able to get it, is more the expenses. covid related expenses. it's a complicated picture and there are differences between -- across the states. states have very different positions on this. i know it's a question you are considering. i'm sure your experts -- >> looking at your report. obviously my state has a lot of leisure industry, tourism and energy production. mr. perlmutter: it's hit us particularly hard in terms of employment and revenues. one last question. do you see any bubbles that are of concern to you? whether it's stock valuations or real estate because on page 30, i know my time is about to expire, you say that real estate prices are at an all time high, but veterans day can say si rates are all time highs as well.

chairman powell: i see your time is up. will i have time to answer this, madam chair? i can't answer that in 10 seconds, right? we have a broad framework for financial stability. one of which -- one of the four pillars of which is asset prices. there are some asset price that is are elevated by some measures, yes. other aspects of the framework leveraging the financial system is moderate. finding risk is moderate. i would say leveraging the noone financial system has -- nonfinancial system has gone up -- >> i thank you for your answers. mr. perlmutter: i thank the chair for extra time. i yield back. ms. waters: thank you. the gentleman from missouri, mr. luetkemeyer, is recognized for five minutes. mr. luetkemeyer: thank you,

madam chair. welcome, chair powell. thank you for your great leadership during this pandemic and the past year. been a trying time for all of us. i think you have done a good job of steering the feds through this storm as the ranking member talked about a while ago. one of the things that's concerning to me, i saw an article in a paper here with regards to the greening of the banking system. i think my good friend, congressman barr of kentucky, and i he headlined a letter to the fed, i was one of 45 members who signed on with regard to the fed's including climate stuff into their stress test. while i understand the need for that to an extent, it certainly is concerning. from the standpoint that an article here is talking -- a gentleman, an economist and

president of capital policy analytics, he was talking about the stress test. it's a long-term goal. many advocated the fed take this step. but he says i think they have designs that go beyond climate change. creating a system whereby the government can use its financial pregtory power to direct the economy away from businesses an industries it disapproves of is very much the goal of many democrats in congress anti-administration. mr. chairman, that sounds like choke point to me. operation choke point that would put a dagger in the heart and to resurrect that, to use climate change as an excuse to go after businesses, we are doing legal business n. a legal way, producing products and services we need as an economy, is wrong. i'm just wondering where you stand on that. mr. chairman. chairman powell: soarry. -- sorry.

first let me say the scenarios are completely from the stress tests. it's not the same thing at all. you really asked about a different question. which was -- give me two seconds. what was the question you did ask? mr. luke mitre: you are recognizing the choke points on business -- on banks that do not necessarily comply with what your climate agenda may be. chairman powell: we don't make -- we are not climate policymakers. climate health makers are democratically elected people. so we -- we are not thinking of it that way. we, as you know, as an institution we have had a long held reluctance, resistance, and unwillingness to engage in the allocation of credit. we think that is -- if congress wants to allocate credit in particular ways, that's fine. we don't want to get involved

in that. it's not something we are looking to do. what we are doing is -- go ahead. mr. luetkemeyer: i would make the point we found during the biden administration that operation choke point was alive and well. it was instituted by them. it was carried out by them. -- obama-biden administration, was approved by them and we tried to get rid of it in the previous administration. it's something that's there and we talked a lot about. let me move on. with regards to the executive orders of the coming administration right now they are concerning to me from the standpoint by taking one of the executive orders off the books that president trump had in place take two rules off the books for every one put on, it's a signal to me that look out, here come the rules and regulations. another one he put -- they took off the books was the guidance which is extremely important to me. fsoc, which are you a member of, came out and supported the

overall rule of not enforcing guidance and had a policy wide fsoc policy with regards to enforcement of the guyance. the administration came out with executive order that says they are going to enforce guidance across the entire administration. that issue has -- that executive order has been rescinded as well. my question to you is, i guess you see yourself relaxing some of the constraints that were in place as a result of the rule with regards to guidance? is this something you are thinking about? are you going to continue to comply with the rule that says you are not going to enforce guidance? chairman powell: we are going to enforce guidance. that's not something we are changing. mr. luetkemeyer: ok. it's concerning to me in that respect because it's something i think we worked hard to push out. now we have a new regulator at

