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tv   Federal Reserve Chair Janet Yellen Testimony on Monetary Policy  CSPAN  February 10, 2016 9:13pm-12:25am EST

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have very much in mind
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of the conduct of monetary policy and i recognize myself for three minutes. we heard president obama taken economic victory lap but the people are having none of it they are tired of hearing from the out of touch ruling class in washington how good things are when they're reality is vastly different not listed
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in the fact or presidential appointee a hope it'll follow suit with quantitative easing of the zero interest-rate policies working families paychecks have declined. one added six is on food stamps and there hasn't been a single year but one published report that there is no parallel for this since world war ii or the beginning of the republic. so with the lgbt growth for struggling working families. and to condemn the fed decision 25 basis points to
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make it appropriate to revise the fomc but given that article one of the constitution gives congress the power to coin money and regulate the value. that this set -- the fed to adopt a policy that is transparent to end a sustainable this is part of the rationale of the oversight reform and modernization dash. it is the fatal conceit to micromanage our economy. we now have eight years of history to prove otherwise. no amount of monetary policy is the same for fiscal policy with the regulatory onslaught and the epa is
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replaced with greater opportunity end competition and innovation that cannot help the economy but only hurt it. with the unsustainable federal debt. and that preferences the debt 199 times. and with those assets bubbles that we likely see in the turbulent equity market today. is an almost 500% it is one of the largest sources. separate and apart for monetary policy that they
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can now control every major quarter of our economy with almost no accountability or transparency. the american people who should wake up to discover the central bankers are central planners. we now recognize the chair for the opening statement. >> i would really like to think janet yellen to be here today to assure a full recovery is achieved for all. in the obama administration makes a tremendous progress
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in over the past consecutive months in the and obliterate has fallen more than half but despite this progress significant work remains 7.8 million workers and working part-time jobs. if only the economy was strong enough. i wondered if that expected path into underestimate the labor market and further raising rates is further
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away from what is to insure that vulnerable population is met. and to explore the ramifications. that relies heavily on the private sector banks into discuss reasonable alternatives. with the federal reserve but i just wondered for the funds to be used to have the workers of the vulnerable populations many of us have been patient and this is a record of the dodd/frank act
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and designed to be too big to fail. farha how but after '01 common not to the federal reserve can have consequences than they are not credible what can we do about this? it is time and we understand we give a lot of opportunities to the banks to get their right in we have not do that eyelid forward to hear your views on the economy how we can more effectively to promote a safe and sound financial system so i would welcome opportunities to address their concerns the balance of my time.
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>> the vice-chairman of monetary policy. >> i sat down to get ready i can ask your plans on interest rates and how you arrive at decisions you would make it asked about your role to regulate financial institutions clearinghouses and i could even ask you of the role of the fed is a misleading statement regarding the fed and the treasury role with big debt payments of the shutdown. that is too much.
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it is too much for you to be doing like so many other parts of the government to go way beyond the original intended. keep the official system in the currency stable, much purchasing power these people have how they can invest and whether or not they have the job. and that you don't have the ability to do is you shouldn't be involved with regulating mortgages with a credit card is certainly not involved in political decisions that intentionally keep congress in the dark tower we will pay back interest on the debt. so we will talk about sound many individual mandate in
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the debt ceiling asset bubbles in hopes at the end perhaps the time has come for a long-term price stability. >>. >> eight you so much mr. chairman. has you kin tell from the opening statement said sure last appearance i support your rate increase you provide a lot of credibility however the economic times are destined to be interesting now it is
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reflected in the stock market more central banks are looking to ease rates i am not saying we need to harmonize the policy but i'm interesting to hear how we are in front of these trends monetary policy is a limited tool but if we grow our economy to keep the contract it causes me to realize they have to do their part to prove this in those strategies especially among women to provide vocational training is sustainable jobs in with that i yield back the balance of a time.
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>> we welcome the testimony of janet yellen, has testified in she needs no further introduction in. her statement is made part of the record. >> chairman and other members of the committee my employees to present the semiannual monetary policy report to congress. to discuss the current economic situation for monetary policy. it has made further progress
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for the objective of maximum employment are well and is expected to be made low in the near-term because of energy prices the committee expects inflation will rise to its objective over the medium term. the number of payroll jobs will rise in in 2015 and posted a gain in net cumulative imports -- increase of employment is over 13 million jobs. meanwhile at 4.9% in new jersey yuri with a percentage point to be in line with the fomc participants most recent estimates of though levels.
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with those number of individuals there available to work in those of their working part time but would rather work full time. in those you prior to the recession while those conditions have improved substantially there is still room for sustainable improvement beguines of the job market last year were accompanied by a moderate expansion of economic activity. gross domestic product fell one in three quarters percent subdued foreign
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growth in the appreciation of the dollar it in the fourth quarter of last year growth of the gdp is to have rose more sharply of just three quarters percent growth was held back by exports as well as the contribution from inventory. that final demand has continued to a finance to be supported by steady job gains with disposable in tom. one area of strength is that sales of these vehicles
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reached the highest level ever. those that cause companies to slash jobs and over the second half of last year and continues to move up on balance with the new construction remains well below levels with the demographic trends. those to recently year less supportive of growth with declines of equity it with a further appreciation of the dollar. is a two-way audio look for economic activity with
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faster wage growth and unemployment gates should support a real income and consumer spending. with global economic growth should pick up over time supported by the monetary policy. the committee expects bin with the economic activity will experience and in the coming years and as indicators will continue to strengthen. as always is the case the economic outlook is uncertain. those pose risks to u.s. economic growth although the recent economic indicators do not have a sharp slowdown of chinese growth to
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intensify the uncertainty of the exchange-rate policy this uncertainty would increase the financial markets against the backdrop to exacerbate the concerns of the al look for global growth. these with strong supply conditions contributed to the price of oil and other commodities. in turn they trigger financial stresses particularly in foldable he emerging market economies shed any of these risks materialize foreign activity
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could weaken and conditions could exceed our projections for a number of reasons including the up possibility will boost u.s. economic growth in the present it is closely monitoring financial developments as well as assess the implications of inflation in the balance of the outlook. as i noted earlier it continues to run below the objective. as measured by the price index to increase just half a percent through 2015. to a large extent it kid be
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traced to the steep declines in oil prices of other imported goods. industries said further declines for the price of oil and other commodities with the other further appreciation of the dollar it expects inflation to remain low in the near-term. but once they stop falling from those sources shed wayne and of the labor market strengthens further it is expected to rise gradually over the medium term with the shortfall from 2% the committee carefully monitors expected progress to inflation goals of course, inflation expectations play an important role in that
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depends on the degree to move to historically low levels. the changes of list of liquidity premium over the last year and have contributed to these declines the survey measures are also at the low end overall they have been reasonably stable. of the fomc conducts policy to promote maximum employment and price stability as required by the statutory mandate by congress last march the committee stated it would be
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appropriate to raise the fed funds rate for further improvement in the labor market so inflation would move back to the objective of the medium term. neece to criteria had been satisfied with the fed funds rate 1/4 percentage .1 quarter and woolen half percent this marked the end of a seven year period with fed funds rate was held in years zero the decision in in december to raise the fed funds rate reflected the assessment the economic activities would expand at a moderate pace in they would
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continue to strengthen with that long run objective the fomc judged it was a charitable to a transitory factors and those product markets in the committee recognized for those monetary actions if the fomc had the start of normalization for too long it would tighten policy abruptly in in the future to keep the economy from overheating or overshooting the objective to increase the risk to push the economy into recession it is important to note that
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monetary policy remains accommodative to anticipate it will borage only gradual increases in addition it expects the fed funds rate will remain for some time this is consistent with the view that the fed funds rate that is six pensionary or contraction very. it is currently low by historical standards and is likely to rise gradually over time. maybe it is partly a charitable to the economic headwinds to have access to credit for some borrowers
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and the significant appreciation of the dollar. of course, monetary policy is by no means on a pre-said course the fed funds rate would depend on what incoming data for the economic outlook and we will reassess what part of the fed funds rate is consistent of maximum employment. in doing so we will take into account a wide range of information indicators of pressures and expectations with readings on international development and stronger growth with their rapid in place to suggest that the neutral fed
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funds rate makes it appropriate to raise the fed funds rate more quickly as well. so that would be appropriate we are committed to dual objectives as appropriate to foster conditions the federal reserve to to use in rand reverse operations to move the fed funds rate into a new target range the adjustment is important to raise the fed funds rate in the environment of reserves in meanwhile to complement
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the rates by establishing a soft floor of money-market interest rates. those operations allow the fomc effectively without having to have the balance sheet of longer-term security the committee judged there removing monetary policy accommodation by a traditional approach is preferable to selling longer-term assets. it could be difficult to calibrate it is continuing its policy for maturing treasury securities in principle payments is
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highlighted in the december statement to continue this policy with the fed funds rate is well under way with those longer-term securities with the financial conditions to return the federal funds rate targets i will be pleased to take your question. >> i know you are familiar with the federal oversight that was passed by the house to again bring about greater transparency to respect the independence that to make sure it lets us know the
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variables that you used so we can plan now their family economies. i know you are not a fan because i have a letter dated to november 16. you call back a grave mistake i have another that describes it as an important reform your letter complains to be strictly adhered to my letter says the legislation does not change the fed to any rule it is certainly not mechanical but your letter says the act to undermine the independence of the said mine says it compromises the
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independence to report a strategy prevents policymakers from being under pressure your letter states it would severely damage to become a lot. but your letter is signed buy you and my letter is signed by dr. hansen from the university of chicago ruled -- nobel laureate. george shultz for verse secretary of treasury former federal reserve governor, jerry jordan president of the cleveland
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federal reserve bank, a former president of this eight louis federal reserve think from economic advisers stanford university of the president's council of economic advisers with the federal reserve board with a former research director with a former undersecretary of the treasury and author of the taylor rule in there are 15 others. so we have three nobel prize winners in economics and a host from the federal reserve rinaldi and
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respected economist in the country privilege disagree with everything you asserted i know you were not a san but i would caution you, the chair when you said juppe apocalyptic in hyperbolic language you might consider whether or not it undercuts your credibility as fed share. i have one question in your testimony to characterize of the policy rates you testified removing the accommodation by the traditional approaches preferable to shrinking the of balance sheet that holds almost as much to treasury as china and japan combined. trying to figure out precisely about this
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approach where we bring this up in her opening statement to subsidize some of the biggest thing since our country with asset allocations and the fed funds rate is about 30 basis points you pay the banks 50 basis points for those that seem to be above the market rate. you previously testified this does not involve a subsidy but it appears to be in the store real asset allocations. >> the tools with short-term interest rates in to make
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central banks said it is the critical tool we need to rely on with the level of short-term rates with what we regard as appropriate stance with those mandated goals. i would point out to we are paying interest to banks on reserve those are large portfolios in the mortgage-backed securities that is substantially greater interest in the cousin of that large balance sheet to back to the treasury and the american taxpayers.
