Interest Rate targets will drop. Chair powell, can you tell the committee what actions you are taking at the Federal Reserve to not only insulate against political influence but also to signal to investors that the fed makes independent decisions based on sound economic analyses . Thank you. So politics plays absolutely no role in our decisions. We use the best data, the best integrity. So, i am familiar with that research. I would say, i think it is very hard to look at, you know, our incredibly complicated Financial Markets and economy where many, many things are driving results, pull out one or two tiny effects. There is other research that points to different results but i would, it is absolutely essential that everyone understands we are doing our jobs as we always have without regard to politics. We serve all americans. We do the best we can based on our analysis. We try to be as transparent as we can. We explain ourselves. Put everything we do on the record. People dissent, they put their dissent on the record. That is as it should be. I think it is important to understand that research is complicated that we dont complicate it further with political actors putting pressure on the fed and that has been the norm and tradition. I hope it is one we can return to. I wanted to follow up on something senator lee talked about, as member of the Senate Finance committee with jurisdiction over trade, im pushing for clear, strategic trade policy that provides certainty to struggling small businesses. As you and i talked about, i heard from businesses across the state targeted by chinas up fair trade practices theft of intellectual property and forced transfer of proprietary technology. On top of these economic harms, the administration manufactured endless trade uncertainty and heaped damaging tariffs on new hampshires businesses. I know you have repeatedly said chair powell this recent trade uncertainty has created risks for the u. S. And global economies. Can you expand a bit on your previous answer how trade uncertainty impacted the Economic Outlook, what you view as the feds proper role with regard to the on going trade tensions from china . We hear from businesses. Have been hearing a yearandahalf, this is a big issue for them. That it is heading them back from making decision. In the first instance, businesses were looking at ways to rearrange their supply chains, almost all manufacturing businesses these days have supply chains. It has been real distraction for management. I think it weighed on businesses willingness and ability to, to, you know, to invest and keep growing, that kind of thing. In terms of the appropriate response, you know, our response is not to give advice on trade policy but it is to react to whatever it is, that either helping or hurting our ability to achieve our mandated goals. So this is one of those things. We call it out as something that we are aware of and as something that is weighing on Business Sentiment and ultimate thely on the economy. Thank you for that and i will just note we may submit to the record that i share representatives frankels interest and concern about the inflation gap. It is not just a wage gap, but inpack of inflation at particular middle class families and i hope that is something we can learn more about from the fed. Thank you, mr. Chair. Senator heinrich. Welcome, chairman and thank you for coming to testify today. I had a chance recently to meet with a number of European Central bankers and they really outline for a group of us the steps theyre taking to understand and quantify and mitigate the risks that Climate Change is posing to the Financial Markets. So i wanted to ask you what the fed is doing to understand those risks and to look at their role in the economy as were moving forward . I just say Climate Change is an important issue but not principally one, is not one given princely to the fed to deal with if you will. Other agencies have that. Clearly that is the case. I just want to understand, if were looking in a broadway at risk and understanding the data from that sort of lens . I think that is the right lens. The lens for us is risk management. So we are, were doing, their research all throughons of Climate Change for the economy, for Financial Institutions and for all kind of things. I think thats appropriate research. Were just globally at the beginning of understanding that. There is a lot of research boeing on including a significant amount at fed. I think, honestly for Monetary Policy it is not a current consideration. It would not be something that would have any effect on the current setting of Monetary Policy. Over time though, it could, for example, affect the neutral rate of interest or volatility of economic activity. Things like that. Those are things were t