c.p.b. which looks like rich -- 2.0. we'll see what happens. chair waters: mr. cleaver, chair of the subcommittee on housing, community development, and insurance is now recognized for five minutes. mr. cleaver: thank you, madam chair. thank you for this hearing. i look forward to this every year. mr. chairman, thank you for being with us today. and i want to do the majority of my discussion with you about c.r.a. i've got to go to this "new york times" article and ask if -- what is your response to the article which essentially is suggesting that particularly as it relates to economists, that african-americans are not even

represented at the level they are in any other particular area. i think the quote was, in the article, black people are less represented within the fed than they are in the field as a whole. can you give us your take on the article? is it accurate? is it fair? what do you think? chairman powell: i'm not the one to judge whether it's accurate or fair. it's not whether it's fair. i would say we are not where we want to be on this. we do work hard at it. it's something that i'm personally committed with. and all the leadership of the fed and the whole fed is very focused on strengthening our work force diverse i we are -- diversity. we are out there aggressively recruiting, both encouraging young minority kids to get interested in economics. i do that. i meet with people every year on that. also we go to historically

black and hispanic colleges to encourage when we find candidates we recruit them hard. it's challenging. i would just say, we are doing a lot -- i would be happy to come up and share it with you in detail, but the results are not where we'd like them to be. we are wide open to ideas, suggestions as well. we'll just keep working at t believe me we are working hard at it. mr. cleaver: i appreciate your candor on that. i know, annually were bringing up black students from kansas city to washington. trying to give them this experience in hopes some of them would want to do this. i'm not -- i don't think there has been any intentionality on your part. i'm trying to figure out what

we can do with you to be helpful and maybe we could talk about that at a later point. i'm very concerned about the c.r.a. issue. it came about in 1977 i think, somewhere, about that time, and the initial charge was that the litigant institutions, banking institutions were -- lending institutions, barninging institutions were not giving to underserved areas of the city or investing and some cases depositing. we have c.r.a. right now but i'm having difficult -- -- difficulty -- i intend to talk to the chair about this earl year. i'm not sure that i can put my fingers on c.r.a. project or what they are doing in my local

community. maybe they are more visible elsewhere. are you convinced that c.r.a. is where it ought to be? or should we have some 21st century changes in c.r.a. because maybe as our chair has stated, one of the issues we have in the same area is lack of affordable housing. maybe it's time to look at a new way in which we can do c.r.a. where it will be more effective and more visible. chairman powell: we place a very high priority on c.r.a. we think it's an important law and we want it to be as effective as it can possibly be. that's what's behind the effort that we put into our proposal. we took a tremendous amount of

input from the groups who were intended to been fit -- benefit from it. also on financial institutions also eager to make their communities better. it's very much the spirit in which approach this project. if you have particular ideas we would love to hear them. mr. cleaver: having a coordinated approach on c.r.a., maybe that's something that we have to talk about when we have time. i think my time is running out. madam chair, thank you very much. chair waters: thank you very much. the gentleman from michigan, mr. huizenga, is recognized for five minutes. mr. huizenga: thank you, madam chair. mr. chairman, glad you are here. i want to do a quick just sort of technical check. there was a "washington post" articles talking about your time yesterday at the senate.

you talked about the 6.3% january unemployment but it's closer to 10%. are you talking about the u-6 number that is typically published by the department of labor? chairman powell: no. i wasn't. though it was not dissimilar. i was really saying -- if you haven't looked for a job in the last four weeks you are not considered unemployed. you are considered out of the labor force. a whole bunch of people, a couple million people, dropped out of the labor force who were actually working. and they are counted -- they are not counted as unemployed. for purposes of this exercise we should think of them as unemployed. mr. high zange zinca: which i talked about extensively during the recovery. you didn't need to look at the unemployment level, you needed to look at the u-6 number that the department of labor publishes. chairman powell: same idea. mr. huizenga: i think it's been explored and you have acknowledged there is a completely uneven recovery