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>> is it true you pay 50 basis points? >> it is necessary to raise benchmark rates. >> my time has expired. >> continuing on the discussion is to do so in a manner with the private sector banks. to pose 7 billion as the economy strengthens the
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announcer increased dramatically can you expand to raise rates in that current environment? with the possible alternative approaches for what is to be the mandate of you have the health plan dash authority? in what you do have the authority to do. >> prior to the financial crisis with the level of short-term interest rates with a small variations of the banking system following a financial crisis with the
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traditional old-fashioned approach is no longer feasible. that wisdom and decided to do so and then speed data bin 2008. and to use that to raise the short-term level of interest rates and as that mentioned did why we use that globally why we consider all the action that we took to reduce the decline though
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labor market and set we believe we could raise the short-term rates. >> that you are limited only to that action to have that authority to make other decisions with the interests that you pay you have some flexibility? >> we would read have control of short-term interest rates in shrinks the portfolio back to the levels we had before the crisis we have set out a plan how we would normalize
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policy not on these long-term assets but short-term interest rates. to sell off long-term assets is a strategy it in a predictable way. end congress could if they decided to taught -- take it away. >> it would be disruptive
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but first of all, as the banks are hurting the interest with the leveller short-term rates rising as these banks rely on eventually this will be the mechanism to reward savers and finally to emphasize from the taxpayer point of view the federal reserve has transferred roughly $600 billion back to congress to the taxpayers a and the treasury that have contributed to fighting in
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seeing a the government and it has only been possible because a larger stock of reserves in the baking system with a far larger stock of interest bearing assets of the typical level of transfers with the order of $20 billion over the past two years we have transferred $100 billion per year. >> and i yield back the balance. >> in a quick follow-up with traditional tools as they had used the of the four the
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fed funds rates trading of 30 basis points ever been below the 50 basis points? has it ever been below? we're first given in the power to set at 25 basis points in rebates that 50 the fed funds rate moved up 25 basis points but continues to trade below. >> those are traditional tools did with that reserved opponent why shouldn't they
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adopt the rule as a guidepost? bayadere no means normal to perform well under ordinary circumstances. two years ago this committee said something similar they are extremely unusual to provide a sensible approach like the of moderation is better not appropriate. so you give speeches in 2012 to of here we are in 2016 kerry using traditional tools of monetary policy? the economies made further progress to say inflation is
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low in the near-term but not the medium term are we in normal times? >> the economy is close to normal that the unemployment rate has declined to the of levels that my colleagues believe are consistent with full employment in the long run. in there is a good reason to think that things are normal. what is not normal is the neutral level of the fed funds rate that referred to in the testimony. . .
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the committee needs to look at guidelines for roles as useful benchmarks as it considers the appropriate stanza policy, but i believe in most of my colleagues would agree that we shouldn't
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mechanically follow that rule or any of the third rule but we need to take into account a large set of indicators of how the economy is performing. >> the chair now recognizes a lady from wisconsin. >> thank you so much mr. chairman. again, welcome. i want to take us in a different direction. many of us here on both sides of the aisle are really concerned about what is happening with our smaller banks. we understand that because of -- we had a lot of concern and we do made debated dodd frank and provisions like -- they are by the concerns of large banks and active capital markets. i know that you are not the only
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regulator overseeing implementation of dodd frank. i like your thoughts on how the rules may have been tailored or should have been tailored for smaller community banks. the stress test, the, the capital standards are killing our small banks, compliance, officers where they do not have the additional staff. just your thoughts on what should have been done or how has it been tailored? >> let me say that i think community banks and their vitality is exceptionally important. they provide enormous benefits to the country and to the economy. i recognize the burden on community banks is intense. >> they are shutting down. >> for our part we are focused on doing everything we can
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conceivably can to minimize and reduce the burden on these banking organizations. we have been conducting in a review to identify potential burdens that our regulations impose on these banks. we will do everything we can to respond to the concerns that are identified there to reduce burden. we are looking for many ways, first of all we had tried to tailor our regulations to the size and complexity of institutions. the smaller community banks are not subject to stress testing requirements, many aspects of -- three and rules do not apply to those banking organizations. we have tried to simplify those requirements. in addition to that we are
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trying to reduce the duration of the time that we spent reviewing banks during exams. we are trying to simplify and be more targeted in our requests for documentation. we try to identify community bankers, what is relative to them and what they can safely ignore. we are looking for ways to conduct exams that are more focused on the actual risks that are relevant to a particular organization. so, i recognize the burdens of those banks have been bit very intense and we pledge that we are doing and will continue to do all we can to reduce burden. >> thank you. on this committee we spent a lot of time talking about moral hazard. so, i guess i would like your
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view on whether or not you think there are any moral hazard on not a single person involved in the 2008 crash having gone to jail? they get fines, they get compliance letters where they can clean up their act and avoid prosecution, i am wondering if you think it is important for us to seek, so what you pay a fine that is not, that doesn't stop anyone for doing the next crime. unlike some of our other criminal law. >> i agree with you. i do not think individuals who are guilty of wrongdoing should escape paying appropriate penalties. for our own parts, we are not
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allowed to put into place criminal penalties. that is a matter matter for the department of justice. for our part, we can when we find individuals to be responsible for wrongdoing, make sure they are not allowed to work at the banking organizations where they committed misdeeds. in many cases we can make sure they are banned from the business of banking. when we have been able to identify individuals who are responsible we have put in place the sanctions and will continue to do so. we always cooperate with the department of justice in their investigations. >> time has expired, the chair now recognizes the gentleman from north carolina. >> thank you chair. so does the federal reserve have the legal authority to implement
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negative rates? >> i'm sorry do we have the legal authority to? >> implement negative rates. >> so, this is a matter that the federal open market committee considered around 2010 and we didn't fully -- as we were exploring our options to provide accommodations, we decided not to lower interest rates either zero or into negative territory and we did not fully look at the legal issues around that. i would say that remains a question and we would still need to investigate more thoroughly. >> and one of our document request in a 2010 memo that i seem is connected to that policy
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raised significant doubts about the feds authority that they currently have two charge, to pay interest on access reserves and whether or not that same authority would allow you to demand payment for that. >> i don't know of any restriction that would prevent us from doing that. that memo indicated, was intended to indicate that the legal issues had not been seriously considered. >> have they been. >> have a been seriously considered since 2010. >> in the spirit of prudent planning, we always try to look at what options would be available to us if we need to tighten policy more rapidly than we expect or the opposite, to loosen policy.
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so we would take a look at it. the legal issues, i am not prepared to tell you if they have been thoroughly examined at this point. >> 's at this point it is unclear whether the fed does have legal authority to implement negative rates? >> i am not aware of any thing that would prevent us from doing it but i am saying that we have not fully investigated the legal issues that still needs to be done. >> so, let's move to regulations. you run the largest revelatory organization in the united states of america, perhaps in the globe, likely in the glow. as such, i believe in independence of the fed to make
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monetary policy but as a regulator congress should have significant oversight of your regulatory action should they not. >> yes. >> as such, as a matter of regulation the chairman raise this question the last time you are here about federal reserve regulators, bank examiners demanding to be a part of board of directors meetings. at member banks. you have exchanged multiple letters on this matter, we still hear that this is in fact taking place. would you pledge to this committee that you would direct your bank examiners and regional bank examiners to stop this practice? >> i will look into. >> you have already looked into it and exchange letters and give the chairman assurance last time. i'm assure you now aware that this is taking place. >> i think there are occasional situations in which that occurs. >> do you believe that's appropriate?
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>> i'm not certain that it is inappropriate. i want to get back to you on that. >> while this was raised about six months ago by the chairman, you exchange multiple letters. i would like to have some greater insurance that this is not meant to be a gotcha, this is a well warned question. we are hearing and in fact there's a press report that the fed directed one of your member banks to incorporate two additional members of the board of directors and the fed directing a private enterprise to change their board of directors seem somewhat perplexing. do you think that is appropriate authority for the feds? >> i think it is appropriate as a matter of supervision to ensure the board of directors of a financial company that we supervise is appropriately constituted in fulfilling its corporate governance functions. that is a part of supervision.
