Foreign. Thank you Foreign Oh brother oh brother oh brother oh brother. Buckle your butts up because we are going for a ride. This is day two of Fed Meets Congress the crossover event that the markets did not want because on day one, things got absolutely crushed and now we're here for day two.

If you're watching this live, I Highly recommend making your sure your socks are secured because you don't want those puppies knocked off. If you're watching this as a recording, well, you already probably know how the market played out. So you're either gleeful with the amount of money in your pocket or you're crying in the shower. Whatever it is, let me know how you're handling everything.

Uh, in a comment below I suppose. But for everyone who's watching this, live things are getting ready. things are getting ready. We see Tesla in the top right vomiting.

We see the Spy dropping now popping and we see the dollar doing the opposite. We've been paying attention to this inverse relationship. if the dollar tracked by the the D Dixie the dollar Index dxy. If this pushes Above This breakout level of 105.60 Uh, if it pushes that way, look for the Spy to absolutely vomit.

And on top of that, we have various things coming out. Not only is the chairman of the FED Jerome Powell speaking to the house today, he spoke with the Senate yesterday. If you're watching this in real time, but you also get the job openings report. The jobs opening report will also be dropping at 10 A.M So 10 A.m marks the start of the testimony, but also an important macroeconomic event.

And also just for those of you who want to know the job Openings estimation as of now, the Line in the Sand is 10.6 million. 10.6 million is the Line in the Sand for the job Openings report coming out in like two two and a half minutes. Just so everyone knows. Uh, it's gonna be another crazy day.

Uh, without a doubt another crazy day. Looks like Tesla is fortunately going my way I need it to snap below 180 to have any chance, especially to potentially make up for the amount of money that I could be losing on the cues here I need the dollar to pop I need the Spy to drop Trk I have no position, but I'm watching it just because it's actually like getting horrifically manhandled here in the market. Um, the Bulls were just basically taken out back and shot yesterday on Trka. Uh, looks like it's gonna end pretty horribly, but what you need to do is Get Ready Get Mentally ready for quite a bit of insane volatility I'm expecting Pops to the upside drops to the downside and our goal here is to kind of try to see through the volatility and understand what the trends truly going to be.

Um, I'm As of now, none of this price action really matters to me. What's going to really matter is the price action from like 10 to 10 30. That's what I'm really really gonna care about. but let's get going.

Uh Market is screwed. Question: What do you think about a and a sweet about the Ftds? Is it good in your opinion? Um, no I find it weird I mean I don't think it's good or bad I think it's weird because why has Adam Aaron talked about Ftds now? When in the past he's like, oh no, we already asked, nothing's going on. It feels like he's pandering for votes If that's truly what it feels like is going on. He has gone out of his way to be like hey, we already asked them, they didn't tell us anything.

He's like I'm not going to talk about the stock price, but now he's going back Adam Aaron is the king of flip-flopping. Uh, he's very fickle. He he says he can't or won't or doesn't want to talk about one thing and then when it is beneficial to him, he will. So is it good or bad? I don't think it's like I don't I think it's neutral in terms of the company and the price, but in terms of him as a person, it shows exactly who he is and that like basically you can't trust anything he says is really how I would summarize that I mean it literally was two earnings announcements ago that Adam Aaron of AMC was like, you know what? Uh, can't talk about the stock price.

it's not good to do it. Uh, he's gone out of his way to be like we've talked to Regulators they're saying there's nothing going on, but now he's doing it. Uh I find it super super strange. All right, let me just make sure I have everything set up the way I need it over here.

Let me make sure I have the speech ready to go. All right? Uh, on. All right. Hang on.

Oh I need to find it. uh or a Fed schedule. Let's get ready. All right, they haven't started yet.

Ooh the report. Initial reaction: negative, negative, negative, negative, Brutal Brutal. Brutal. Brutal.

Today is the eighth I Believe All right, they have not started yet. Dollar Huge pop Market Huge drop Tesla going down. Oh wow. Oh brother.