happening in the economy. you and i have had a chance to talk about this in person as well. my district, which is an ag producer, home to gerber baby foods, tyson foods, a number specialty crops, blueberries, pickles, asparagus, etc., we are heavily agriculture, but we are also a heavy manufacturing district. but the third leg of our economic stool throughout michigan but especially concentrated in my district is in that hospitality and tourism area. housing fully recovered as you had said. manufacturing, at least in our area, especially automotive, office furniture, those things, mining, others, manufacturing very, very strong. what we are seeing, though, is a loss in the hospitality area. it begs the question whether the economy is actually in

crisis writ large, or do we have pockets of crisis within a reasonably healthy economy? i'll give you a quick second to answer that. i want to move on to the real estate question that my friend, mr. perlmutter, was talking about. i want to explore that a little bit more. chairman powell: the losses and damages are concentrated in those industries we talked about that you mentioned. it's also the case that a number of other industries are short of where they would be if there hadn't been a pandemic. there is a broad -- it's concentrated in thosetries, which are a big chunk of people. there are 10 million people, fewer people. so it's a big number. mr. huizenga: i will note a lot of that is in michigan we have 25% occupancy allowed for a restaurant, for example. theaters are very sparsely populated. you can't do those types of things. at some point or another this isn't a federal issue, it is a local and state issue allowing those concentrations of people

as you know. commercial real estate, can you elaborate more what's happening in that commercial real estate space especially? we are seeing very strong residential but commercial space mr. perlmutter was going after. chairman powell: significant challenges for hotels, clearly. but also for office. the question's going to be how quickly can we get the pandemic over with and find out what equilibrium demand will be after that. people will still be staying at hotels, traveling. office space certainly in major cities there may be more commuting. we don't know. mr. huizenga: more hiccup within that business space. business traveling as well as what work is going to look like. i've got just a minute here. one of the things i guess i'm getting at is there is a concern a lot of us have with this additional stimulus that's going to be getting put into the economy.

certainly the stimulus that the fed has been providing. i want to know is there a risk of overheating the economy writ large while by using these broad monetary tools and others to address underperformance in select areas, such as hospitality and some of these more concentrated. in other words, are we creating a bubble in some of these other areas? chairman powell: our tools work in the aggregate as you know. economy wide level. i would just say that we do expect inflation to move up. because we could have a surge in spending as the economy reopens. we don't expect that to be a persistent longer term force. while you could see prices move up, that's a different things from persistent high inflation which we do not expect. if we do get it, we have the tools to deal with it and we'll use them. chair waters: the gentleman's

time has expired. the gentleman from connecticut, mr. himes, also the chair of the subcommittee on national security, international development, and monetary policy is now recognized for five minutes. mr. himes: thank you, madam chair. thank you, chairman powell. as you have noticed we have a robust debate going on around here about a major fiscal package. i'm certainly influenced by what i saw 10 years ago when our fiscal response to another financial crisis was, in my opinion, deeply inadd wit. -- inadequate. i also believe hundreds of americans are dying every week, still, it is far better to risk doing too much than to risk doing too little. nonetheless the concerns that are being raised about inflation i think are valid and need to be considered. i remember the early 1980's, late 1970's when inflation destroyed the savings of the middle class and reduced confidence in the economy and it was very, very painful

getting out of that. my question for you, mr. chairman, is do you believe that there is some combination of expansionary fiscal and monetary policy that could lead to inflation? i have two very specific questions. what, to you, are the leading indicators of that? and the other specific question is, is there some combination of challenge, supply chains, and surging demand that leads to an unhealthy level of inflationary pressure? are you seeing any of those indicators at concerning levels at the moment? chairman powell: we know that inflation dynamics evolve over time. but they don't tend to change overnight. so we have had -- remember well, i was in college during the 1970's, i remember well high inflation and this feeling of powerlessness on the part of anyone to deal with it until finally they did that. we have been in a low inflation, disinflationary load

ever since. what i see is an economy where there is still a great deal of slack. i see the prospect of really significant progress. as we put the pandemic behind us as we see that data you got in place guidance that tells markets clearly when we will begin to taper asset purchases and when we will begin to raise interest rates. when the -- in that case when the expansion is very far advanced. we have our tools. we have them in place. and we think that this is the appropriate policy stands. as i mention -- stance. as i mentioned, inflation it's something i remember well. i'm very familiar with the history -- mr. himes: i guess my question is more about -- i know where you are today. i'm curious about what you consider the leading indicators, in particular whether you are concerned about challenge supply chains. they are a challenge. chairman powell: things like