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>> time has experienced. we now recognize the chair lady from new york. >> you raise interest rates in december and said that any future interest rate increases that happened would be gradual. i like to ask you about the recent turmoil in global markets. as you know, equity equity markets around the world led by china have plunged since the beginning of the year, as a global economic growth has weekend. the u.s. has not been immune. the u.s. stock markets have fallen over 9% since the beginning of the year and treasury yields have plunged 23%. so my question is, as the turmoil in global markets changed your view about the
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appropriate pace of interest rate increases and hikes, or will you wait to see how global market turmoil affects the u.s. economy before raising rates again? >> we are are watching very carefully what is happening in global financial markets. it would appear that stresses that we have seen since the turn of the year relate to uncertainties regarding chinese exchange rate policy. there is uncertainties around the price of oil. we have not seen shifts that seem significant enough to have driven the sharp moves we have seen in markets there would seem
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to be increased to fears of recession risk that is resulting in rises and risk premia. we have not yet seen a sharp drop-off in growth either globally or the united states. but we certainly recognize that global market development bear close watching. as i mentioned the the financial conditions have become less supportive to growth and we recognize that these developments may have implications for the outlook which we are in the process of assessing. i want to make clear that monetary policy is not on a preset course. so our evaluation of the likely impact of those developments on the economic outlook as our
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ability to meet our employment and inflation objectives, those are the factors that will govern the future stance of monetary policy. it is is not on a preset course. >> given the turmoil in global markets and the slowing u.s. economy, some analysts are now talking about the u.s. a possibly falling into a recession this year. what would it take for you to consider cutting interest rates again? a severe downturn in the economy? or just stubbornly low inflation? >> well our commitment is to achieve our congressional mandated goals of maximum employment and stability. i do not expect the fomc is going to be soon in the situation where it is necessary
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to to cut rates. let's remember the labor market is continuing to perform well. to improve i continue to think many of the factors holding down inflation are transitory. while there's always some risk of recession and i recognize the global financial developments could produce a slowing in the economy, i think we want to be careful not to jump to premature conclusion about what is in store for the u.s. economy. i do not think it is going to be necessary to cut rates but that said, monetary policy policy is not on a preset course. if it turned out that would be necessary obviously the fomc
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would do what is needed to achieve our goals that congress has assigned to us. >> you said in december that you were surprised by how far oil for prices had and you expected inflation to increase once and oil prices stabilize. since the feds the december meeting oil prices have fallen further, up down about 25% since the december meeting and they have fallen 7% since friday. at the same time we have also seen inflation expectations evolve since the december meeting to the lowest level in quite some time. has this caused you to rethink your inflation projections at all? >> we indicated in our statement in january that these developments lead us to conclude that inflation will stay low for
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a while longer as these developments work through. clearly we are watching inflation expectations and i had mentioned market based measures of inflation, compensation compensation has moved down now to historically low levels. that is something we are evaluating carefully. in december when we raised rates we indicated that with inflation so far below our objective we would carefully watch incoming data advisor expectations. so i do not want to jump to a premature conclusion. my colleagues and i will issue in march updated projections for inflation taking all the evidence we have at hand into account. >> the time has expired. the chair now recognizes the gentleman from new jersey.
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>> thank you for being here. i would like to talk a little bit on emergency lending under 13-three. it was a year and half ago senator elizabeth warner myself, mr. -- joined together and sent you a letter. expressing our deep concern about what you were doing with regard to implementing the limiting language and frank at that time. of course you have come out now with a rule despite our letter that would basically allow the fed to drive a mack truck through the various loopholes and it and also once again as typical with the feds, lacking in clarity and transparency. that being said, that is not always not clear in what they want to do. the regulator is not always clear in what they want to do. for example, he came up with the vocal rule and the vocal rule
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the fed was not shy about elaborating on concepts and that statue. in fact it went so far to adopt prohibitions and trading accept that was clearly never intended by the statute. the fed and other regulators came up with this as part of the vocal rule just dealing with and defining what the words proprietary trading is, over 800 pages pages to make some clarity in the area of proprietary trading. compare that to what you did with under the limitations under dodd frank of 13-three. forty-seven pages of definition and lack of clarity throughout it. so the first question is, why in one area can you be exact and precise imprecision when you are trying to limit what the private market is doing but when congress tells you to put
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limitations on yourself you lack that clarity and just give it a broad brush? >> well i think we tried in the rules to be as clear as we possibly could. >> let's take a look at that. >> we for example. >> let me give you an example. the fed claims a rate under 13-- three. but but you fail to provide specifics what that rate would be. compare that's what congress did. this committee passed a bill would establish a penalty that would be commensurate with a distressed borrower. so i went the fed be clear on this? what are the rights going to be. >> because what a penalty rate is depends on the specifics of a particular situation. a penalty rate is a rate that when conditions normalize. >> we know what a distressed borrower is in the markets are, that is clear. why didn't you do find it that way compared to the
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regular markets so that a distressed borrower in the markets will be charged the same if their borrowing from the feds or related to it? >> and the type of situation that we found ourselves in during the financial crisis market rates had shot up to extraordinary levels because -- >> i understand the history of the market was at that time but you could have the provided clarity. so once again the fed is going to be in the position of picking winners and losers by a prior answer seems like you're saying you could charge borrower a1 rate a borrower be another rate under similar circumstances. is that correct? >> why think what is an appropriate rate does depend on the circumstances. financial crisis which is when we would be using this authority, set up a broad program are always very
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unique. >> and i think that is basically what you're telling us is that nothing really has changed this bite the law and dodd frank to put a limitation. it's not just me saying that. it's interesting that interesting that while you are here testifying today, the governor is also making public statement as you speak. we just got part of his statement and he seems to be saying exactly what you are is that you have not limited 13-three, but in simple language strengthening the regulation does not imply that the fire brigade should be expanded. he goes on to say that we are not seen the limitations that you are going to do the similar things that you did back in, before you are here. >> i want to make clear that i think are 13-three powers and ability to learn to keep credit flowing in the economy during a financial crisis is a critical power and we played a critical role. >> so is he wrong that he says
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nothing really changes, your powers are the same. >> know a lot has changed, congress put in place a series of restrictions. >> by your rules do not implement those. >> it does come our rule does implement those restrictions. we restrictions. we cannot lead to an insolvent borrower, we cannot land to help one or more failing firms. we can only put in place a broad based programs. we have defined pretty clearly in that rule what constitutes a broad base program. congress clearly change what the fed can do, it also gave up -- >> governor fisher says we've likely reduced but we have not reduce the probability to zero. it appears that you some of these members remain. >> the gentleman now recognizes the gentleman from new york.
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>> chairman, the unemployment rate is down to under 5% for the first time in eight years, however i remain concerned that unemployment rates remain elevated in the hispanic and african-american communities. does the fed specifically take unemployment within this group into consideration when making policy decisions surrounding the fed rate? >> so we track very carefully the unemployment rates and experiences of different demographic groups. we make a very careful assessment about whether or not the economy is needy of objective of maximum sustainable employment are not which involves taking in account
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factors like our particular groups being discouraged from even participating in the labor force because of conditions. it is important to recognize that our powers which involved interest rates affecting financial conditions are not targeted and cannot be targeted at the experience of particular groups. i think it always has been true and continues to be true that when the labor market improves, the experience of all groups does improve. roughly now the unemployment rate in the united states is close to where it was in the fourth quarter of 2007. now african-americans and hispanics at that time back in 2007 had higher unemployment rates than the population as a whole. regrettably because of the
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disadvantages that these groups face in the labor market they have historically tended to have higher unemployment rates. as the economy is improved and unemployment has come down the unemployment rates for those groups, for hispanics and african-americans have come down. they have fallen to roughly the same level that they are in at the end of 2007, while again remaining hires. so we do look at that but we don't have tools to target groups. >> you can see that 8.8% unemployment rate among african-americans today is too high? >> i do consider it too high. i think there are any number of reasons for that. i think the reasons for it are
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ones that congress should be considered broadly in designing for a wide range of policies. it is something that we want to see a strong labor market, we want to see continued progress and we will put in place policies that achieve that but we cannot target the unemployment rate. >> i heard you. as you know chair, u.s. employers have created 14 million jobs to under president obama's tenure. but the labor force participation rate remains low. people who want to work have stopped looking. how. how much of the declining rates can be explained by the trend of flat or wages for many american workers? >> so for the country as a
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whole, an important reason that labor force participation has fallen and will continue to fall is because of the agent of the population. that is not going to change in the trend is downward. it's also true that for certain subgroups in the population, for example prime age but less educated men the trend downward has been particularly steep. there is a of economic research that tries to understand why men , labor force participation has declined. it would not surprise me if wage trends are part of the reason for that. my guess is they have played a role.