All right, let's see what the report was. Let's see what the report was: Foreign job openings: 10.824 million The expectation was 10.546 Last was 11. So you might be wondering why when we have more job openings. Once again, the report was 10.824 Million The expectation was 10.546 Why would more job openings cause the market to fall? The reason for that is basically because it means the economy is stronger than expected.

The Line in the Sand The economy is actually better. If the economy is better and we still have inflation, there's absolutely no reason why the FED shouldn't be more hawkish. Basically, they need to be more hawkish to fight inflation. and the only reason they wouldn't be more hawkish is if they're worried about tilting the economy over.

But if the economy is stronger than expected, you literally have no reason to not be more hawkish. I.E Fight inflation aggressively. So what? This is effectively done. and I Don't know if the numbers would have been updated yet, but what this is effectively done is it's going to increase the odds of a 50 Bibs rate hike.

Um, this is not the new update. As of now, there's a 75 chance of a 50 Bips rate hike. When this reloads and they get in the new information based on the bond yield, Market the odds are going to be even greater. Um, if you're more hawkish, you're more aggressively fighting inflation That has a net side effect of putting more downward pressure on the Old Market And that's exactly what we're seeing right here.

and look at where it's bouncing on. Attempt number one: The level that we perfectly measured for all of you Three Nine seven. If Three Nine Seven doesn't hold and I don't know, it might, it might not. We're then watching 395 25.

that would be the next level. If 397 doesn't hold, we just hit a low of 396.83 You are more than welcome. Uh, the Jerome Powell versus the how stream should be starting momentarily. But in the meantime, what is going on in the world? See the dollar popping, the Spy dropping.

The cues are dropping and even Bitcoin Bitcoin went from Oh Bitcoins all over the place. It dropped the hundreds of dollars but now bouncing back up. Uh so we're seeing big drops because of the jolts. Report: The job openings report we how high did it come in it was uh 10.54 and 8.24 So about three hundred thousand, 300 000 more jobs than expected.

So good economic report and remember in the current environment, we live in the upside down world where the good news is bad news, bad news is good news. And I know that's not like um at first the most logical explanation but that's truly what's going on. What did I just see here. Trk shorts are trying to escape the preferred stock series.

They're trying to escape What the Um I know true demon. But I just don't agree with this. they're trying. Shorts are trying to escape.

What are they trying to escape. They're now up 62 percent in a day in an opening session. Um, the tone of this is as if the shorts are worth. They just made a shitload of money.

That's just no. Uh, Trk is screwed. If people are pumping Trk, they're in one way. They're either like hopium copium bag holders or they're trying to screw you over.

They're trying to use you for exit liquidity. If you're still bullish on Trka like you're just better off donating your money to like a charity or something like honestly, just do something better with your bunny Um, that's that's just wild. Absolutely wild. Uh, But okay.

so initial reaction to the Job Openings report: bearish because it's a positive economic report. But what's really going to get this party going is the committee on Financial Services which is allegedly going to be starting shortly. Um I have it up over here here I could bring it to show you folks what's going on. Well, I guess we'll switch it over to this.

We'll go to conjunctional members will have five legislative days with him. Let's just see, here we go: Materials the chair for inclusion in the record and I'll note at the outset that this hearing has a hard stop of 1pm. This is traditional for the Fed chair um, and uh, which we intend to strictly observe I just turned my oh I Now recognize myself for performance Given an opening statement hello testing Audio One, Two three, Audio One, Two three Um, this week you stated that the FED will quote stay the course until the job is done uh and that is to restore price stability. This is positive, but you know as well as I do, you're facing a very strong headwind from the political left Democrats are pressuring the FED to stray from its narrow mandate without it's a page out of their same old Progressive Playbook When they don't have the votes to achieve something here in Congress, they turn to regulators and now chair Powell They're looking at you in the Federal Reserve President Biden's cow towering to the far left is what got us into this inflationary mess.