supply chains are -- unless they are permanently challenged, there could be -- take an example of the chips issue with microchips issue right now. the automobile industry's having a hard time. this is a significant economic issue. if there is a shortage of cars, then prices of cars might go up. that doesn't necessarily lead to inflation. inflation is a process that repeats itself year on year on year. so supply chain issues as we get back up to full economic activity, you could hit supply chain kinks along the way. that doesn't necessarily mean you'll have a higher inflationary process if the fed maintains its credibility and expectations remain anchored, which they weren't in the 1960 eafments mr. himes: i have one more question rooted in the experience of 10 years ago. as somebody who is closely involved in dodd-frank, it's

gratifying to hear you say the banking sector held up quite well. i remember 11 years ago we were promised by some that dodd-frank was going to crush the american capital markets. we were promised by others at the first sign of a stiff breeze it would come apart. son of a gun it held up pretty well. i am always concerned about the risk that we don't see. getting off of monetary policy, issuance, volume, and the high yield market, i know these are a little bit outside the banking sector, in my remaining 40 seconds, give me a sense of what is concerning to you that could challenge the stability of the financial sector? chairman powell: our policy is accommodated because unemployment is high and the labor market is far from maximum employment. we think that's appropriate. we do monitor all those things carefully. it's true that some aspect prices are elevated by some measures.

it's true that overall asset prices i would say are somewhat elevated. at the same time, we have a very resilient banking system, and we spend a lot of time making the capital markets -- overall, we are in a situation where policy is working through financial conditions to support economic activity and that's an appropriate thing. chair waters: time has expired. the gentleman from ohio, mr. stivers, is recognized for five minutes. mr. stivers: thank you, madam chair. i appreciate it. chairman powell, thank you very much for being here today. i want to thank you for your steady hand of leadership during these very turn lant times -- turbulent times. i want to thank you for being the most accessible federal reserve chair in the last decade. you have been absolutely the most success -- accessible.

i appreciate that. i want to acknowledge your comments earlier about an appropriate direction forward for vaccinations to ensure we can open up the economy and job training if we want to create jobs and get people to your maximum employment target. i'm not going to have you comment on whether the current covid response bill focuses on that, because i know you don't want to be put in the middle of that, but i think it's fair to say anybody that researches it will see that the job training dollar -- money rounds to zero, and there is not enough focus on vaccinations, in my opinion. i do want to move to something that i think you can, will be willing to talk about and that's in the hospitality, travel, and entertainment industries you believe banks and the capital markets are currently able to serve their capital needs with the regulatory flexibility you have given them? chairman powell: yes. yes, i do believe that. mr. stivers: ok. thank you.

one of the problems, though, let me ask you, when they are still shuttered and capacity reduced, are banks and capital markets as willing to give them money? chairman powell: yeah. i think what we see is banks are leaning in to -- they are working with their customers and leaning in to businesses that are -- look like they have good prospects. some of the companies really under a lot of pressure where they may be having a hard time getting credit. mr. stivers: i think that speaks to the fact that as policymakers we have been very reluctant to do targeted relief to economic industries. given the uncertainty recovery, i'm not going to ask you to comment on this because i think it is a question for policymakers, i do believe that we should focus a little more on some targeted relief to some of those industries. that's why i'm a sponsor of the

restaurant act and this new gym act and other things in the hospitality, traft, and entertainment industries. i think that would be smart of policymakers moving forward. i want to allow, i don't think i have heard you say it, to comment on the federal reserve's independence. just remind us whether you work for any president or you are independent. chairman powell: we have certain legal independence. and we think that arrangement has served the public well. that's really the point of it. is that we are able to make decisions without considering politics. our lives don't change when elections happen until -- of course the president has the power of appointment. mr. stivers: appointed every term. thank you. i do want to quickly move to digital curncy. you had a great interaction with ranking member mchenry about some of your concerns on the policy questions. i just want to quickly -- you brought it up. i want to quickly speak to the potential disintermediation