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>> as it wages begin to increase, do you anticipate participation rate to increase as well? >> yes, i anticipate anticipate that wage growth will move up somewhat. i do think that labor force participation is somewhat depressed relative to where it will be in a full employment economy. that is why i say there does remain some slack in the labor market even though the aggregate unemployment rate is at 4.9 percent. >> the time has expire. the chair now recognizes the gentleman from texas chairman of our subcommittee. >> thank you mr. chairman. thank you for being here as well. part of your remarks about the state of the economy and think you're you're trying to paint a little rosier picture than maybe there is a little rosier picture but it's not a good pitcher. i'm
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looking at some stats here, we still have 16 million american citizens that are unemployed, the of number of long-term americans are higher than they were at the start of the recession. we have 94 million americans over the age of 17 that have abandoned the job market. real disposable income is at 1.2%. , the real gdp is going just under 2.2%. we have more americans living in poverty than ever before. and we have 45 million people -- i could read more more a think the issue is that i been thinking about this week is when you think about the original purpose the fed was formed for and what the fed looks like today and i think my good friend pointed out is that basically we
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have a fed that is in charge of monetary policy and some other things have been added to it and we have the fed that is the biggest and largest regulate shin assets than any other financial institution in the world. it reminds me that while you are working on one side of the fed to stabilize employment and keep inflation in check, then on the other side of the fed you have this huge regulatory structure that has grown substantially and continues to issue very complicated and some people think that you have become a micromanager of these financial institutions with the regulations. it reminds me of the statement that we have met the enemy and it is us. is it it counterproductive that you have a fed working on one side to create jobs and you have a fed on the other side of the building that is doing things
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that a lot of people think are killing jobs, micromanaging the financial markets, increasing the cost of capital which has stymied the ability of this economy to grow. so it is self-defeating. >> i think we have to remember that financial crises are immensely costly and it is important to make sure that we do everything, almost everything we can to reduce the odds of another devastating financial crisis. so, we are working hard, we have worked hard in the aftermath of the crisis to make sure that we have the financial system that is safer, sounder, has more capital, higher-quality capital, more liquidity, is less crisis prone than the financial system
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that we had that caused this financial crisis. >> a time is short, you mentioned the word liquidity and i think some of the things that the fed has done in some regulations have reduced liquidity in some markets. in fact we had conversations about liquidity. i wanted to see if you knew that european commissions is a review process, they set after five years of instituting all of these regulations and additional capital requirements and this piling on of regulation and capital, i'm not against having adequate capital but the problem is we seem to have an add-on game here and the additional capital also comes with additional regulations. so the european commission is initiated review process so it's go back and look. we know what we asked the entities to do, but the question
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is, how are the markets responding to this and basically it's a cost-benefit analysis of all the policies that are in place, has the fed thought about maybe we should stop and analyze what we have done here and see if it is possible. >> we have a few things that we still need to finalize, to put into place in the.frank regulations that were called for. we hope to complete that work soon. it certainly is appropriate to evaluate how the system is working. we do that on an ongoing basis and i think it is appropriate to see whether or not there are ways in which we can improve or simplify regulations. we are in the process of doing that, it's a very important area. >> time of the gentleman has expired. the chair now now recognizes gentleman from
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california. >> mr. chairman, i i feel like i'm at a ballroom dance on the deck of the titanic. the faith of the american people in our government and institutions is at an all-time low, i've been sitting in this room for 20 years and the room has the feel that it had 20 years ago except we don't have alan greenspan in front of us. government institutions work better if they listen to the american people, first because the american people will then accept the decision and second because we get better decisions. yesterday and a small state that is doing better than most of the country, two thirds of the people went out in a very record-setting turnout with inclement weather to say that they are mad as hell, particularly at the financial institutions that this committee deals with.
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two thirds of them voted for the most angry candidate they could find. too big to fail should be too big to exist. madame chairman, in response to the lady from wisconsin you said that it was basically the apartment of justice failure to have a single criminal prosecution of those who had wrap the banks and more importantly wrapped the american people. i wonder whether you can really just put that at the feet of the department of justice. we have learned that institutions can get so big that they are too big to fail. your predecessor was in this room demanding that we bail them out and god forbid you will be again if you allow these two big to fail institutions to continue to exist. and they're too too big to jail. as you point out, you may bar
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somebody from the banking world but in a country with more people incarcerated than any other country in the world, is it really adequate to those who steal hundreds of millions to say you cannot go back into the banking world. so i'll ask you as a member, we mean need world hazard to make sure that major economic decisions made by the giant banks are made correctly. they do not have a moral hazard in the sense of not been able to get capital, people are flooding them with capital that our rates that are said to be less than if there is not a belief that we would bail them out. the too big to fail will not be allowed to fail, as you point out. doj will not put anybody in jail. the solution is use your power to break them up. are you going to break up the two big to fail institutions? i've asked you that before and i will ask it again, i think i know the
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answer. >> will the answer i will give you is that we are using our powers to make sure that a systemically important institution could fail and it would not be and have systemic consequences for the country. we are doing that and a variety of ways, first of all we have done many things to diminish the odds that they would fail. we are trying to make them, i think i can enumerate. >> are you willing to call the attorney general and say we have got this thing handled so well that you can start criminal prosecutions because they are not too big to jail anymore? >> i said that i am in favor of going after individuals who are guilty of wrongdoing. >> with such penalties as
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borrowing them from the banking. >> i want to move on, those are the sanctions that the federal reserve. >> i need to move on to another question. your governmental entity, but it is in some parts of the entity is one bank, one vote. it is the only part of our constitutional system that puts governmental power in the hands of one bank, one vote. are you going to use your considerable power to oppose legislative efforts to try to make the regional governors appointed exclusively by the president and to make the regional banks subject to the freedom of information at? >> congressman, i think the current structure of the fed is something that congress decided after a long debate and weighing of a variety of considerations. i would say i think it has worked pretty well. >> excuse me, are you saying that that the fed, having just lived through 2008 with people
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not getting raises that this whole system has worked well? >> sir you are asking about the governance. >> the government nets has led to the decision that nearly brought this country to its knees. >> i you'll back. >> time for the gentleman has expired we now recognize a gentleman from missouri. >> thank you mr. chairman. it is interesting as you discuss all the questions that have been asked of you here with regards to your ability to micromanage the economy and as you make the decisions of the federal reserve to try to do something about on the climate, try to do something about the inflation rates, i look at some of these things and i'm kind of stunned.
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let's start off first with what happens if we had a downturn and you have 4,000,000,000,000 dollars on your balance sheet. what lovers are still allowed are available to you to do something? >> the fed has an array of tools. most importantly the path of the short-term interest rate. >> madam chair you are already down to almost nothing. how is lowering the rates going to help when it's down to almost nothing right now? >> well 11 of the ways in which markets work as they form expectations about what willette actively funds will be overtime. those expectations influence longer-term rates in the market. when the economy weakens market participants naturally expect the fed, and pursuing our
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mandate to follow a shallower path of interest rate increases and that shift in expectations moves longer-term rates. i think you can see just over the last several weeks as i mentioned longer-term treasury, yields have come down. as market participants have become more fearful of a recession. >> let me insert. are you saying that this is a good time then to start to reduce your balance sheet? lower interest rates would be a time to short shift that are you intended to do that? >> we have indicated that we want to make sure normalization is well underway before we begin to shrink our balance sheet. our decision to do that reflect the fact that we feel moving short-term rates is a more
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reliable and understandable and predictable way to manage the economy so we are going to wait to shrink our balance sheet until a point when short-term interest rates are somewhat higher. >> we may never get there is what were saying to there's not much room to go down. >> let me also go into your decision that you processed here. we have a labor market that continues to go down, yet we have according to report the hourly rate of employees when up. there should should be more incentive for people to work if they're becoming less. use the demographics of our country to indicate that. i'm concerned that if you look at those numbers that there is minimal ability for the way you explain the answer to this for you guys to be able to manipulate this.
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the second thing is, i am concerned what other factors you take into consideration when you look at your rates, for instance you look at what congress is proposing, you you look at the court decisions, there is been a big discussion about trying to stop the inversion, the ability of our companies go overseas and be able to take advantage of those tax rates. the discussion is to try to cut corporate tax rates to bring those dollars home. do you ever think about those sorts of implications when you make decisions on your rates? yesterday we had a dramatic historic decision of the court's that would have dramatically change the way, the cost of energy in this country. you take those things into consideration when you make those rates? those are dramatic increases in significant impact on our economy.