I Urge you to reject the ideologues who put their social agenda ahead of economic prosperity. High prices continue to eat away at workers' wages and retirees incomes. Since President Biden took office, we've experienced inflation rates not seen since the late 70s and early 80s. Inflation rapidly decelerated.

accelerated after Democrats passed their so-called American Rescue plan which poured nearly two trillion dollars of inflationary fuel into the economy. By June of last year, the Consumer Price Index showed inflation skyrocketed From Below two percent to nearly nine percent and personal consumption expenditures the Fed's preferred measure of consumer prices ballooned to seven percent. Instead of being rescued by democrats, Americans were punished with pain at the grocery store and sticker shock at the pump. While inflation is now believed it is now below its mid-2022 peak, it is persisting and rates well above the Fed's target.

It remains broad-based and continues to hammer Americans pocketbooks. In fact, a recent Gallup poll shows half of the respondents say they are worse off financially than a year ago. It's clear that there's still a long way to go in the effort to bring down costs. I Look forward to hearing you reaffirm your commitment to that work today.

Republicans Also want to hear from you regarding some concerning developments at the Federal Reserve on the regulatory front. Recently, the Federal Reserve's Vice Chair for Supervision announced a Quote Unquote holistic review of Bank Capital and the Fed's regulatory regime. However, it seems that only a small group within the FED knows what this means, what it entails, how much review is is being vetted by the full board, and the the type of quantitative analysis the FED is performing. the FED shouldn't operate in the shadows, especially when the regulation in question can have Broad and significant economic effects.

It's also unclear the motivation for the Fed's holistic review, particularly when so many board members have stated that the banking system is very well capitalized and any review of Um of of capital standards should be targeted. It also appears the Federal Reserve board is laying the groundwork for climate policy to be implemented through the FED regulation with an opening Salvo to quote Unquote of Quote Unquote Scenario Analysis Addressing an issue like climate change is important, but a policy that should originate here in Congress by elected representatives of the people, not the central bank. As you said, the FED needs to stick to its knitting. I Agree There is concern for many that the FED is picking up new needles and knitting partisan sweaters at such a precarious time for our economy here at home in the global economy, that would be a mistake.

Thank you for being here today. I Look forward to your Testament and the questions by our members. The chair now recognizes the ranking member of the committee: Miss Waters uh for four minutes for an opening statement Uh, thank you very much Mr Chairman Good morning Chair: Paul Since your last visit, our country, under the leadership of President Biden has made major progress to improve economic conditions, including adding a record 12 million jobs, reducing unemployment to its lowest rate in 54 years, while also reducing the deficit by 1.7 trillion dollars. Unfortunately, many families are still struggling to afford basic necessities because of inflation.

What's more, interest rate hikes are making borrowing, especially for mortgages, outrageously expensive. Since I raised this concern for you in a November letter, the rate hikes continue to have an outsized impact on housing costs, which are, as you know, a primary driver of core inflation. But Mr Chair I think that you will agree that Congress also has a role. That's why I'm somewhat disappointed that after two months Republicans have taken no serious action to address inflation.

By this time, last Congress House Democrats had passed the American Rescue plan to provide relief from the ongoing pandemic which included our committee's efforts to provide 70 billion dollars for homeowners, renters, businesses and First Responders if Republicans are looking for ideas, committee Democrats have put forth additional bills like the bill back better act to bring down costs for Americans especially housing costs. Even more concerning, we just we're just months away from an economic catastrophe Beyond what we have ever seen including spiking interest rates, massive job losses, and Global instability. I'm talking about the threats by Republican leadership to force a default on our nation's debt If we don't agree to their demands to cut Social Security Medicare or other critical programs, you have urged Congress to take immediate action to raise the debt ceiling, but rather than focusing on this very real issue, the first bill that committee Republicans brought to the floor instead suggested that Social Security and Medicare or socialist threats to America. Since then, we have considered legislation related to deregulating Securities and banking laws and countering threats from China.

but Republicans have completely ignored the biggest economic threat to businesses, consumers, and our economy defaulting on our debt. Last month, I wrote a letter to chair McHenry urging him to take this matter seriously and hold a hearing. but I'm still waiting for a response. I Hope Republicans will listen today to the real consequences that even the mere threat of a default would have for everyone in this country.

