those joining locally, a few

reminders, once you start speaking there will be a slight delay on the screen. please click the mute button until it is your turn to ask questions. you should have one box labeled clock will show you how much time is remaining. the five-minute clock applies for your questions and 30 seconds remaining, you will hear a bell and it will ring again when your time has expired. if there is a technology issue, we will move to the next senator until any technology issue is resolved. senator toomey and i agreed to go by seniority for this hearing as we have in the past.

senator brown: renters see their bills pile up and bank balances dwindle wondering if this is the month that an eviction notice is posted on their door. more than four million people are out of a job. we are still fighting the coronavirus. nearly 500,000 of our fellow americans have died. we know we are facing two cries ease, a public health crisis and financial crisis. we know getting our economy back to full strength requires mobilization to get all americans vaccinated and vaccines alone will not put most

workers and their families back to where they were a year ago. we want people back to work and kids back in school and see main streets humming with life again. that requires federal leadership on a level we have not seen in this country since world war ii. was testified in this company, before d-day eisenhower didn't call roosevelt, do we have the money in our accounts. most people i talk to in ohio and around the country aren't worried about doing too much but worried about doing too little. they want to do whatever it takes. 85% of americans need vaccines. our front line workers need p.p.e. states, cities and towns need resources and support to open schools and libraries open and firefighters on the job.

experts agree the best thing we can do, the best thing we can do for the country is get resources to tackle these interconnected problems. janet yellen said if we don't do more we risk a permanent scarring of the economy and to the future. economists from across the political spectrum tell us that without strong fiscal support, our economy could spiral further out of control and take even longer, years to recover. our witness today jerome powell has expressed some of those concerns. after we passed the covid-19 relief bill in december, chairman powell said support from fiscal policy will help households and businesses weather the downturn as well as limit lasting damage to the economy that could otherwise impede the recovery.

he has talked to us about the rick of falling short, the damage it will do to people's lives. those were his words, productive capacity of this economy. president biden has risen to meet it with his rescue package and a plan to rescue the economy and save american lives. workers and their families need to see the government work for them and this rescue plan must deliver the results that empower people and make their lives better. we need to rethink our economy operates when a hard day's work doesn't pay the bills for tens and tens of millions of workers and middle-class families don't feel stable. we know that workers' wages have been stagnant. corporations get huge tax breaks instead of investing in their employees, management too often rewards itself and its share

holders through stock buy-backs. and it is getting worse and not better. many people have not recovered from the recession. it didn't happen by accident but result of choices made by corporations and loyal allies in washington. they rolled back consumer protections in our financial system cutting corporate tax rates and using wall street to measure the economy instead of the condition of workers and still people pushed this stock market view of the economy are the same people we should not go big and says there is no need for the government to help people and the market should decide who wins and who loses. the market doesn't work when the game is rigid. corporations have been lining their own pockets with plenty of government help and intervention. short-term profits are more

important than their workers. look what's happened in texas where an entering grid failed. people are literally freezing to death in their own homes in the united states of america. without any rules, energy companies can charge consumers sky-high prices and use automatic deb its taking thousands of dollars out of people's bank accounts. climate change causes severe weather patterns across this country. more investment in public infrastructure, not less. we need more, not less and not let corporate greed to stand in the way. our nation's central bank plays a crucial role. the federal reserve ensures the biggest bank to invest in their workers and lend in their communities instead of beginning up stock prices. the fed can respond to the financial and economic crises

that just doesn't help wall street but everyone and require institutions help ensure that everyone in this country has a bank account and access to their own hard-earned money and start to undo the rirble discrimination to red lining to jim crow and locking in discriminatory practices and make workers the central focus. chairman powell said the benefits of investing in our nation's work force is immense. steady employment provides more than a regular paycheck but bestows a sense of purpose, benefits workers and families. what that boils down to is the dignity of work and means no matter who you are and whether you punch a clock or work for tips or a salary or taking care

of aging parents. we need to start measuring success of our community by the success of the people who make our economy work. chairman powell, i look forward to your testimony. senator toomey. senator toomey: thank you chairman powell. i look forward to your testimony. about a year ago, the u.s. economy was in a contraction that followed the shutdown of covid-19. credit markets seizing up and second quarter g.d.p. last year fell by over 30% and unemployment rate reached 15% in april. the economy was in very diss par ate streets. long drawn out depression appeared to have been unfounded. congress and the fed took

unprecedented and decisive action. the fed lowered interest rates. and helped facilitate market function through a variety of programs that were funded through congressional legislation and we in congress passed over $4 trillion in relief over five overwhelmingly bipartisan bills. we are nothing like in the situation we were in last spring. today the unemployment rate is 6.3% about where it was in july of 2014. 18 states have unemployment rates below 5%. the average household is in a better financial position today than it was in before the pandemic. personal savings rates are up. consumer credit is down by over $100 billion. there is no question there are some subsets of our economy and

society that have been hit much harder than others. but in the aggregate, the fact that americans have more disposable income now than before the crisis. congress is in deliberations to spend another $1.9 trillion with universal payments to people who never had as much income as they do to entities that have a state and local governments which in the aggregate have taken in more revenue in 2020 than ever before. we are well past the point where our economy is collapsing and our economy is growing very power flingly. and we should recognize all of this comes at a cost, it all gets funded with government debt which has its own dangers or a burden that gets passed on to future generations. in 2020, debt held by the public

reached 100% of our total economic output and over the next 10 years net interest costs will amount to 4.5 trillion and that is without another $1.9 trillion bill. there is a real danger that we have overheating in places that need to junk wanted inflation and the data is pointing in that direction. keep in mind we have $11 thrillion in personal savings deposits. the country is in accelerating reopening as the number of cases are declining. the economy is poised for very substantial growth in the near term and the fed continues to purchase $120 billion of securities per month and maintain short-term interest rates at basic zero and congress is considering another enormous bill. and another matter, i want to make the point that it is very

important for the fed to continue focus on the mandate it has and not to broaden that mandate, as issues such as climate change and racial inequality are not the purview of the central bank. i look forward to hearing your views on the economy, on monetary policy and state of our markets. and i yield. . senator brown: we will hear from jerome powell. it is nearly one year since the coronavirus pandemic first wreaked havoc. the federal government makes sure that our economy recovers for all americans. chairman powell, thank you for being in front of our committee today.

proceed. powell powell >> it depends significantly on the course of the virus and the measures undertaken to control the spread in the resurgence of covid-19 and deaths in recent months is causing hardships for millions of americans and weighing on economic creativity.