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>> we try to take into account in making our decision any factor that we regard as important. >> what you have in place right now some modeling in regard cpa rule? >> not that i know of. >> to have in place any modeling in regards to potential tax cut or bringing dollars home? >> we routinely look at the fiscal policy. >> do you have a model in place right now if we cut corporate tax rates that would allow you to make a decision on that issue? >> if if you were to decide that come our staff would attempt to evaluate. >> you don't have one in place right now is what you're saying. >> not to the best of my knowledge. >> the chair now recognizes a gentleman for new york. >> thank you and welcome. some of my colleagues may not of been here nine years ago, eight
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years ago but i have to tell you, i feel better today than when i sat here eight or nine years ago. i feel much better today than i did then, i can remember some of what was taking place now, the panic that was going on, the pressure that this government was under, though we not completely done what we need to do we need to make wages grow, we need to make sure that we create more jobs, that the position we are in, would you agree is much stronger then the position we're in a 2007 and 2008? >> will i believe it is. i believe we have made a lot of progress. recognizing at the same time that there are many households that are suffering on that there are a lot of challenges that people face. >> which i think it is important to acknowledge that how far we
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have come. then i would hope that we would also focus than on what else needs to be done. we do need to make sure, especially those individuals were victimized by the financial crisis. for for example if you look at areas and that i think it has been talked about particularly in african-american and latino communities, they lost a great amount of wealth. many lost their home, their jobs, so they need something so that they can get back. that's why you see this disparity that is very high right now. so it my focus is then is if we had and i guess because of what took place in the past, we passed a community reinvestment act. now the fed is in charge of cra and can't afford it. today what we find still is that individuals in these communities that were deeply affected there is no investment going in, no job creation there, no access to
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credit, because the primarily the crisis. what can and since the fed overseas and canon for cra, what are the fed's doing in helping to implement cra to make these investments in these communities as well as into cdf i who are focused on trying to make sure the kind of investment to make jobs. >> i think cra is extremely important in making sure that financial institutions, depository institutions serve the needs of their communities and particularly underserved communities. we take our enforcement and evaluation of
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banks, cre performance very seriously. we have a variety of community developments activities and programs that are forecast on working on our convening power in their cre applications to try to understand and identify what the needs are in a particular communities. and to try to tell banks what works, what kind of programs we are supporting that really seemed to make a difference in terms of illegal eating distress in low and moderate income communities. >> one thing is important and maybe you have the answer. show where the banks are making these investments income appliance with cra. what i have found his though numbers have sunk and then when i look at access to capital in these communities, you have about 70 million people now who are under banked or on banked in
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these communities. cra could help there. i would love love to follow up with you to find out exactly where the enforcement and who is compliant and giving and who's not. there has to be some accountability. lastly in at the few seconds i have the other thing that i think is important to look at some of these communities in today's world access to credit is absolutely key and essential. sometimes in a way people's credits are looked at there are alternative systems. for example people pay their rent every day on time is that not to be considered when credit scoring models? so are there other models that you are looking at in reference to how credit scores are considered? >> i'm not sure about credit scores, i would have to get back
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to them that. >> the time has expired. we now recognize a gentleman from wisconsin. >> thank you mr. chairman. welcome. i want to take a trip down memory lane. i think think there's some rewriting of what happened in the crisis. a lot of people who bought homes and for lower income folks that is their investment. a lot of them lost their investment walking into the crisis. it's devastating to families. i know we want to look to wall street and there is blame there. but i think there's a little history when franny and fatty freddie didn't have anything to do with low-income verification, allowing folks to buy a home they couldn't afford. and dodd frank, that was passed for my friends across the aisle franny and freddie were not touched at all. they were allowing folks to get home that they could afford and they were hurt. the regulators had wild authority and power, they
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failed. instead of taking a look at regulation and regulators we read empowered regulators. so no wonder that big banks after dodd frank haven't gotten smaller. big banks have gotten bigger. the small community banks that i'm sure service folks in this room and in my community, they they are going away. a big problem. a lot of things said but as chairman of the oversight committee i do have some concerns about your willingness to comply with our request. we sent a letter for the investigation and our oversight of the fed asking you for information regarding communication. no compliance. compliance. then we sent you a subpoena in may, you do not comply with that. a partial compliance in october. we are not one year after my initial letter.
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i have asked you for excerpts from the transcripts in regard to the discussion an internal investigation on nelly. you have not provided those to me. is your intent today to promise that i'll have that if not this afternoon, tomorrow? >> congressman i discussed this matter with the chairman and indicated that we have some concerns providing these transcripts i said with providing transcripts given their importance in monetary policy. >> and i received a note back from chairman last night quite late indicating your response to that and we will consider it and get back to. >> i don't want you to consider it. i think the chairman would agree with me.
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this is a conversation not about monetary policy, this is not market moving stuff. this is about is about the investigation and the conversation of a leak inside of your organization. so this institution is entitled to those documents, would you agree? >> i will get back to. >> notes. >> i believe we have provided. >> that is not my question for you. >> if i am not entitled to it can you give me the privilege that you are going to exert, that you're going to let me know why i'm not entitled. >> i set we received well after the close of business yesterday a letter explaining your reasoning. i will need some time to discuss this matter with my staff before i give you a final answer. >> i sent you a letter a year ago on february 5. i had to send you a subpoena. you knew i'm looking for these documents and that i would ask you about them today. so if you're not going to give me the documents, exert your
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privilege. tell me your legal authority why you are not going to provide this to us. if this is market moving i would be sensitive to that. this is not monetary policy conversation. this is about the internal workings and i'm not asking for all of the transcripts, i'm just asking for the experts specific to our investigation and oversight of the pets. let me ask you this, you get to oversee banks. if you make a request to a bank for information a year ago and they say let me review with my board, let me talk about it, but they never comply with your request for documents or information, what with the fed to? >> i think we have complied reasonably to request. >> i am asking you what would you do if you made that kind of request of a bank that you oversee, what would you do? >> we work with banks to make sure that we have access to the information. >> i cannot imagine what the fed
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with do if someone did not comply with your request. and guess what were entitled to the documents, we expect to get them and less you exert a privilege and there is no privilege that you have. i. i expect that they'll come back. i you'll back. >> for what purposes the ranking member seeking. >> ask for unanimous consent for clarification on the part of information that was just given. >> does a lady have a parliamentary inquiry. >> the inquiry could be considered parliamentary. i understand understand with a gentleman saying that they subpoenaed the feds and it was ignored in effect. >> the gentle lady is not stating a parliamentary inquiry and i think as the ranking member knows the time of the chair is limited, if other members wish to pursue that in
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their questioning others may. the chair and now recognizes the german from texas. >> thank you. i think you for meeting with our committee today and your steadfast leadership. at the federal reserve. america has made great progress since the financial crisis in 2008. a recovery include 70 consecutive months of job growth, the the longest streak in our nation's history resulting in 14 million private-sector jobs created. also unemployment rate under 5%. however, we continue to feel the hangover from the financial crisis started during president george w. bush second term. today, the slower than average economic is feeling and
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weakening confidence. additionally our economy appears to be failing in the strong headwinds caused by the growth in the developing world. dual effects of plunging oil prices. >> ..
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>> >> to create a lot of jobs in the employ of the rate in the growth of the economy is is consistent with that. to see what that implies that output is growing at say weak pace that productivity growth is very disappointing since the
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financial crisis. >> just as they set out to become full contributing members of the workforce and economic tension? to make a situation that faces this country over the long term is something that congress needs to address with the debt to gdp ratio looks like it should be sustainable for a number of years as the population ages with the cbo projections. this is something congress has done about for decades and it is important to
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address. >> to raise the minimum wage expand the safety net to provide more progressive tax code what steps are you taking to the historic level in the united states? >> and debbie contribution given that we don't have policies in the labor force. to obtain maximum employment objective. and it is further to go to make sure that we stay on the course of further improvement in the labor
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market. with every it will continue to result. >> your time has expired. chair yellen good to see you. the latest stress test scenario includes further rate on treasuries drops below the second quarter of 2016 through 2019. in this document that it does not have a forecast with the federal reserve
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because it comes at a time when the european central bank rand of japan with the dash interest-rate policies. let me make one other point it may suggest it is not opposed to reducing the target rate should economic conditions warrant. and with the two will of the impact. he told the committee in november if there was to deteriorate into viet coated
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january so assuming for a minute the fed figures out the question of legal authority do you still believe dash rates are a tool in the toolbox can you assume there would not include this scenario? if you're not a potential future action? >> and with the scenario of a number of the ec gore the bacon japan with interest-rate is way off the yield curve. we have had periods of market stress were we see a
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flight into u.s. treasuries as a safe haven the scenario that we ask the banks to look at where they go dash. this is something that could potentially have been without the fed with a negative interest rates it could happen in we have seen that for limited periods of time. >> has been kicked around. a quick question on the authority so back in 2010
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looking for ways to have accommodation is sending to be looked at. as a preferred to all. in to work in the institutional environment but very little had changed but in the spirit of prudent planning in light of european experience we will look at the end we should look at. but to know what could potentially be available.
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could the could they be compatible? we have not determined that. >> i think the central banks in japan and europe to over compensate for fiscal policy. can we avoid this a mistake in the united states to get our fiscal house in order? do you agree if we address the long-term structural problems with mandatory spending we decrease the potential need for monetary policy actions of reverse course of interest rates? >> it is desirable for the long run stability and growth of this country and with the stance of fiscal
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policy. >> we recognize the gentleman from georgia. seven i have a lot of respect for you but i vehemently disagree with you when you say you cannot target unemployment. it is very important for everyone to know you have an equal mission. part of that one half is to curb inflation. the other half is an employment. so a just dash shirley s. you target inflation with movement of magistrates you have to understand that save authority to deal with the unemployment.
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nobody is suffering from unemployment like the african american in committee. because of the laissez-faire attitude that the fed historically has dealt with with employment altogether. but 4.5 and employer rate of those african american men between the ages of 18 and 37 and in some communities like chicago it is severing that 50 percent. now read you have a devastating situation there is no other agency to deal
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with that as the fed. but in order to deal with delicate the economy like it is a real. and in this age group is 26 because it has historically downplayed in employment. had you seen fit to have an african-american president of regional federal bank for the federal reserve? we're not even a part of the conversation.
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i want the fed nobody is better equipped and that most pliable age europe between 18 and 37. can you imagine if that was the employer rate? all hell would break loose right now. the we need that same compassion. and agriculture. to rebuild the infrastructure and for african-americans to go into
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these areas to earn as they learn. in agribusiness we have the 19 colleges end to take the money we give them to the farm bill to teach research why not create the other spending category? tsa please to put the issue of african-american and plated on the front burner. that is all the domestic issues what is there for
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them? that is why we have so many of the situations. and have 1.2 million of them sitting in the prisons of above to work with you on it bin to take the employee mitt mandate seriously. >> would you consider an african-american for the first time in history for
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the first time in history? >> it is our job to make sure every search resembles a broad and diverse group of candidates since they are hurting to increase the consolidation.
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and what you consider to be the negative consequences if any they play a vital role to groups of borrowers that larger banks could not serve. this is the vital role throughout the community. with ways we can reduce the burden on those banks in some of the things with of
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regular meetings with community bankers to address the burdens that they face to simplify regulation. >> madam chair and you think it is important often for community banks can you identify areas for reducing burdens on community banks? >> we have been focusing on the duration of the on-site reviews to have them spend less time on the premises.