that could occur with the digital dollar. while i think it's important to keeping the dollar of the reserve curn sift world, we need to take a special look at this and i want to remind you something i showed you a few hearings ago of one of the last bank notes from the citizens national bank of rippley in 1929 that my grandfather got to sign, i think our financial institutions might be able to play a role in a digital dollar. i want you to think through those things. i don't want to ask you to comment on without thinking about t. but i hope you are committed to working with our financial institutions. chairman powell: yes. mr. stivers: the final thing i want to talk about something mr. cleaver talked b i want to take a step back and not focus on c.r.a. but focus on the gap in home ownership. the racial gap in home ownership. i'm curious if the federal reserve is paying attention to

that as an issue as opposed to, you know, the four corners of a c. rarks a. document, but the issues related to reducing the racial gap in home ownership. and i know mr. cleaver and i on the housing and insurance subcommittee are very focused on that and trying to work on some things to build a sustainable model. the last time we did this under barney frank we created subprime lending that blew up the financial markets. i want to make sure when we do it we create a sustainable model that can bridge that gap and bring up the minority home ownership rates significantly. is that something the fed's willing to work with us on? chairman powell: we would be happy to look at that. our principal role there is to assure to the extent using our tools that that gap is not a function of discrimination. it will be to some extent, but we use our tools to go after lending discrimination and make -- try to minimize that. mr. stivers: thanks for your

great leadership. i yield back my time. chair waters: the gentlewoman from ohio, mrs. beatty, also the chair of the subcommittee on diversity and influential, and is now recognized for five minutes. mrs. beatty: thank you, madam chair. thank you to chairman powell on being here today and providing us with your testimony on monetarypolicy. i want to start by revisitting a topic that i have raised with you several times over your tenure. and that is, of course, diversity at the federal level. certainly this is the topic that i think you can respond to and it won't have an effect on the economy as maybe some of the other questions.

we are probably more familiar with it last month, "the new york times" released an article entitled, why are there so few black economies at the fed? which found that of the 417 economists that are employed by the board of governors, only two black, but two out of 417, or 0.5%. i understand that many will say that something is difficult to find or difficult to hire. keep in mind, two out of 417. i also understand that we need to do more to increase the numbers of black ph.d. economists in general because they only make up 3% to 4% of the population and the federal reserve's representation are still lower than this number.

further, the reserve banks around the country only have about 1.3% economists that are black. my question to you, chairman powell, let me just say for the record i appreciate your contacting me, meeting with me, and always making great strides with things you have done in this area. are there any concrete steps that the federal reserve can daycare or that you are taking -- can take or that you are taking to increase the number of black economists within its ranks? do you believe the federal reserve's role as the nation's central bank has a role to play in encouraging diversity and inclusion and the word equity is very important to me in the economic field in general? chairman powell: i think we do have a role. we are a very large hire, by some measures the largest hirer of economists in the states,

including the 12 reserve banks and the board of governors. we are an important factor. as you know diversity is a high priority for me and for my self-and my staff. what we have been doing is recruiting very aggressively and going through not just the old traditional schools, but also historically black colleges and hispanic ones as well. and recruiting hard when we find appropriate candidates. we also have different levels, we have an internship program. we doll the same thing there. an upstream perspective. we also want to increase the supply. there is a fairly limited supply. we don't seem to be getting our share. we don't know why that is. but we are looking into it. we are doing everything we can. nobody here is comfortable with these numbers. nobody.

we are wide open to suggestions on how to do better. mrs. beatty: thank you. one last question if i have time. over the course of next year, tense and perhaps hundreds of millions of americans will be receiving the vaccination and will finally be, hopefully, placing this pandemic behind us. looking out to an economic environment, post-pandemic in 2022, let's say, what do you believe will be the potential lagging economic impacts of this pandemic? who and what should the congress be focusing on to address this from an economic standpoint? chairman powell: interesting. the economy is wide open, will open up, and people will go back to work, but what we are going to find based on some of the surveys we heard about, is that not all those jobs are going to come back because