the weakness concentrated in the sectors mostly affected by the resurgence of virus. number of cases has been falling and ongoing vaccinations hope to return to normal conditions later this year. however, the economic recovery is uneven and the path is uncertain. household spending remains low insectors that require people to gather closely in leash and hospital. household spending in goods picked up in january after moderating late last year. the housing sector has recovered. while business investment and manufacturing production has also picked up. the overall economic activity since last spring is due to

unprecedented fiscal monetary. as with overall economic activity, the pace in the labor market has slowed. over the three months ending in january, employment rose at an average monthly rate of only 29,000. continued progress in many industries has been tempered by significant losses in industries such as leash and hospital, where the resurgence in the virus and increased social distancing have weighed further on activity. the unemployment rate remained at 6.3% in january and participation in the labor market is below pre-pandemic levels. there has been progress, millions of americans remain out of work. as discussed in the february monetary policy report the economic downturn has not fallen equally on all americans and those least able to shoulder the

burden have been hardest hit. it has been severe for lower waged workers and african-americans and other minority groups. the dislocation has upended many lives and created great uncertainty about the future and left a significant imprint on inflation following the large declines in the spring. prices rebounded. however, for some of the sectors that have been most adversely affected by the pandemic, prices remain particularly soft. on a 12-month basis inflation is below our 2% longer run. developments point to improved outlook for later this year. ongoing progress in vaccinations should speed the return to normal activities and we should follow the advice of health experts to observe social distancing measures and wear

masks. i'll turn now to monetary policy. the committee completed our first ever public review of our strategy tools and communication practices. we undertook this review because the u.s. economy has changed in ways that matter for monetary policy. it was to identify imprompts to our policy framework that could enhance our ability to achieve our maximum employment. the review involved extensive outreach to a broad range of people and groups. as described in the fib monetary policy report, in august the committee adopted its revised statement on longer run goals and monetary policy strategy. it shares features with its pretty ceasor. we have not changed our longer run 2%. we did make key changes. regarding our employment goal,

maximum employment is a broad and inclusive goal. this reflects our appreciation for the benefits of a stronger labor market particularly for low and moderate income communities. we state that our policy decisions will be informed by shortfalls of employment from its maximum level rather by deviations from its maximum level. this change means we will not tighten monetary policy solely in response to a strong labor market. we will seek to achieve inflation that following periods when inflation has been running below 2%, monetary policy will aim to achieve it above 2% for some time. with this change, we aim to keep longer term expectations well anchored at our 2% goal. it enhances our ability to meet

our employment and inflation goals in the low-interest rate environment in which our main policy tool is more constrained. we have implemented our new framework as noted in our january policy statement we expect it will be appropriate to maintain the current range of the federal funds rate until labor market rates have reached maximum employment and inflation has risen to 2%. in addition and treasury security and at their current pace until substantial further progress has been made toward our goals. thinks purchases and the associated increase in the balance sheet have eased financial conditions and providing substantial to the economy. and it is likely to take some

time for this to be achieved. we with will continue to communicate our assessment of progress toward our goals well in advance of any change in the face of purses. since the onset of the pandemic, the federal reserve directly the support of flow deploying our emergency lending powers to an unprecedented extent enabled by financial banking and support from congress and the cares act facilities are no longer are open. we understand that our actions affect households and businesses and communities across the country. everything we do is in commitment to use our full range of tools and the recovery from this difficult period will be as robust as possible. i'm happy to take your questions.

mr. powell: the main thing we can do is to continue to support the economy and give it the support it needs. we are 10 million jobs below the level of payroll jobs before the crisis. there is still a long way to go to full recovery and we intend to keep our policies supportive of that recovery. senator brown: thank you for acknowledging in your comments to many of us and public comments about how much we need to do to fight racism and increase diversity. the fed's monetary policy has benefited wealthy people. we talked about earlier from red lining to the subprime mortgage crisis, targeted black, brown

and other communities. it is clear the fed's policy and failure to regulate have contributed to the racial wealth income and home ownership gaps. you said the fed's tools can't address the inequality. i think you give up a little too easily. how can the fed use its supervision authority to enforce discrimination laws and fight racial injustice and income and inequality. mr. powell: we have policies under a number of statutes and take those responsibilities very seriously and carry them out robustly and that is an important part of our mandate. and so that is something we can do and i think we do adepress i havely. in addition to our consumer

affairs division and through the federal reserve banks, we don't spend public resources but try to attract private resources around initiatives that i will will address issues in low and moderate-income communities. senator brown: i think we can do more, but we will discuss that later. bank regulateors have loosened capital requirements and one of the changes the fed stated, was to allow banking organizations to expand their balance sheets to continue serve as financial intermediaries rather than allow banking organizations to increase. they reduced capital standards so banks would lend more not that they would pay dividends. the biggest banks have gotten larger and profitable but hasn't

increased lending. will you promise to the committee that you will not extend any exemptions for capital requirements for banks and bank holding companies that have continued to pay dividends rather than invest in the real economy? mr. powell: we are talking about the temporary measures that we took with the supplemental leverage ratio and those expire at the end of the month of march and have not decided what to do and we are looking into that right now. i'm not going to commit to connecting that decision to the payment of dividends as a separate matter. we intervened to require the banks to limit their dividend growth to zero and also limit their share buy-backs and the result is a banking system that has higher capital than it did going into the pandemic and particular particularly for the

largest banks and where the banks have taken large reserves against losses and so have proven themselves pretty resilient. senator brown: perhaps. we also understand they have not been supporting the real economy to the agree we have hoped they would. and i will send a written question to you on climate that we wanted to talk about. senator toomey. senator toomey: let me just say i certainly hope that to the extent that banks vr adequate capital for the circumstances that they face at any point in time, any capital beyond that should absolutely be available to be returned to the people who own those banks in the form of dividends, stock buy-backs or anything to the contrary is a terrible constraint.

if i could summarize and characterize your opening comments about the economy, it is fair to say there are many senthors of our economy ta, housing a good sector. and we have very concentrated problems in certain sectors like hospital travel and entertainment are distressed. if there were to be further fiscal policy, it should address where the problem is and not where the problem is not. but to address monetary policy for a moment or so, i think the fed's current forecast for growth of this is over 4%. the consensus is 5% and some

thinking it could be higher. the unemployment rate is 6.3% which was in 2014 where we weren't contemplating multilaterally dollar bills and we weren't buying securities per month. the last two recessions were i think caused by bubbles that burst. 2001 it was the stock market. 2008 it was the mortgage credit market. monetary policy contributed a great deal to the formation of those bubbles. there is a link between the record of amount of liquidity being pushed and these asset valuations that we are seeing be commodities. across the board, we are seeing quite elevated prices.

so i guess my question is do you believe there is a linching between the liquidity that the feth is providing. mr. powell: there is certainly a link. if you look at what the market is looking at, what markets are looking at, vaccination, fiscal stimulus. savings accumulated on people's balance sheets and expectations of higher corporate profits. there are many factors that are contributing to what's happening in -- mr. powell: all of those things are happening. all of those indicators of growth and indicators of rising inflation as you know.

and inflation is from 2%. my point is that at some point, we've got too much liquidity going into the system. the economy is recovering very well. problems are isolated and should be addressed narrowly and i hope $120 billion of bond buying doesn't become a permanent situation. one of the things i was concerned about. increase in inflation and full employment, what would that imply is a very applause able snar yeoh. what does it imply for the bond buying program? mr. powell: what we said is it will continue at the current pace, at least at the current pace. and we have also said that as we

monitor that progress we will communicate well in advance of any actual decision of purchases. so that's what it will take us for to moderate the level of purchases. we haven't been making for the last three months but expectations that will pick up as the pandemic subsides. senator toomey: i would suggest there are a lot of warning signs and blinking yellow. with that, i would yield. senator brown: thank you. senator menendez. senator menendez: at the end of this pandemic we need to have a more equal society. we are not on a path to an equal recovery. as of january, the plaque unemployment rate is 9.2% and hispanic is 8.2 compared to