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with the reexamination request with extensive training what the regulations or proposals are relevant are not intended to share the concerns with the regulatory burden to take the steps that we can.
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we meet that is composed of we meet with them twice a year to discuss concerns to put forth said detailed plan whenever the debt limit has increased we receive the president's budget request of the 19 trillion of 2.5 trillion yen it was roughly
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$10 trillion in you have moisture concerns of the impact to fail to raise the detriment but i am curious as to have similar concerns how much debt is too much how much is on current policies it will rise from their present level 100% of gdp and continue rising murder you draw the line with the unsustainable economic situation.
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for those on the budget deficit issues. >> fit chair recognizes the gentleman from texas. >> 84 appearing today as a well. there has nominate conspiracy among the congressional black caucus members of black unemployment. although we do talk about it among ourselves quite regularly. and not enough talk with power of public policy with
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reference to african-american unemployment. so in your statement given a specific reference to african-american and employment? i apologize if i missed it but if there is a specific reference? >> i referenced in answer to our previous question during high rates of unemployment african-american persist even with the current aggregate. >> if you are an agreement it is a serious problem i would ask you may give up part of your statement and to say those of us to make a
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difference here in congress we have a responsibility but if you would make it a part to publish this with a meaningful impact on policy makers up bin down the line. that will make a really big difference. >>. >> you have indicated the taylor rule is a grave mistake and detrimental to the economy and the american people. can you give that is a nebulous term. >> sometimes it provides recommendations for what
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monetary policy should be and clearly overlooks important circumstances. >> would you kindly explain the impact on the economy if called this to do something inappropriate? that would result in much higher unemployment than is desirable or alternatively circumstances in which it would have been accommodative policy to result in extremely high inflation. right now that taylor rule of overnight short-term interest-rate close at 2.5%.
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and needed to hold the fed funds rate for almost seven years at zero% to achieve progress we have made it is highly damaging to the economic situation to provide analysis and why that is with the idea because of the damage from the financial crisis. >> tavis reclaim my time. i have one additional thing i must say. >> we have people that are visiting today i don't want to a response from them but
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to a knowledge their presence we are concerned about wages across the board as the impact on working people. and it is our policy to have greater employment and greater opportunities to target those that are hurt the most. >> your time is expired. >> custodians do not make loans are engaged in investment baking in have well little credit risk.
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with those millions of beneficiaries with the court's custody services to worsen under a period of stress. with the regulatory reforms without leverage ratio they typically put cash received on deposit with the fed coming from pension funds and endowments however it doesn't recognize of the deposits to reject the customer cash deposit. you aware of the impact and what you propose to do about it? >> this is something of consider the appropriate treatment with the
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supplementary with the leverage ratio was and only the main capital tool in a crude type of way with the requirements on the overall size of the balance sheet and for that reason it should be included. in to put in place a capital surcharge with the u.s. banking organizations ended is likely once those are in place it will be the binding capital requirement.
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but we have heard of the problem. >> as you know, jerry allen with increased spending to follow close on the heels of the european central bank it would also launch monetary stimulus in march sweden and norway denmark china may follow suit. and it was argued that this gimmick will not create the intended effect it only served to divert attention from the actual problem of growth in the u.s. and around the world. to constrain long-term growth. what you say in response? >> there are factors that have restrained growth for
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rising inequality and to take steps to address those problems it is important to try to achieve the mandate with the state of the labor market for people who want to work in with those such aberrations said existed in europe with very high unemployment it inflation is well over a decade is the objective. . .
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>> with a coal miner i talked to last week was taking care of five-year-old, three-year-old and a one-year-old will 1-year-old will not be a pay the mortgage. i wonder when the economic history is written are they going to say the fed tried to do its monetary policy what should have done with fiscal policy. >> i think it is also important for congress to address
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structural factors that are holding down growth. >> the time has expired the chair now recognize the gentleman from missouri, raking member member of housing and insurance committee. >> mr. chairman thank you for being here. following through some things that were said earlier, i have a bad knee and i've had it operated on 11 times. the weird thing is that whenever i go to the hospital for another surgery they never operate on my shoulder my fingers. for some strange reason they always operate on the same knee that has been hurt. i know it's weird, the issue is we cannot address on employment in a certain sector by saying we can operate on the whole body and it gets better.
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that has never been true, now i differ a little for my colleagues and that i do not think it is your responsibility and i don't think the fed has responsibility with a dual mandate. i think it is to be handled legislative and i don't think we're going to get that done. the other thing i have to say is i just have to get off my chest, because i do think we are declaring minority unemployment to be to curtail. that is somewhat troublesome. the wall street and the big six banks are too big to jail. you rob a convenience store you'd go to jail, you rub 300 million americans, you get a cocktail. i think that is what is creating all the anger around the
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country. i know you don't run the justice department. i know you don't vote on legislation that could address some of these other issues. but i think we have to set as much as we can because i don't think the world is hearing us. now i would like to yield the remainder of my time to the ranking member of the financial services committee. >> thank you. as you know, originally i was thinking about dealing with the issue of the subpoena. but if you don't mind i'm so focused on all of this money that goes to these too big to fail banks and trying to understand number one not only the fact that goldman sachs got 121 million, j.p. morgan
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910 million and that with the rise in interest rates from a quarter% to have% this will double. this money is going to the big banks as a subsidy from keep them from lending money. we have this big need that is been discussed by my colleagues about this high unemployment rate and the lack of creativity and thinking of how we can deal with this and these banks too big to fail who we are fighting every day because of the predatory lending etc. are getting support from the feds. please explain that. >> it's an essential tool that we need to adjust the level of short-term interest rates. from the standpoint of the taxpayer our payment of those interest on reserves, we have very large reserve balances, we
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have two and half trillion dollars roughly of reserves in the banking system as compared with 20 or 30 billion prior to the crisis. the counterpart of that on our balance sheet is that we hold a very large stock of assets of which we are earning a substantially higher rate of return then we are paying to the banks. that differential between what we earn on our holdings of long-term treasuries and securities on the 25 or 50 basis points we pay to the banks, that differential all shows up in the taxpayer packets. it is money that congress can use to address all of the problems that you have discussed. last year we transferred $100 billion because of that.
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big if we don't pay interest on reserves and must use another technique to adjust short-term interest rates likely we will be forced to greatly shrink our balance sheet and a rapid fashion. the total amounts of money going from the federal reserve to congress will be significantly diminished. in addition to that it would have very adverse effects on the economy. >> well i want you to know that not only am i concerned, it looks like we are about to have some bipartisan concerns on this issue. while i understand the argument that you are making about the big banks, we cannot feel sorry for them in terms of the amount of
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>> we are always trying to create a resound or system that is less likely to be subjected to the devastating financial crisis that we had and we are balancing that against burdens and to raise the cost of capital
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financial remediation. we have tried to strike a meet reasonable bowl balance remember the financial crisis nothing resulted in more harm for a longer. of time than the financial crisis that we live through. i think we now have a much they for financial system. >> another study by the american action form found that availability deteriorated 12 - 14% since the passage of dodd frank. i'm also concerned that the growing number of borrowers unable to access affordable banking, bank financing, a lot of borrowers from districts and low income areas in my district, these are hard-working americans that have that are turning to high cost and on regulated online lenders to be able to get the access to the credit they need. whether it's purchasing a carter
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or's starting a small business. their ability ability to access this credit is unavailable to them. i'm wondering if you share my concerns about credit availability and higher cost alternative. >> i do share your concern about credit availability. i think it's a clear that credit availability has in particular segments has been diminished, home loans, mortgages for example for individuals without pristine credit ratings is really difficult and remains difficult to obtain. part we have regulations that are meant to address harm so i think lending standards were too easy prior to the financial crisis. we don't want to go back to lending standards that are so loose that they lead to the kinds of predatory lending and harms that we have that took a
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toll on the economy and on low income households and communities. we need to achieve a reasonable balance and where searching for that. >> being on the subcommittee of monetary policy and wanted to ask a question on monetary policy what's happening in europe. what are the implications paid and may have stepped out i don't know if you addressed it. the implications of your being financial instabilities on the american financial system. what are the the implications of the federal reserve and the ecb? >> the ecb has been addressing high unemployment that slips a very meaningfully below their 2% goal by putting in place negative interest rates and large scale programs.
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the u.s. has done better about advanced economies. we have divergent monetary policies, it has put pressure on the dollar over a long period of time which has harm to manufacturing. it has resulted in negative influences on a part of our economy. >> the time has expired. we now now recognize the gentleman from missouri,. >> thank you mr. chairman and thank you for being here the federal reserve has a congressional dual mandate to seek maximum employment while limiting inflation. to limit inflation, federal reserve raises interest rates which slows the economy by discouraging people from borrowing to buy homes and cars and discouraging businesses from investing. with this reduced demand, businesses will hire fewer workers and as a result workers
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will have less bargaining power meaning they will be less likely to get paid and pay increases. the decision to to raise interest rate is based on the assessment of the open market committee and the federal reserve. about whether inflation or unemployment poses a greater threat to the american economy. unfortunately the members of the fomc largely come from the financial industry and as a result they tend to be more concerned about inflation than the population as a whole. and less concerned about unemployment. so how do we square that? >> so first of all i want to say that the committee is deeply focused on unemployment. we have two objectives not one.