people have started to implement automation and things like that. these are service sector jobs. that's been an ongoing process. it will have been accelerated. many of those people may find it hard to get back to work and i think they'll need further support. i would be looking at that over time. the livelihoods they had in the service sector may not be easy to replace. just may not be enough jobs. there is going to be need for training and placement and support in the meantime so these people can hang on to the lives they had and find new work. mrs. beatty: thank you. i yield back. chair waters: thank you very much. the gentleman from kentucky, mr. barr, is recognized for five minutes. mr. barr:chairman powell, thank you for your dependable leadership, especially during the pandemic. once again we appreciate your ability to members of congress, especially during this tumultuous time in our economy. as congressman luetkemeyer pointed out in december i led a

letter to you with 46 of my house republican colleagues outlining some of the methodlogical challenges with ininjecting climate change skenairest into stress test. we urged you to daycare take a data driven approach as you study climate impacts. while some on the other side have urged the fed to stray outside its mandate and take a more active role in fighting climate change. in your response, you stated, this is it, your response, you stated that, quote, congress has entrusted the job of directly addressing climate risks to a number of federal agencies, not including the federal reserve. end quote. and that you'll consider climate impacts only when doing so falls within your congressionally directed mandates. in january, the fed announced the creation of the super vision climate committee led by kevin styro. in a press release about the announcement, new york fed president said, quote, climate change has become one of the

major challenges we face which impacts all aspects of the fed's mission. the president's statement seems contrary to the stated board position from your letter and your response to me. can you please clarify his statement and how the new f.c.c. fits within the board's limited mandate. chairman powell: i'm not familiar with the context or that statement. i'll just say that we do see -- the job of a supervision climate committee an our job, frankly, is to assure that the institution that is we regulate and supervise resilient to all risks and that includes climate risk. that's a conversation we are having. all the large and medium financial institutions are already having that conversation, too. mr. barr: let's drill down a little bit how expansive the fed will get into this. as you know the fed recently joined as a member of the network towards the greening of

the financial system, the ngff has made recommendations that if implemented in the united states could have harmful effects on u.s. banks and the businesses they serve. our letter asks that you not import any ngfs standards that would harm the financial system or u.s. businesses and in your response you committed to this. how do you plan to evaluate ngfs proposals through the length of upholding this commitment? chairman powell: as i said in the letter, my colleague and i said in the letter, we are not going to import anything into the united states that we don't think is appropriate for the betterment and support and safety and soundness of the u.s. financial system. we are actually at a much earlier stage than any of that conversation would suggest. we are really engaged in outreach and in thinking about frameworks. we are talking to these institutions. we are talk to supervisory institutions here in the united states and around the world. we are at an earlier stage.

mr. barr: that's good to hear. i do worry that injecting climate risk scenarios into stress tests could perpetuate the trend of debanking, legally operating businesses like fossil fuels, in your letter you commit the fed will not dictate what lawful industries can serve, even without a directive lie mat scenarios and stress tests may debank stern industries. my commit here is limiting capital allocation to specific industries may itself have implications on financial stability and economic growth through lost jobs, higher energy price, and compromised energy security. and final point here, i would like the fed to keep in mind that choking off capital to fossil industry will not only produce the reliable challenges we saw last weeks in texas, it will undermine the fed's maximum employment mandate. final question on inflation.

yesterday you said you weren't concerned about the threat of inflation, but some of the economic indicators are blinking warning lights for me. high asset price, rapidly rising bond yield. historically high year over year increase in the money supply. these are on top of the unprecedented monetary and fiscal stimulus enacted last year and the $2 trillion fiscal blowout this week. within the bounds of the fed's new monetary policy framework for a long-term rung average target for inflation, how high are you willing to let inflation get and for how long before you step in? chairman powell: we don't have a formula in mind. i would just say that as i said earlier, we do expect inflation to move up, both because of some sort of technical calculation reasons, but also because we have a surge in spending perhaps later this year. we don't expect that that will

be particularly large or even more that it will be proficient because it's in the nature of a one-time -- inflation is a process that gets going over a period of years. we don't think and we are committed to the idea it will not become a persistent thing. it is ultimately the credibility of the fed and the commitment to stability mandate that holds inflation where it is. we haven't changed that. mr. barr:thank you for monitoring that closely. i believe my time has expired. i yield back. chair waters: thank you. the gentleman from florida, mr. lawson, is recognized for five minutes. mr. lawson: -- mr. lawson is recognized for five minutes. mr. lawson. mr. lawson: can you hear me. chair waters: yes, i can hear you. mr. lawson: thank you very