7.2%. over the course of the pandemic, the plaque labor force exit rate has increased dramatically while the white labor force has returned to pre-pandemic levels. doesn't this mean that the black unemployment rate is misleadingly low compared to the white rate? mr. powell: well, as you point out this pandemic particularly bad for these long standing disparities that we have in our economy. the job losses were heavily concentrated in public service sector jobs and lower paid and in many cases, minorities and women. that's where the big pockets of unemployment remain. and you are right. the burden has fallen more in

the low and moderate communities. this particular event is precisely aimed and we are aware of that. senator menendez: we know from the bureau of labor statistics, the labor force participation rate for plaque men and women fell for nearly twice as much as it did for white men and women. you agree that minority families are bearing the brunt of the damage caused by that pandemic? mr. powell: yes, those at the lower end of the spectrum. senator menendez: addressing this diss proportionate damage needs to be accustomed. as part of the federal reserve's mission to ensure maximum

employment, what is the plan for maximizing employment for low-income and minority workers? mr. powell: when we say maximum employment that are means we look not at the headline numbers but different groups and try to take that all into account. so we will take into account the headline numbers but also those for other groups as we think about reaching maximum employment. senator menendez: i shope in your mission that the federal reserve looks at this because federal reserve studies show high-income jobs recovered to pre-pandemic levels, unemployment among low-wage workers are 14% below pre-pandemic levels and this is despite of the fact that almost half of low-wage workers are

essential, people who let us stay home when we were told to stay home to avoid the spread of the pandemic and to be infected that they were risk their lives in the jobs that they did. i believe we have the tools to try to make this an equitable recovery. will commit working with the congress to help low-wage workers to be able to recover just as longly as others? >> we will do that. monetary policy as a tool is famously effective tool. it doesn't allow us to target particular groups. it lifts the entire economy but will be mindful of the disparities that exist as we make our decisions. senator menendez: as of february 1, estimated 13 million adults were not caught up on their rent and 10 million were not caught

up on their mortgage payments. our country is in the midst of a housing crisis, what would be the effect on the housing market and overall economy if congress doesn't provide initial resources with families struggling to pay rent and mortgages? mr. powell: if those people -- if it were to get to the point that people are evicted and talking about people's lives that are being disrupted that are hard to recover from both for renters and owners. the single best thing we can do is to keep monetary policy and do what we can to speed the recovery so it will be robust and complete. senator menendez: millions of people losing their homes would not only rateable bases and single aspect of wealth. thank you, mr. chairman.

senator shelby: good morning. chairman powell, thank you for your service for a number of years and done an outstanding job as chairman of the federal reserve. i would like to associate myself this morning with a lot of the questions that have been asked already by senator toomey, the concerns of inflation and balance sheet, where is the economy going when we get over this covid, which we all hope and pray will be sooner than later. and i would like to add to that, mr. chairman, what's your view of the world economy tying into ours which is an important factor as we go forward, assuming in the next six months that we get a happened will around covid in the country and

europe does the same thing? mr. powell: i'll take those one at a time. on inflation, let me say we do expect that as the -- couple of things. first last march and april drop out of the 12-month calculation as we move forward, we expect readings on inflation. that will be a temporary effect and won't signal anything. more importantly, with all of the factors we have been discussing, you could see spending pick up substantially in the second half of the year and that would be a good thing and could put upward pressure on prices. and i would just say that essentially, it doesn't seem likely that would result in very large increases or they would be persistent. we have been living in a world for a quarter of a century where

all of the pressures were disinflationary. we averaged less than 2% inflation for the last 25 years. it changes over time but don't change on a dime but we don't see how a burst of fiscal support or spending that doesn't last for many years would change those. i would also say forecasters need to be humble and if it does turn out inflation and pressures arrive and persistent and we have the tools to deal with it, we will. on the balance sheet, we are going to continue -- we are at a stage with 10 million people, payroll employment is 10 million below where it was before the pandemic. we will provide the support we

think the economy needs. over time, the growth of it will slow, but that decision is the one that we talked about earlier whereas et purchases will continue until we make significant progress towards our economy. i do think and once we get this pandemic under control, you know, we could be getting through this much more quickly than we had feared. but it is not done yet. the job is not done yet. we have to finish the job with the pandemic and get it under control so the u.s. economy can reopen. other countries have the same set of issues, but there is -- people will get vaccinated and get the disease under control, the second half of this year and after the economy could be very good and could be good elsewhere

around the world. senator shelby: the savings rate had gone up tremendously in america, does that bode well in the future as perhaps economic activity? mr. powell: a lot of that is people haven't been able to travel or go to restaurants and forced savings in a way. so they'll spend some of that going forward. you are thinking about the fact that the u.s. needs more savings so it will have more investment and more productivity. it would be nice if we had a higher savings rate and didn't have a lot of dissavings at the federal level. a lot of that is deficits require a lot of assets. this is not the time to be thinking about that. but that time will certainly come. senator brown: senator tester.

senator tester: i appreciate your frankness and your fight to keep the fed independent. i know it's been difficult over the past number of years but you stepped up. you don't want a bunch of politicians to determine monetary policy. i'm glad you are at the helm. i think we will have a debate over this $1.9 trillion in front of you on probably every damn committee that i'm on and a bunch of others. some of that -- all of that is necessary, but i do want to talk to you because everybody makes points and they say yeah, that's a good point. the housing market in places like montana and booming. and there is another problem that i want to talk to you about

the housing thing. there are folks who don't have the job they used to have and they never get that job back. and there are business people out there that are up against it. some of those businesses go broke and won't reopen and others will. i want to get your perspective if you were not the head of the ned but in the united states senate, where would you pay most of your attention to? because i agree, the money we spend is where it will do the most good. where is your focus? would it be unemployment? would it be hospital businesses or something more -- hospitality businesses? mr. powell: we are managing the business cycle in a way but what i would focus on is more than

what we call the supply side which is really investing in things that will increase the potential growth rate of the united states economy over time and that prosperity is spread as much as possible. it amounts to investing in people and that means education, it means training and all those things and that enabled those people to take part fully in our great economy. i do think in a depobal economy, people who are able to use and benefit from technology, there is no limit of the amount of people that can work in the united states because it is such a global economy. i think it is important for businesses as well that they have a climate where they can trust that inflation is going to be under control and business conditions are going to be good and can invest and i think the federal government investing in

basic science has produced. noke cussing on things that will make a longer run difference to our economy is what i would do. senator tester: i appreciate that. now i want to go to housing. i talk about montana but this is true. we don't have enough affordable housing or work force housing. i think short-term and long-term that this is going to be a drag on the economy. do you see the fed playing any role or do you think they could have a role in increasing the amount of affordable housing that is out there? and if you do think the fed plays a role, what would that role be? mr. powell: when it comes to a set of policies like that, that's targeting the fiscal power of the federal government to see what is a worthy cause. we can combat housing discrimination in lending, but

we aren't in a position to allocate credit to worthy beneficiaries. that is really fiscal policy. senator tester: getting back to the pandemic, you implemented a lot of monetary tools to end this crisis. in your opinion, have they been sufficient? and if they have -- that's the first question. have they been sufficient?