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maximum employment and price stability which we have interpreted as 2% to 2% inflation objective. i would really take issue with the idea that we are not focused on achieving our maximum employment objective. we are. monetary policy has been highly accommodated. the fed funds rate was at zero for seven years. we also have a large balance sheet that has provided a lot of additional accommodations. so we are not talking about tightening monetary policy, we have an economy that now is made substantial progress creating 13 million jobs with the unemployment rate down to 4.9%. we took one small step to raise short-term interest rates and we continue to have an
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accommodative monetary policy which we see consistent with further progress in the labor market. so it is not that we are trying to reverse progress, we continue to see, even with modest increases in interest rates further progress in one would achieve a precise because we think all the unemployment rates that levels probably normal in the longer run and remains flat in the labor market. >> i don't want it cut you off but we could get to 4% unemployment. while we are pleased to see that new jobs are continuing to be created in our economy and to learn that unemployment rate last month fell below 5% broadly, these positive signs may lead some to ignore the persistent economic challenges faced by african-americans in
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this country. the current on employment rate for african it americans remains that nearly 9%. it is a commonly accepted view that access to gainful employment is one of the most important factors in supporting economic mobility and improving health outcomes. it is also widely known that in areas with higher rates of unemployment there is a lack of consumption, increase crime rates, reduce school funding and reduce political influence. please discuss with us any specific actions that you have personally taken or directed your staff to take to identify solutions to help remedy the historical and continued racial disparity between employment opportunities for african-americans and whites.
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>> so our staff produces statistics that are among the most important in documenting and highlighting disparities in the economic situations in terms of assets and incomes by demographic groups. i personally given speeches highlighting those statistics. so our staff certainly looks that and does work to document those disparities. in our community development programs and work we discussed earlier that is an area in which we have the capacity to try to identify particular programs that will be helpful in low and moderate income communities that
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suffer from special disadvantage in the labor market. also to try to identify programs that work that we encouraged to be adopted on a broader scale. >> the time of the gentleman has expired. >> i would like to work with you more and that. >> the churn out recognizes the chair from north carolina. >> think mr. chairman. i'd i like to welcome those who have come today with your t-shirts on, what recovery, whose recovery? the three pointed in clear statement and i commend you for being here and seeing this process. the reality is this recovery is most dismal we have ever had from a recession in recorded history. we look at the realities of this recovery, this last report of new jobs was only 150,000 new jobs. we have a 2% dismal economic
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growth. we have the people who the demographic group is the lowest recovery is the low-income minority people in the country. that demographic group has moved up the ladder less than any other group albeit an intense effort, well intended i'm sure by the obama administration through it but we have seen is very accommodated policy, we've seen obama care, the highest corporate tax rate in the industrialized world. all of this is achieved, its dismal dismal recovery. i would say to you the contrast is back in the 70s we had the same type of dismal economic outlook, high inflation high
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employment and we reduced rick latorre environment to reduce the tax and the economy took off. we were creating 200,000 jobs a month. one month, 1 million jobs. we are growing 6%. it seems to me that logic may come in that perhaps well intended policies have had an adverse effects, adverse outcome of what was ever intended. i commend you for your work and what you have sought to do but it seems to me that these accommodating policies have contributed to where we are today. i would say that i would like to thank you in your remarks that you made reference to the fact that there are those available to work but not actively searching for work. you have also made reference to those who are working part-time and can get full-time jobs.
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these numbers are not included in the current unemployment rate of 4.9%. reality we are talking around 10, 11 or 12% of the stats that i've seen of real unemployment. with that not be correct? >> will measures of on employment are significantly higher, for example a definition that the deal was reached first two includes both of the groups you mentioned involuntary, part-time. >> real numbers are much higher than 4.9%. >> is not to say that these policies have contributed toward 4.9% unemployment. in reality in the real world it's far less. i think that should be understood by these wonderful people who have come that the types of policies that have been
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enacted and enforced the last seven years have worked against your interests. what grew the american economy were small businesses who could go give loans. the entrepreneur who are is the lifeblood of our economy can't go to a bank today to get that new loan because of compliance requirements. they are the people who create those new jobs. on top of that you have the burden of obligation of obama care and small business with it, their cutting jobs. so then they don't have to comply. what will grow your economy will create the job that you honestly want is an open market work companies can grow and not have an intense regulatory environment where through onerous environments placed upon them. i want to to encourage you with that reality that we can find that type of opportunity
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economy. i would say to you the regulatory rulebook has been a constant revision for the last six years. can you see the benefit then as a result of what we discussed in pausing this process in order to assess the community impact of this regulation that are having on the economy before we proceed further? >> we have several regulations we intend to put out during this coming year. in terms of the list of what was mandated by dodd frank it was made substantial. >> were seen that it needs to be done. >> time of the gentleman has expired. the chair wishes to remind members that we expect to excuse the witness is close to 1:00 p.m. as possible. the chair
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anticipates getting through four more members. the chair now chair now recognizes the gentleman from the super bowl champion denver bronco's. >> thank you mr. chairman. and think you are always for being here today. i was going to go off topic with with my first topic does a have all those broncos. the chair beat me to the punch. but i do want to talk about the overall conversation today. want to thank you and thank the federal reserve. i will start with a chart that we have on the board which is really shows what happened at the end of the bush administration when we went to 10% unemployment and under obama we are down to over less than half of that. that is your chart number two in your monetary report. the republicans do not want to let the facts get in the way of their rhetoric. because then chart number four
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shows that after some time and that's on page five chairman. wages are beginning to move up after we started getting people back into the job market. chart six, oil prices way down, charge seven, inflation, inflation, chart 13 well to income, disposable income topcoats a robust 3.5%. chart 15, household debt service way down. chart 20, mortgage rates down, figure one a page 37 unemployment down, looking at the long-term and core price inflation even. those are your charts. those are the facts. now have wages gone up as much as we have seen, no but we had to get a lot of people back working. now are starting to see them move. so the chair went through a whole list of economists because he didn't have a lot of
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questions you want to list a lot of names. there there is a couple guys there with the hoover institute, so herbert hoover grand old republican president who let us into the great depression. not the kind of economy i would like to see. george bush, we go from 5% unemployment to 10% unemployment. we lose millions of jobs. under brock obama it went back down to 4.9% in colorado we are at 3.5%. i just want to thank you and think the administration for getting this economy back on track. now can we do better? you bet. how would you suggest we do better, how this economy can get moving so that people here can see real growth in wages which i think are beginning to appear. what would you suggest? >> so our objective in terms of what we can do is to try to make
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sure the picture that you have put up here shows continuing improvement in the labor market i agree with you, i state that signs of wage growth increasing, they are tentative at this point, there some hopeful signs but i think if the labor market continues to progress, we are very hopeful we will see faster progress on wages. we will try to keep that progress growing, that's our objective. objective. inflation is running under 2% objective. i expect that will move up over time as well with appropriate policy. i i appreciate you saying that some of the burden should also be on congress and others because there's so many problems in the labor market in particular groups and we have talked a lot about african-americans and the problems they face, the fed of course has a role to play but
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job training, educational programs, programs that address other barriers in the labor market, i think this is congress' job to address. productivity growth is very low. i think congress has always had a role in supporting basic research, making sure the infrastructure of our country is adequate and putting in place programs that make sure training and education are widely available. >> let me move to a stop soft spot in the economy. we talked about it before and that is oil and gas. the fact that saudi arabians are pumping like crazy and to appears to be an oversupplied market causing the price to drop. in some ways it's very good for all of us because it saves us
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ten, 15, 20 bucks a week or month at the price at the pump. it is also causing job losses in the manufacturing sectors as well as gas and transportation. can you comment on what the fed is doing a reviewing when it comes to oil and gas production. >> we're taking in account of what you said the energy sector is very hard hit. we are losing jobs there but with respect to employment although there really are very severe losses it is a small sector of the workforce overall, we are seen massive cutbacks in drilling activity. that is rippling through to manufacturing generally where output is depressed.
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so it is having negative consequences. on the other hand if you look at the difference in oil prices now relative to 2014 for the average american household, were looking at a savings of $1000 per year. that is boosting consumer spending. spending. we have these two negative force, positive forces, were trying to factor all that in. >> the time for the jonah has expired. the. the chair now recognizes gentleman from illinois. >> thank you. thank you for being with us today. as you know the financial crimes enforcement network is in the process of terrorism financing -- only fully support efforts to curb terrorism financing it seems nonbasic severe areas may not be appropriate. i understand
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that my staff is already talking with the fed about this issue, i wondered if i could get could get a commitment from you today about trying to find clarification if these rules apply to premium finance companies that are subsidiaries of bank. >> i'm sure we're happy to work with you on that. >> thank you so much. >> when you testify before the committee in november 4, 2015 we discussed the impact of the supplementary leverage ratio on custody banks. at that time you described it as a backup ratio that works as a backup to risk-based capital stander. when responding to questions earlier today you stated that when the supplementary becomes effective it will likely become the binding capital requirement for some custody banks. understand some of these custody banks already feel they must discourage customer cash deposits. as you note the institutions have high liquid low balance sheets that support finite. in light of this concern will affect consider adjusting the capital requirements for excess cash deposit held at the federal
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reserve? >> i'm not sure if they will become the supplementary issue will become the binding constraint or not. i did not intend to say that it is the binding constraint. there also be so-called capital surcharges that will come into effect that may make those binding constraints. i made this as a matter that i understand what the issue is, we can look at it and discuss it. it was debated at the time. there were considerations on both sides and a decision was made to include fed deposit. something we can look at and consider. >> i hope we are able to discuss that and also look to see if it's necessary for us to have congressional intervention as far as legislation to change the rule.