much. thank you, madam chair, for calling this meeting. federal reserve -- rise in businesses, and steep drops in commercial real estate prices published on friday. commercial real estate, which i have a great deal of interest in, might be hit again after the pandemic. some economists say an increase in people working from home could result in less demand for office space. while stepped up online purchases could force more shutdowns of brick and mortar retail and additional vacancies at shopping centers. my question to you, sir, is what is the federal reserve plan for commercial real estate? chairman powell: well, we don't have any plans

specifically for commercial real estate. i will say that we do see a number of sectors of commercial real estate that are under pressure. as you suggest particularly office, hotels, things like that. which are directly affected by a pandemic. and the best thing that can happen for the commercial real estate sector is for the economy to get back to full operating status, by which i mean get the pandemic behind us. mr. lawson: there's been a lot of interest, even last year, in this particular situation. especially as it relates to hotels, the number of people that are -- have been laid off in that industry. which is significantly higher in that particular area than maybe it is than bailing out the airline industry. do you see any similarity in the retail industry as related

to the airline industry that we bailed out? chairman powell: do i see similarity between the retail industry and the -- those decisions are not decisions for us. that was a decision made by congress and the administration. the provision of the particular funding for airlines. we are not part of that discussion. mr. lawson: thank you. it has been suggested by some that all of our challenges with unemployment and poverty will be solved if we simply lift local restrictions and open up -- since the beginning of this crisis you have stressed that the path of the economy continues to depend significantly on the course of the virus. will you elaborate will the economy fully recover if people don't feel safe and comfortable and the virus is contained?

chairman powell: i will. a big part of the parts of the economy that are not operating at full capacity are the one that is are affected directly by covid. the rest parts of the economy are largely recovered or even fully recovered. that part of the economy is not. that's travel, lee -- leisure, poe tholse, all those things. -- hotels, all those things. what those sectors need is an end to the pandemic and people will then become confident again that it's ok to stay in hotels, ok to go on vacations, ok to go to bars and restaurants. i think that will take time. but i think that is the key -- single key factor in getting that done. that process started and then completed will be bringing the pandemic to a decisive end as soon as possible. mr. lawson: back in january, in the time i have, you stated

that one will be extremely hard on the recovery in the economy. have you seen that your statement has been pretty much right in terms of where we stand at this point? recovering economy? chairman powell: we can go -- did go through a very large spike in cases. as you know they are coming down sharply now. the economy did go sideways for -- through january. i mentioned in my testimony 29,000 jobs a month. much higher last summer. i think as the pandemic reseeds -- recedes, new cases are way down, hospitalizations are way down, we'll begin to see maybe fairly soon we'll begin to see the job numbers start to creep back up. and hopefully this time that will be consistent with keeping the virus under control. getting it really under control. mr. lawson: with that i yield

back. chair waters: thank you very much. the gentleman from texas, mr. williams, is recognized for five minutes. mr. williams: thank you, madam chairwoman. and also, mr. chairman, thank you for being before our committee today. this virtual setting. you have mentioned that there could be 6% growth. we talked about that all day today, by the end of the year. i completely agree. the fundamentals are there for the economy to easily rebound at this pace. the biggest obstacle i see that would prevent the level of growth from becoming a reality is individual states focusing businesses -- forcing them to remain closed. for states like mine, texas, the great state of texas, responsibly opened their economies, people are getting back to work. in december texas added 64,000 jobs while states that are still under heavy lockdowns like california had over 2,000 jobs lost over that same

period. as we talk about the next step in covid relief, it needs to be focused on getting people back to work. mr. chairman, what would be the best allocation of resources that would incentivize reopening the economy? chairman powell: well, i would say, as you know i'm reluctant to comment on frankly -- shouldn't comment on the legislation that's under consideration. i won't do that. but i'll say again at this point the single biggest thing is to get people vaccinated and get the pandemic under control in a decisive way. then the economy can fully reopen and people can get confident again it's ok to resume their normal activities. mr. williams: i'll buy that. my district contains some very rural areas that do not have access to reliable broadband internet. and the covid-19 pandemic has