addressing the pandemic. my question for you is, as we see another $1.9 trillion on top of the $6.5 trillion that we already spent -- what is the impact on the issue of rising inflation in excess of the fed's longer run objective of 2% chair powell: as i said at the beginning, i won't comment on the proposal that you're mentioning, not our role. i will say, on inflation, there

perhaps was a stronger connection between budget deficits and inflation. it hasn't been lately. i won't say it will return. my expectation is that inflation will probably be a bit volatile over the next year or so due to a significant amount to things due to the pandemic. for example, we'll see a slight increase in inflation in a few months because of the -- inflation in a few months. we'll see, perhaps, we don't know that, we'll see upward price prices. i don't think those effects should be large or persistent. the reason is we had decades of well-anchored inflation expectations. meaning, we had a varied -- volatile economy. and inflation will do -- it didn't go up. >> thank you very much, sir. i appreciate your answer. the fact you're unwilling and unable to answer the questions as it relates to the minimum wage, certainly you don't want

to get into the politics of the $1.9 trillion package. i don't blame you. if i were i -- if i were i wouldn't get into politics. i will use my few seconds to say, the congressional budget office, some democrats, all republicans, all agree raising the minimum wage is a way to destroy jobs and an economy that's looking forward to a fragile recovery. thank you, chair brown. chair brown: thank you, senator scott. senator warner. senator warner: thank you for the good work you're doing. i think in response to senator tester's questions, when you were talking about the kind of investments we ought to be making that are long-term, thinking about infrastructure, one of the areas, and

understanding what my friend, senator scott, just said, you don't want to weigh in on the recent plan. i would like to you comment whether you believe that broadband investments fall into that category in long-term structural change we need? i would argue over the last 11 months broadband is a necessity. i think it's absolutely covid related. i hope the current package can be changed to actually include a sizeable investment in broadband. as good as our floor package is, bipartisan packages has been to date, the broadband investment has been meager or nonexistent. as for experts like tom wheeler and blair lemon said, we get about 97% along with better affordability. so i guess i'm asking, would you agree that immediate efforts to close the broadband gap not only

represents the -- represents long-term investments but also have some direct relationship to the current health care crisis? chair powell: as you and i discussed on a number of occasions, i would agree broadband's kind of a classic 21st century infrastructure. and one of the things that can support growth. but i, of course, can't go anywhere near -- don't want to go anywhere near to the question of what should be included in the package if that's ok. senator warner: what about the question, though, from a macroeconomic standpoint, broadband and trying to close the digital divide, if we're going to have a full recovery across all socioeconomic groups, could you speak to the question when the necessity for broadband, to be ubiquitous if we'll have that kind of robust recovery and comments about

whether broadband is at this point a nice to have or an economic necessity whether it's telework, heal health, tele-education? chair powell: as you and i discussed on a number of occasions, it's classic piece for the service economy, for the technologically advanced economy. having it broadly available just would -- could mean as broadly available as possible. it could be a significant benefit. senator warner: if not broadly available, are we going to be able to see the kind of broad-based recovery that i think we're all looking for? chair powell: well, i think we have a bunch of issues to deal with that relates to these persistent disparities that we see, to do with education and training and all those things. but that would certainly be one of those things. senator warner: senator scott,

in his previous line of questioning, raised the inflation issues. i know we've seen about a 41 basis point increase on some of our bench -- 10-year benchmarks. it's still relatively small. i tend to agree. i think we do need to make a sizeable investment right now. i'm not sure -- inflation risks i agree with you are not potentially as high as it can be. can you talk about if you started to see inflation rise at a level you wouldn't feel comfortable with? chair powell: well, those are the classic tools we have. again, i really do not expect we'll be in a situation where inflation rises to troubling levels. at this point, the committee -- federal market committee, is seeking inflation running

moderately above 2% for some time. so the real question is, as we go through this, are we going to find ourselves in a situation where inflation expectations are deanchored and inflation is moving up and is persistent? i think we're all very, you know, acquainted with the history of how we got into that situation in the 1970's. in the 1960's. we have no intention of repeating that. central bank and the fed learned how to keep the centrality of keeping inflation under control and we know how to do that. that's just by not allowing the economy to just ignore constraints over time. i think this is not a problem for this time as near as i can figure. if it does turn out to be, then we have the tools we need. senator warner: my last 20 seconds. i do want to make some general comments. i would argue that pandemic was

the first major real-world stress test we had on our fiscal system since 2009. how do you think overall the system has responded and recognizing, mr. chairman, it will be my last question, obviously. you may want to take that one for the question but if you can make general comments quickly. chair powell: the economic system. well, i think the large financial institutions that are at the heart of our financial system proved resilient. they did. they've been able to keep lending and their capital levels have actually gone up during this period. as i mentioned, federal liblg windity -- liquidity levels are -- i think the work we have done over the last decade and some have held up pretty well so far and i expect it will continue to. senator warner: thank you, mr. chairman. thank you, chairman powell. chair brown: thank you. senator rounds of south dakota.

senator rounds: it's good to see you again and appreciate your service to our country as well. thanks for being with used too. i first like to ask about the s.l.r. exclusion which is set to expire on march 31. my colleagues have mentioned it earlier, but did not really get into the heart of the matter. the temporary patch allowed banks to exclude u.s. treasuries and deposits at the fed from their balance sheets. this was important in preserving bank liquidity during last spring's -- common sense moved the fed can't go bankrupt and the treasury has never failed to meet its obligations. we all agree the economy is still in need of fiscal and monetary support. the chairman himself said banks should be doing more to help their workers and our broader society, but they want do that when we're trying -- when we're tying their hands with excessive and challenging capital requirements. it would appear congress is

going to create even more bottle next in our financial plumbing by flooding the economy with about $1.9 trillion in new money that banks will have to hold capital against as soon as the treasury starts writing the checks. my question is, would you agree that it makes sense to seriously consider extending the s.l.r. exclusion given the other measures the fed and congress are taking to facilitate our economy during the recovery? chair powell: so i do think the s.l.r. exclusion, i know it expires at the end of march, and we haven't made a decision what to do. it's in the middle. i just have to say we'll be making a decision and announcing it pretty soon here. senator rounds: the reason for my question is, i think last time around in the past we had challenges with banks that have come in and said, look, we have folks that want to bring their assets in. they have a place -- they have

to have a place to store it. it's liquid. it most certainly has. it's impacted our ability -- and the reason for the s.l.r. for the first place. you talk about it and as you continue to discuss -- and i hope we do keep an open mind as this amount apparently will be put into the economy in very short order. and so i simply bring it up as saying i think there's a lot of us that thinks it will be an important part of the discussion to have. let me read into another question for you, sir. we've been monitoring the increase in treasury yields from about .9% at the start of 2021 to 1.37% when the market closed yesterday. i understand this reflects a view of an improving economy but also comes with increased borrowing costs, increased inflation. and potentially a move by the fed to increase interest rates