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let me move on. i'm pleased by the news that the federal reserve has been engaged with the insurance industry capital rules of property for the business of insurance. what are the thoughts on the how that is proceeding and when we could see proposed rules for public? >> were working very hard on that. i don't have an exact timetable. we are expecting to go out to each of the firm's notice of proposed rulemaking so the public can react to these rules. the staff is fairly far along in developing these. my hope is that it will not be too much longer. we have worked hard to have the appropriate interactions with the firms and the regulators to do this right. >> i appreciate your work on that. from illinois insurance is important we have wonderful companies there i know they have questions i appreciate appreciate the interaction.
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hopefully relatives solution quickly. will the federal issue propose capital rule? >> i'm not positive. i think for the particular cities that has been designated and metlife they are likely to be firm specific rules but i'm not positive. let me get back. >> there'd be great. thank you. >> i have an additional minute i yelled back. >> the gentleman yields back. we now recognize the gentleman from minnesota. thank you mr. chair and ranking member. as as we start off i also want to thank some of the folks have joined us for the hearing today. a good friend ron harris is here from minneapolis. i want to let you know this active citizenship of coming to the series, watching things, is
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exactly what is needed in order for this government to function properly in my view. in this is what democracy looks like. you may point your attention to the words of mr. neri anna who is the former chair and outgoing in minneapolis. on martin luther king day he wrote a blog and this is what he said in part, there is one key source of economic difference in american life that is likely under emphasized in the affluent sea deliberations, race. he went on to say that he search through the transcript of the meeting for the year 2010, his first year on the committee and
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a dire year for african americans and our labor market and that year a total unemployment right exceeded 9.25% every quarter but for african-americans that exceed 15.5%. today white unemployment in minnesota is 2.9% as of december 2015, the black unemployment rate is 14.1%. in minneapolis white unemployment is 4% but overall black unemployment is a shocking 18.9%. so i say that because this is something that needs the attention of the chair, i don't know what constraints you believe are out there but people, race matters when it comes to how people experience our economy. if we don't discuss it we won't ever get to the heart of the matter to fix it to make equal justice for all.
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so i guess my question he set as well as we all know too well race matters, the average effort can americans experience is different than that of the average white person. my question is what you make from the, turn from the previous and any abuse or adequate discussion and attention of the economic situation within affluent sea deliberations? if there's not an isis backed you'll say, what can we do that, how can we focus the attention on the segment of our fellow americans. >> it is of course important that we look at different groups and particularly those who are suffering the most in the labor market. i am surprised that there was no
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specific mention of race. in 2010 unemployment rate was substantially higher than it was. the committee was the committee was very focused at the time on what could be due to promote a stronger labor market. i suppose because our tools are not ones that can be targeted as particular groups in the labor market, it was clear what we needed to do and that was to support a stronger labor market more generally. >> forgive me for the interruption i definitely think that and i get that part, but i want to talk about now. how can the fed get the affluent
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sea to say not all americans typically african-americans are experiencing this upsurge in economic activity. for black americans were still in the midst of a very serious depression, recession. what can we do about it and again i'm not here to say just to wake my finger about what happened, we know what happened and it wasn't right. but what's happening are what can happen what can you tell me. >> i think you're right that we should pay adequate attention to how different groups are faring in the labor market. we have made clear that we don't focus on a single statistic, that the unemployment rate is only one measure of what is happening in the labor market and it is appropriate for us to try to do a much more detailed of where things stand and what we should be aiming for. >> the time has expired. the chair chair anticipates calling
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upon two more members. then we will excuse the witness. the chair now recognizes the gentleman from kentucky. >> thank you. and thank you for being before us. the last time you're here we talked about a qualified clo concept in your kind enough to respond to that question in writing. i want to thank you for that. i want to thank you for recognizing the qualified clo concept could be considered a positive development in the market. i like to continue our discussion about the role that regulation could very well play in terms of being a source of economic instability particularly in our capital markets. the bobble committee recently committed a rule in january that increases the capital held against exposures in the bank trading by up to five times the amount required under bobble three. as well as the final rules. one
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industry study suggested that trading and u.s. asset-backed securities will become uneconomical if the rule is not tailored to fit the u.s. marketplace. if it is uneconomical to act as a market maker for commercial mortgage-backed securities, auto loans, credit cards, then banks will pull out of the abs market which represent a $1.6 billion source of consumer lending. my question to you is how will the fed ensure the final rule will be tailored to fit the u.s. market which is the most liquid abs market in the entire world? >> i will have a careful look at that. i am i am not familiar with all of the details of the
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proposal. anything we implement in the united states there is nothing automatic that is implemented in the united states. we will have a careful look at what the impact would be. >> i appreciate you doing that and i continue to urge the fed in your particular is a member to look at government regulation as a source of economic instability. to that end, we're told by many of the regulated bank holding companies that there is no updated organizational chart within the fed. my question would be could you share with us or can staff share with us a detailed organizational chart with the names and titles of the bank supervision regulation full process rational staff. >> i think so. the organization as i'm told whatever organizational chart you have is very dated. so we can can even get many of the folks can't ask a question. >> yes. i don't see any reason why we can't. >> i appreciate you doing that.
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switching gears to the consumer financial borough and their funding source, transfers from the federal reserve system are capped at 618 million for fy 15 and the transfer is estimated estimated to be 631 million for fy 16. given my time is scarce if you could just answer the following in yes or no responses. does the fed approved the bureau's budget? >> we fund. >> but do you prove it? >> i think the answer is no. >> can you veto specific allocations requested. >> i don't think so. >> does the fed have protocols of the barrow seeks to transfer more than the cap on its transfers under the formula?
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>> to have a protocol to prevent that? >> we have by by the law, i need to look at the details of what her obligations and limits are. i need to look at that more fully. >> we like to know. >> and we have protocols to abide by. >> so this is a problem that we have is that we do not have appropriations control over the bureau. so they get their funding from you and would hope that they would at least be accountable to u.s. the funding source. is there any direct oversight of the implementation of the bureau's budget bureau's budget by the fed? >> no. our inspector general has authority both for the fed and for the bureau. the fed does not have authority over the budget and spending. >> my last seconds you talk to
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about the need for congress to address the long-term debt and deficit crisis. this seems to me of five alarm fire, wise of the fed, given that mandatory spending is 70% of the federal budget, weiss and the fed more aggressively warning congress that it must reform mandatory entitlement spending? >> every fed chair that i can remember us, told told congress that this is a looming problem. it has serious economic consequences. i know my predecessor has, i have have on many occasions, certainly remember the chairman discussed with congress the importance of addressing this. >> thank you. >> the time has expired. >> thank you mr. chairman. i want to thank you chair for not only your leadership in general but your participation
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in with his hearing. i want want to welcome our visitors and guests here today and thank you for bringing your important message. we do talk about how her unemployment rate has gone down substantially which it has, below 5% now but we all know when you get behind those numbers there's only two types of jobs, high skilled high paid jobs, we need very specific skills in advanced education to get those and low skill low-paid jobs. what were not creating this middle class jobs. the chair test on something very important which is infrastructure. there's nothing we can do as a country to help adjust that problem or the rebuilding our country. if i could ever edit your t-shirts i would sit let our wages grow, rebuild our our country. i think it would make a difference in raising wages. my question for the chair, in
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december when the decision was made to raise the federal fund rates, in your testimony you said that was in part based on a view that economic activity would continue to expand at a moderate pace and labor market indicators we continue to strengthen. certainly based on the top line data from 2015 and where we saw good gdp growth at a decent level, not a where would like them but at a decent level, even when you take into consideration the negatives from the oil and gas sector, the outlook for economic growth was reasonably solid in the labor market data must have been good because the january numbers were encouraging. my question is, a a lot has happened since that decision.
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that tends to change behavior. when you look at the same data you looked at when you made that decision in december, if you look at that data now does it change your view as to your perspective on economic activity, economic is generally where market trends? >> i think the answer is may be but the jury is out. we have continued to see progress in the labor market over the last three months there have been 232 jobs per month averaging through. gdp growth slowed in the fourth quarter. my expectation is that it will pick up this quarter, but on the other hand financial conditions have tightened considerably and that can have implications for the outlook. what the committee said in
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january we have previously said that we regarded the risks to the outlook for economic opportunity and the labor market is balanced. what we said in january was we are evaluating and assessing the impact of these developments on the outlook for both the labor market and activity for inflation and the balance of risk. that is what we're doing at this point. >> when you look at recent data that you get better than anyone about credit information and borrowing activities in the markets, are you concerned there's been a significant contraction in credit availability based on recent market activities? how much does that factor into. >> that is an important factor. >> have you seen it?
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>> well not really at this stage. but we do see is that spreads on lower graded bonds have widened considerably. barring rates have widened, not just energy, and our most recent survey of banks on their landing standards we have seen the tightening that is reported on will that certainly those continue to grow. that is something that bears watching. it is really those kind of trends that we need to evaluate. >> break quickly as you weigh your decision, obviously inflation labor market participation are critical, overall view of economic activity is critical.
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what is happening with credit availability, how important is that in your decision-making process? >> we are trying to forecast's spending in the economy. credit availability factors and to our forecast for both of those portions of the economy. they are not the only factors that matter, but they are a factor that is important and so we will be considering those, there is a number of weeks before we meet again in march, there's quite a bit of additional data we want to look at but you have pinpointed exactly the kinds of considerations that well. >> the time has expired. the ranking member is recognized for unanimous consent. >> would like to highlight the very important work the fed reserve is doing through the
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passports which you are a member. >> without objection i think every testimony today. without objection all members will have five legislative days to submit additional questions to the witness to the chair which will be forded to her response. i asked that you please respond promptly. without objections all members will have five legislative days to submit other materials for the chair. this meeting stands adjourned. [inaudible] [inaudible] [inaudible] [inaudible]


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