exposed how necessary it is to be connected to the internet if you want to run a business, take advantage of telehealth capabilities, or educate your children. we've got some strange stories that people have to find hot spots in my district and drive hours to get there. chairman, can you tell us what it would mean for the economy, recovery, if we were able to get investment in broadband infrastructure for the american people currently being left behind in this digital world. chairman powell: without commenting on the bill i would say that broadband is just an essential piece of 21st century infrastructure. having good broadband everywhere in the country will help people in rural areas and poorer people who may not have access and things like that. it's a very important piece of infrastructure for us to have as a nation. mr. williams: like i said in my district a lot of rural america

still does not have it. we need to get that. i think we agree. lastly, during the trump administration you were applauded for maintaining the independence of the federal reserve and focusing on your dual mandate of price stability and full employment. you are going to be pushed once again during the biden administration to use the power of the federal reserve to pursue additional political goals such as addressing income inequality or climate changes. i just want to reiterate that some of my colleagues have already brought that up and congress is the body that will must debate and act on these ancillary issues, not the federal reserve. in closing, mr. chairman, can you tell us listen today why it's important for the federal reserve to stay independent and not act on the political needs of the moment. chairman powell: i'll be happy to. the fed from direct political control is an institutional arrangement we think has served the country well. that's why we have it.

it's not something that's in the constitution. it's a practice that we have. we don't engage in political discussions over here. we don't take politics into consideration or election cycles or anything like that. nonetheless we try to be extremely transparent and really work hard to stay in contact with the body that has oversight responsibility in our system of government, which is the two committees on capitol hill. that's where our oversight responsibilities and we take that very seriously. mr. williams: i will return my time back. i want to thank you for the job are you doing and appreciate your hard work that you have generated these last several years. thank you very much. madam chairman, i yield my time back. chair waters: thank you. the gentlewoman from iowa, mrs. axne, is recognized for five minutes. mrs. axne: thank you, chairwoman. thank you, chairman powell, for being here. good to see you. i want to focus on the labor market a little bit here. you said a couple wooks ago that published unemployment rates have dramatically

understated the deterioration in the labor market. as i understand it that difference is mostly about the decline in labor force participation. is that correct? chairman powell: that is correct. mrs. axne: that's something i clearly see in iowa. our unemployment in december actually fell back below 3.5% but that ignores about 130,000 iowans who just left the labor force completely. is that something that you will be looking at closely when it comes to determining if the economy is at full employment? those folks who have literally just left the market? chairman powell: yes, it is. we say that we look at a broad range of things. it's important to say that we look at the employment rate and employment to population in particular. as a statistic that combines labor force participation and unemployment. mrs. axne: i'm happy to hear that. changing course here a little bit. we have seen about four million people leave the labor force. almost 60% of those have been

women. despite them making up of course less of the labor force before the pandemic hit. then we have a 33-year low last month and more than a million more women have lost their jobs than men. i would ask you, chairman powell, what do you think the reason for this kind of disparity? and is that something you are going to consider when you are evaluating full employment. chairman powell: a combination of two things, i believe of the one of which is that women are within the labor force overrepresented in those public facing service sector jobs. the other is just with the closure of many schools, parents are staying home and that burden has fallen more on mothers than it has on fathers. those are the two pieces of that i think. both of those should dissipate and we would go back to hopefully something closer to where we were where people worked if they wanted to and did childcare if they wanted to do that. as the pandemic comes to an end, we hope that people once again be able to make those

choices without taking into account the fact the schools are closed, nor example. -- for example. mrs. axne: i'm so glad to hare you bring up childcare. apparently more than $50 billion a year costs our country. do you think helping families find affordable childcare could help the economy and help us get back to full employment more quickly? chairman powell: i do think that's an area that's worth looking at. i don't want to comment -- don't know what's in your discussions -- >> continue watching this at c-span.org. we are leaving this to fulfill our long time commitment for live gavel to gavel house coverage. members are meeting to start work on adding lgbtq anti-discrimination protections to the civil rights act and increase federally protected willerness and scenic rivers in california, oregon, washington state. the little also blocks drilling or mining on federal land near the grand canyon. live to the e