down the line. how do you view the increase in treasury yields in the broader context of our economy at this point? chair powell: so, first, we look at a broad range of things and that's one. it's an important one. but really, we look at the whole range of financial conditions. it's very important to ask why are rates moving up? if you look at why they're moving up, it's to do with expectations of a return to more normal levels, more mandate consistent levels of inflation, higher growth, an opening economy, in a way it's a statement of confidence on the part of markets that we will have a robust and ultimately complete recovery. so those are the reasons that are behind it -- that are behind that move, i would say. senator rounds: great. look, we follow the markets. we follow on a regular basis whether the markets are moving up, moving down and so forth. i think in anticipation of

what -- the market was rather volatile. i am curious. when you walk into an opportunity like this where you're sharing your thoughts -- i know you want to be very careful in terms of the message that you send. and i think you do a very good job of being very careful in the way you send a message. but let me just ask. in your opinion, when you prepare for this type of a discussion, knowing the markets are literally watching everything you say, what's the message that you'd like to send? are you talking we're going to have stability? it's going to be steady as she goes? we don't see changes coming up with regard to the availability of capital? we don't see changes that are going to impact inflation? what's the message that you really want to send as you share with us today and you're expected to be in front of our committees? chair powell: so i guess i'll say a couple of things. starting point is we're 10 million jobs below where we were

in february of 2020. 10 million payroll jobs. there's a long way to go. many of those jobs are concentrated in the lower end of the income spectrum, as i mentioned. many parts of the economy have recovered. in the bottom your til -- 1/4 tile -- quartile, it's probably 20%, unemployment. we put forward guidance up, both on our asset purchases and our rates. we think that forward guidance is appropriate. and we're going to -- you can expect us to move patiently over time, as we see better data coming in. we had three months of 29,000 jobs a month. it's not much progress. we expect progress, we had very fast progress, we expect that will begin to return in coming months and expect us to move carefully and patiently and with a lot of advanced warning.

senator rounds: thank you, mr. chairman. thank you, mr. chairman. i apologize for going over on my time. chair brown: thank you. senator warren of massachusetts. senator warren: the wealthier are doing better and better and the poor are doing worse and worse. you have been vocal about inequality in the past few years. i think i have a quote here from you. it's been a growing issue in our country. and in our economy for four decades. you've talked a lot about how inequality undermines opportunity and mobility. and you've described it as something that holds our economy back. so i take it from these comments that you believe that inequality weighs our economy down and stunts economic growth. is that a fair statement? chair powell: yes, if is.

senator warren: good. and i agree with you on this. and the fed's own data spell out the problem. i think you were just talking about it. the top 1% of families last year received 20% of all the income in this country. and you think that's not good for our economic growth overall, is that fair? chair powell: well, i would say that the stagnation of incomes in the lower income area and also the low mobility that we've seen emerge, those to me are the two -- the two most important things that i focus on when i talk about inequality. stagnation of incomes and low mobility. senator warren: but we're talking about here income inequality, how much people earn each year to be able to pay the rent, to be able to put food on the table. but inequality also shows up in wealth. which is what families have over time. money in the bank, home, stock. wealth inequality is even more extreme in our nation than

income inequality. while the top 1% of families, this tiny slice, got 20% of all the income earned in the u.s. last year, the top 1% held 33% of the total wealth in this nation. and now this pandemic is making inequality worse. unemployment, as you just noted, is now at about 20% for the bottom quartile in this country. meaning, there are a lot of folks making the choice of keeping the heat on and food on the table. meanwhile, the wealth of america's 60 billionaires -- 660 billionaires increased by $1.1 trillion over the past year. inequality is felt another way. it's felt in how people pay taxes. 99% in america pay on average about 7.2% of their total wealth in taxes in a given year.

but the top .1% pay only about 3.2%. that's less than half as much. chair powell, does it increase inequality when wealthiest americans pay total taxes at less than half the rate of nearly all other american families? chair powell: these are -- you're getting farther and farther from the -- the kind of inequality we focus on and frankly anything we can do with our tools. we can't affect wealth inequality certainly in the short term. we can effect income inequality by supporting job creation at the lower end of the market. so i leave to you, those are fiscal policy issues i wouldn't -- i can't really -- that's all. senator warren: i appreciate you're trying to move sideways on this. you have pointed out that inequality is a problem in our country, that it holds back

mobility, that it holds back opportunity. and i simply am pointing out, that inequality is felt, not just through income. it's also felt in wealth even more so. and that our tax structure makes that inequality worse over time. extreme inequality undermines our economy, as you said. it undermines justice. it undermines our democracy. and our tax code focuses almost entirely on income and lets most of the wealth at the ultra-rich families -- that the ultra-rich families accumulated just slip right on through. that just seems to me not right. you know, it's time for wealth tax on america. a two cent tax on for turns worth more than $50 million. for turns over $1 billion pay a few more cents. this wealth tax will let us address the inequality that you have been very worried about as chair of the federal reserve.

it's how we have a chance to level the playing field and build an economy that works for everyone. so thank you for being here, mr. chairman, and thank you, chairman brown. chair brown: thank you, senator warren. senator tillis of north carolina. senator tillis: -- chair brown: if not, senator kennedy of louisiana. senator kennedy: yes, sir. can you hear me, mr. chairman? chair powell: i can, senator. you too, mr. chairman. senator kennedy: yes, sir. mr. chairman, what was our fourth quarter g.d.p. growth? chair powell: i'm reluctant to guess but it was in the -- i want to say 4%. senator kennedy: right, right. that's what my numbers show,

too. what do you and your economists estimating that our g.d.p. growth will be for 2021? chair powell: so we -- we'll be updating our forecast. the last forecast we did was -- the last forecast the staff did was in january. my guess is that the data had been more positive. it will be a good number. we would be in the range that you see in the public forecast. senator kennedy: how about 6%? chair powell: could be in that range. senator kennedy: at what point in 2021 will g.d.p., the level of g.d.p. equal pre-pandemic levels? chair powell: sometime during the year. could be -- senator kennedy: how about the end of january? or the end of february, rather? chair powell: i don't know that. you ask a question -- the pre-pandemic level or the

pre-pandemic trend? senator kennedy: the pre-pandemic level, if you froze the g.d.p., the economy in february a year ago, at what point will we be back to be february a year ago? chair powell: first half of the year. senator kennedy: i see a lot of economists saying at the end of february. do you disagree with that? chair powell: i can't be specific. i was answering the question about the pre-crisis trend. senator kennedy: well, here's where i'm -- what i'm getting at. you have strongly encouraged congress to pass another coronavirus bill, $2 trillion. i guess, tell me, if you could, in just a couple of sentences why you think we need to do that if we're looking at 6% g.d.p. growth this year and as soon as the end of this month we'll be back where we were in february,

2020? chair powell: senator, i have consistently not taken a position on this bill. senator kennedy: so you don't -- you don't have an opinion about whether we ought to pass president biden's bill? chair powell: as i said, since the december press conference, i think, on every public occasion when i was asked about it, i said it's not appropriate for the fed to be playing a role in these fiscal discussions about particular -- you know, particular provisions and particular laws. it's just -- we didn't comment on the tax cuts and jobs act. we didn't comment on the cares act. we just -- it's not our role. senator kennedy: ok. so your opinion is, if we don't pass the bill, you're cool with that? chair powell: that is -- that would be expressing an opinion. that's not what i'm not doing is expressing an opinion. senator kennedy: well, would you be uncool with that? chair powell: i think being cool or uncool, i would have to be

expressing an opinion. senator kennedy: ok. how do you think we ought to pay this money back on the money we have already borrowed? chair powell: i think we will need to get back to a sustainable fiscal path and the way that has worked when it's successful is you just get the economy growing faster than the debt. i think we're going to need to do there and that's going to need to happen -- that doesn't need to happen now. now is the wrong time doing that. senator kennedy: do you think we ought to go cat woman on the budget and actually look for savings there? chair powell: go cat woman? i don't know that reference. i think in the fullness of time, we will need to right size our budget relative to our -- so that the economy is growing faster in nominal terms than the -- than the debt will have to, eventually, on the path we're on. senator kennedy: well, do you think that deficits matter?

chair powell: certainly in the long run i do believe they do. senator kennedy: you don't think they matter in the short run? chair powell: again, i think we will need to return to -- we'll need to return to this issue but i wouldn't return to it now. and the way to get after this issue is to get a situation where the economy is growing faster in nominal terms than the debt is. senator kennedy: what if that becomes the case but your spending is also growing faster than your economy? chair powell: well, no, that is the deficit. the question really is -- the deficit is a difference between intake and spending. it's the net of those -- senator kennedy: let me stop you, mr. chairman. because i will have one last question quickly. m-2, the money supply, is up i think about $4 trillion over the past year.

or $6 trillion. $4 trillion, $6 trillion. what's a few trillion? it's up 26%, the highest amount since 1943. what does that tell you? chair powell: well, when you and i studied economics a million years ago, m-2, monetary, generally seems to have a relationship to economic growth. right now i would say the growth of m-2, which is quite substantial, doesn't really have important implications for the economic outlook. m-2 was removed some years ago from the standard list of leading indicators. it's just that classic relationship between monetary aggregates and economic growth and the size of the economy. it just no longer holds. we had -- we've had big growth of monetary aggregates at various times without inflation. so something we have to unlearn, i guess. kenned knd thank you -- senator kennedy: thank you, mr. chairman. chair brown: senator cortez masto from nevada.

senator cortez masto: thank you, chair powell, for joining us. enjoyed listening to you in the conversation so far. let me talk about a subject you and i talk about which is nevada and the service industry, as we know, has been so hard hit. we have the second highest unemployment rate in the nation. in this type of labor market, there is no upward pressure on wages because when people are desperate for work, they're willing to take lower paying jobs. when the unemployment rate is low, employers are more willing to both raise wages to find workers as well as invest more in in-house training and retraining. can i just ask a question? how does a tight labor market encourage employers to invest in in-house training? do you have any thoughts or answers to that at all? chair powell: i do. as we discussed, in that last couple of years when unemployment was routinely below

4%, as low as 3.5%, and where labor force participation was high, had moved up, actually, despite expectations that it wouldn't, we saw lots of virtuous effects in the labor market. actually talked about those a couple weeks ago. one of those, i didn't focus too much on, you saw employers investing more in training. you saw employers looking for people at margins of the labor force. employers were going to prisons and getting to know people before they came out and giving them jobs as they came out. great things happening from a tight labor market. i just think we saw that. that's why one of the reasons we're so eager to get back to that consistent with also maintaining price stability. but we really do think and others saw the same thing. which is the broad societal benefits of a tight labor market. senator cortez masto: would you agree that congress' investment

in workforce development is helping that developing those skills for that workforce would be important? chair powell: i do. again, i want to comment on -- not entirely sure what you mentioned is in the current proposal, but i would say that that -- the kinds of investment in people that enable them to be more effective in the labor force, and policies that enable people to take part in the labor force, those are -- those are big things that can increase the productive capacity of our economy over time. senator cortez masto: i agree. that's why i introduced the workers act, pathways act. many of my colleagues are focused on this investment, particularly now when we have an opportunity to have a long-term impact on jobs. so thank you for that. i'll jump to just the unemployment in the service industry now. this is an area that i know we really -- we have to do more to turn this economy around in our

hospitality industry. but let me ask you this. if congress does not extend and bolster unemployment insurance, what is the federal reserve economic impact on communities like las vegas that are dependent on hospitality? chair powell: i won't comment on unemployment insurance, it's part of the bill. i will stay away from the current fiscal discussions. i have to do that. the single most important thing for your service sector employees is to get the pandemic behind us so people can get on airplanes and go to nevada again and take vacations. that's the single most important economic growth thing that we have. after that, i think they'll be -- it's possible that will begin to happen, you know, relatively soon if we can get the vaccines out and get people vaccinated and people do the right things with social distancing and masks and that kind of thing. you can see that happening relatively soon, which will be great.

senator cortez masto: you would agree there is an investment that still needs to be made. we are not done here at the federal level with our monetary fiscal policy in addressing the economic crisis we have. it's one thing to get the pandemic under control. it's another to understand how we turn this economy around as well. wouldn't you agree? chair powell: i would agree and so we, as i said, we will keep our policy accommodated. we think we have a significant ground to cover before we get even close to maximum employment. we hope to do everything we can to speed that process. senator cortez masto: let me say one final thing. because you said it's the pandemic that has hit state after state and individual communities after individual communities. i hope we do not shift about making investments when -- turnaround much quicker than others do. particularly in the service industry. no state should be left behind.

and i hope that we would all agree to that. that we need to pull everybody with us as we address this pandemic and start to turn the economy around. so i know my time is up. i will submit the rest of my questions for the record. [indiscernible] i know chairman brown had to get over to the senate finance committee to ask a question. so i am going to sit in his chair temporarily and i am going to go ahead and turn the gavel over to senator haggerty. thank you. senator haggerty: thank you, senator cortez masto. i want to say thank you to chairman brown and to ranking member toomey as well for holding this hearing today. as we work toward full economic recovery. and it's noted, this is an important part of congress' oversight of the federal reserve system. chairman powell, i want to thank you for your time and your participation today. more generally, i want to thank you for your leadership of the fed as we work our way through this crisis.

and i want to say this, mr. chairman, i'm very encouraged by the indications from the monetary policy report progress we're making as we come out of this downturn. we're looking at potentially north of 4% economic recovery. as you and senator kennedy were discussing, maybe even 6% growth for 2021. i find that very encouraging. albeit an eneven recovery -- uneven recovery, i feel it's very good news that's on the way. that also raises some concerns that i have and i'm sure it's been discussed many, many times about the amount of liquidity that we'll continue to pump into this economy. we have already allocated $4 trillion in coronavirus recovery relief. $1 trillion yet to be spent. now we're talking about putting close to an additional $2 trillion into the economy. i won't belabor this any more. it's been discussed by my colleagues. i share their concerns about injecting that much liquidity in the economy at a time when we're

in the process of recovering. particularly noting our tough and slow recovery after the 2008 recession given the amount of funding that was injected in the economy then. chairman powell, i'd like to shift gears for a minute. yesterday, treasury secretary yellen talked about the digital dollar. digital dollar that's overseen by the fed, tied to the technology, something she said will result in facer -- faster, cheaper payments. you and i discussed the dollar as it's a vital asset. i very much appreciate chairman powell your perspective on developing a digital dollar that will be -- directly by households and not remediated by commercial financial institutions. chair powell: thank you. so we are looking carefully, very carefully at the question

of whether we should issue a digital dollar. and it's something that banks around the world are looking at and doing so appropriately. the technology now enables us to do that and it also enables private sector actors to create their own kind of digital kwuzi-money -- quasi-money type of instruments. so there are significant both technical and policy questions to do with how we would go about doing that. i would say we're committed to solving the technology problems and to consulting very broadly with the public and very transparently with all interested constituencies as to whether we should do this. i would also say, we are the world's reserve currency. and we have a responsibility to get this right. we don't need to be the first. we need to get it right and so -- but this is something

we're investing time and labor in right across the federal reserve system. you may know the federal serve bank of boston has partnership with m.i.t. looking at one particular thing. we're doing research at the board. it does hold out the prospect of the things that you mentioned very positive. it could help financial inclusion as well. at the same time you want to avoid creating things that light be destabilizing or might draw funds away from the banking system. we have a banking system which intermediates between savers and borrowers. we want to be careful what the implications. high priority project for us. senator hagerty: i share the concerns. making sure that america does not fall behind in any respect in maintaining the world's leader in reserve currency. just a moment of time left, i want to follow up on a more technical comment that senator rounds made.

regarding the importance of looking hard at the s.l.r. exemptions. as we continue to move forward this year. i know that coming to an expiration at the end of march, but i very much appreciate your taking a hard look at that moving for because there is a tremendous amount of liquidity coming in. on inflation, you and i talked about the importance in japan about disinflation. at the same time i share senator toomey's concerns about the asset price bubbles that we're seeing already occur here in america and, again, i appreciate your role in taking a very steady hand in monitoring inflation and making sure we stay on top of it. thank you very much, mr. chairman. chair powell: thank you, senator. senator cortez masto: i will call on senator van hollen. i know senator brown is asking questions. i will pass the gavel to senator van hollen. thank you. senator van hollen: thank you, senator cortez masto. welcome, mr. chairman.

thank you for your service. at the outset, i just want to underscore the importance of the fed continuing to move ahead with the fed now service as we discussed in previous hearings. the united states is out -- the united states' outdated payment system is inflicting large and unnecessary costs on millions of american consumers, leading to billions of dollars of unnecessary funds spent. and this doesn't impact people with big bank accounts who are not close to overdrawing. it impacts those who are living paycheck-to-paycheck. i see the fed has accelerated its timetable a little bit. 2023. if you can move even faster, all the better. you'll be saving millions of americans lots of money in unnecessary costs. i want to focus my questioning on the issue of long-term

unemployment. and in a speech you gave on february 10, you pointed out that the unemployment rate would be close to 10% if you adjust for the bureau of labor statistics classifications and people that dropped out of the labor force since the pandemic. this includes over four million americans who are counted in the unemployment figures but are long-term unemployed. and millions more who have dropped out of the labor force during the pandemic. but would like to get back into the workforce. and you noted in that speech the concerns of percent cystent and damage from -- persistent and damage from long-term persistent unemployment and the impact on productive capacity for our entire economy. and you stress that monetary policy alone can't do this.

it requires the fiscal response. so here's my question. beyond the overall impacts that the bill before us or other fiscal responses will make in terms of increasing overall economic growth, based on your experience, would you agree to very intentionally develop policies to help the long-term unemployed, individuals who even during good economic times were unable to get into the workforce? chair powell: i do. and this really is a longer run thing. i would say it's particularly relevant now. as i also mentioned in those remarks, industries are always, you know, growing and shrinking and employees are moving from one industry to another. that's a market-based economy working. in this situation, you have that accelerated in a big way. and so many of the people -- we

may find many of the people who are not going back to work, or not back at work now, may really struggle to find jobs because businesses are being automated. we hear that all the time, computers and automated answers are becoming more and more common. so i think those people are going to -- really going to need help to get back in the labor force and get their lives back. so that will take, i think, the kind of investments you're talking about. senator van hollen: no, i appreciate that. and we're talking about a focus and an intentional investment beyond the investments that we're making for overall economic growth, right? chair powell: yes. senator van hollen: and i'd also want to turn really quickly to the importance of using the right kind of economic measurements to determine the well-being of american workers and families. as you noted in that same

speech, unemployment among low-wage workers is 17%, where it was at the start of the pandemic. where as among high-wage workers it's down 4%. so you take the average, you're not -- you're not seeing the disproportionate impact on low-wage workers. i'd often give the example that if jeff bezos had moved to baltimore city last year, the per capita income of baltimore city would have gone from $53,000 per person to $175,000 per person. even though nobody was better off individually. so what should we be doing? what is the fed going to be doing to make sure that as our economy improves, which we all wanted to do quickly, we don't overlook the continuing pain

people are feeling because we're looking at averages and not looking beneath those averages? chair powell: these people who are struggling in that way are doing so because they were employed in the public facing jobs in the service industries. so clearly the number one thing we can do to get them back to work is to get the pandemic behind us. that's not something we can work on here at the fed. that is -- that's the top thing. beyond that, i just think it's up to us to continue what we can do to support the economy. really with some patients. in order to -- so that they'll have time to get across. we talked about a bridge. most americans will have a bridge. but there's a group that will really struggle. i think we need to be mindful of them. really, they did nothing wrong. this was a natural disaster. as a country, we set out to provide support. senator van hollen: i appreciate that. i hope as the fed releases its numbers going forward, in

addition to the aggregate average numbers, you also continue to provide us with the impact on lower-wage individuals. thank you, mr. chairman. senator tillis. and if senator tillis is not with us, senator loomis. -- aluminum miss. -- lummis. if senator lummis is not with us, i'm told that senator tillis will be joining us soon. senator moran. senator moran: thank you, mr. chairman.

mr. chairman pro tem. and chairman powell, thank you for the opportunity to visit with you today. and thank you for your work at the fed. just a broad question. how do you view your job in relationship to an administration? so a change in administration from one president to the next, what does that mean at the federal reserve, from your perspective? anything or a lot? chair powell: well, our job doesn't change. and at the very beginning of the administration, our -- the personnel don't change. of course, the one way that administrations really do interact importantly with the fed is with appointments. and so those will happen over time. but -- and the second thing is, it's a different group of people. we have ongoing relationships by long standing practice with various parts of the treasury department, mainly, but also to a much more limited extent with

the white house and we make new relationships and continue to have the same sorts of discussions that we have. to answer your question, nothing really changes because of the election other than meeting new people. senator moran: dharm, thank you. -- chairman, thank you. during the senate banking committee i have been advocate for an independent fed and want the fed to make decisions based upon best policy without significant political interference other than perhaps the senate banking committee. anytime we can take that opportunity. let me ask a specific question. the most recent monetary policy report to congress, the central bank indicated, and i quote here, commercial real estate prices remain at historically high levels despite high vacancy rates and appears susceptible to sharp declines. if distress transactions picks up or in the longer term the pandemic leads to permanent changes in demand. i have great concern for the

commercial property markets. and would like to hear what your thoughts are. if this is something we need to wait out? is it something that needs more attention than we've been able to provide in cares or covid relief before? and what does it mean to cmbs borrowers in this market -- with this market? chair powell: well, some parts of commercial real estate, office, hotel, some maybe retail to some extent are under real pressure because of the pandemic. those changes may be lasting or they may be temporary or they may be somewhere in the middle. so it's something we're keeping a close eye on. there is exposure to the banking system. as you pointed out, there is exposure in cmbs to the hotel space, in particular.

so we watch these things. of course, as i think you also mentioned, the single best thing that can happen is to have the economy recover quickly so that offices and hotels, you know, can be filled up again. where it relates to offices, are more people going to work remotely? so will demand for office space feel some downward pressure for a while or the long run? it's certainly possible. we don't know. we had a presentation a couple weeks ago from someone who had done a survey that suggested there may be sort of sustained lower demand for office space, in particular. so those are things we watch very carefully. we watch it through the banking system and so see whether -- most banks are ok on that. although some of the smaller banks do have a concentration in c.r.e. so we watch that carefully. senator moran: mr. chairman, thank you. mr. chairman, thank you very much. i yield the balance of my time.

senator van hollen: thank you, senator moran. senator smith. senator smith: thank you, mr. chair. can you all hear me? i know poor senator tillis is having a hard time with this. senator van hollen: we can hear you. senator smith: thank you. chair powell, it's great to see you today. i want to start by asking you a question around conclimate risk and exposing climate risk. you and i talked about before that climate change is among the most pressing challenges we face. it's an economic issue. it's a health issue. it really cuts across our entire economy. so i think in some ways it's like a low-moving pandemic. and, of course, it poses a real risk to the banks that the fed regulates. so i know that in december -- i think it was a bright idea that fed joined the -- the

networks -- excuse me -- network of superbanks and the greening system. my question gets to this. a lot of public disclosure on climate risks is mostly voluntary. it varies a lot from company to company which makes it really hard to compare risks or interpret what those disclosures mean. so could you talk to us about whether or not you think there climate risk disclosures should be standardized? or should we continue to allow firms to sort of make their disclosures if they make them at all in whatever form they choose? chair powell: if you permit me, i'd first like to say, of course, the overall response of society to climate change, which i agree with you, is a very important problem has to come from elected officials in congress and also in the executive branch under existing laws. that's really where this comes from. senator smith: i agree. chair powell: we have a specific

role on climate change which is only extends to the scope of our mandate which is to ensure the resilience of the institutions we regulate and supervise. but on disclosure -- this is really an f.c.c. issue but i would -- s.e.c. issue but i would say in general, the larger and medium size ones are working hard on this question. there's a lot of work done with the task force on financial disclosure and other groups. they're struggling with this question of different kinds of disclosure that varies by jurisdiction and by institutions. i do think it's appropriate to allow some of that difference to persist for now. in the long run, clearly, we ought to be going to, you know, kind of a template and more standardized, but i think it seems to me we can let this process, which is very much ongoing now among our own financial institutions, we can let it bear fruit for a while.

we need to go in the direction of standardization. senator smith: going to a standardized, comparable standard of disclosure makes sense to you? chair powell: yes, it does. over time. senator smith: thank you. i just want to also just loudly agree with you this is primarily an opportunity where congress and the executive need to step up and take the steps we need to take from a policy perspective. so i agree with you on that. let me just add one other thing i'd like to ask you about. there's been a lot of conversation about the unevenness about the economic recovery and how that's affecting different people differently. i'd like to hit on one point about this. last week, i think it was, the minneapolis fed came out with a report looking at recovery, people's recovering their employment and revealed in minnesota and in the minneapolis fed district a dramatic difference in women rejoining the workforce or in this case not rejoining the workforce. dramatic difference between women and men.

and particularly even -- particular difference between lower-wage women workers and higher-wage women workers. this is a huge challenge because in many parts of my state we have a workforce shortage. so it's an economic challenge as well as, of course, a challenge for families that really lost that significant wage earner. so chair powell, could you just talk a little bit about this unevenness, the challenges that women returning to the workforce as we move through the pandemic, and how you see that affecting our economic recovery? chair powell: sure. so we know with the closure of schools and with homeschooling, you know, parents have had to stay home. that burden has fallen significantly more on women than on men. and so women in effect had to involuntarily withdraw from the workforce. and that will -- hopefully that will be temporary to the extent people want to return to the bork force. that interrupts your career. it may interrupt -- it may be

difficult to get back to where you were in the workforce and replace that work life that you had and have your ability to contribute to the economy. it's important. again, it's not really our policy that can accelerate that. but policies that bring the pandemic to an end as soon as possible would help. and allow us to open the schools up again would certainly help. but you're right, though. there have been disproportionate impacts and that's one of them. senator smith: well, i know i am out of time, but i want to toss in there, one of the key pieces of infrastructure pour our -- for our economy to work and to work for women is a childcare system is there so their young children have a safe, affordable place to go. that's been a big, really kind of collapse in the childcare system during the pandemic. and something i hope to be able to work with -- continue to work with.

senator van hollen: i think you said the most important thing you can do is accelerate the vaccine. now we're on pace for having well over half of the country for people who want to take the vaccine vaccinate by, let's say, june, early july time frame. back when you and senator -- sorry -- treasurer mnuchin were before us when we were debating what a follow-up package should look like. she passed one over $900 billion. we were talking about a bridge. in your opening statement, you also talked about an optimistic outlook in the second half if we continue to make progress on the vaccine. i'm not going to ask you questions about the fiscal policy that we're debating in a $1.9 trillion package, but i am curious if at least at a high

level, do you think it would be prudent to make sure that the additional money that we expend to continue to provide that bridge or build that bridge to recovery, should it be spent on things that are truly stimulative? do you see any stimulative value, for example, in money coming from the federal government that ultimately makes it in the bank accounts and not back in the economy on a short-term bae cis? -- basis? >> here on c-span, we continue our over 40-year commitment to live coverage of the u.s. house as they gavel in next for legislative work. with debate on several house bills and votes scheduled for 6:30 p.m. eastern. live coverage on c-span. [captions copyright national cable satellite corp. 2021] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] for what purpose does the gentleman from maryland seek recognition? >> madam speaker, i move that the house suspend the rules and agree to the bill, h.r. 264. the speaker pro tempore: the clerk will report the title of the bill. the clerk: h.r. 26