And finally, I'm so pleased that we're finally making progress on diversity and inclusion for key positions at the FED, including last year's historic confirmation of Dr Lisa Cook to serve as a very first black woman on the Federal Reserve board with the board's Vice chair and Kansas City Fed President positions bacon I think President Biden and Kansas City Fed board should build on this progress by seriously considering diverse candidates for these positions. With that, I yield back the balance of my time. The ranking member yields back the balance of my time asking him as consent to submit for the record. Uh, my letter to Secretary of the Treasury Janet Yellen from February 28th asking for an update on the X date for the debt ceiling.

I Also, ask unanimous consent to submit for the record the latest CBO long-term budget outlook on the unsustainability of our debt um most recently released and without objection, so ordered. I'll now recognize the chair of the Financial Institution Subcommittee chair Mr Barr for one minute thank you Mr Chairman and Chairman Powell Thank you for being here today to discuss the Federal Reserve's monetary policy actions. In a time of economic uncertainty, mixed economic data, historic inflation that continues to plague families and businesses around the country, it is Paramount that the Federal Reserve remained Vigilant on reducing inflation, anchoring inflation expectations, and restoring price stability at the Fed's two percent. Target I Also, look forward to discussing the Fed's Regulatory and supervisory activities.

As the FED reviews the bank Capital framework. it needs to consider the impact to the real economy and our Global competitiveness when raising Capital requirements and sidelining capital would work at Cross purposes with monetary tightening, constraining the supply side when we need more not less investment to fix Supply chains and reduce inflation. Tailored regulations are required by the by of the Fed by law and a one-size-fits-all approach would be the wrong path to take. Finally, I urge the FED in your words to stick to its knitting and not attempt to be a climate regulator.

I Yield back so many times expired. Will now recognize the ranking member of the Financial Institution subcommittee. um Mr Foster for one minute. Thank you and thank you chair.

Powell for being here today. Today is the 15th anniversary of when I was first elected to Congress and placed on the financial services Committee just as the economy was about to collapse and so that was my trial by fire, the emergency response to rescue the economy and the legislative response the Dodd-Frank Act that successfully stabilized our financial system. So 15 years later as I take my place as the rankings, Market's turning oversighted. if it snaps that recent low we're going down I Recall the solemn oath that I swore to myself back then to make sure that this kind of Calamity never happens again.

The monetary policy report that we're receiving today is largely A Narrative of a return to normal and Lead times to manufacturers are back to pre-covered levels. The job market retains Supernatural strength and inflation is responding more or less as predicted to the usual measures is a repeat of the 2011 default crisis. Congress has the power to avoid that and we owe it to the American people to do so. And I Yield back today.

we welcome the testimony of Jerome Powell Chair I Want him to read me here. The Governor is the Federal Reserve System Chair Powell Was appointed Uh, reappointed and sworn in for a second for your term as chair on May 23, 2022.. Chair Powell also serves as chairman of the Federal Open Markets Committee and the Systems Principal Monetary Policy Making, which is the system's principal monetary policy making body. um Chair Powell.

We thank you for taking time to be here. We will recognize you for five minutes, give an oral presentation or testimony without objection. Your written statement will be made part of the record. Chairman: Powell you're recognized Chairman McHenry Ranking member Waters and other members of the committee.

Good morning, Uh and I appreciate the opportunity to present the Federal Reserve's semi-annual Monetary policy report. My colleagues and I are acutely aware that high inflation is causing significant hardship, and we're strongly committed to returning inflation to our two percent goal. Over the past year, we've taken forceful actions to tighten the stance of monetary policy. We've covered a lot of ground in the full effects of our tightening so far are yet to be felt.

Even so, we have more work to do. Our policy actions are: Guided By our dual mandate to promote maximum employment and stable prices. without price stability, the economy does not work for anyone in particular. Without price stability, we will not achieve.

All right. Let's go Power crush The market. Let's go. Let's Go.

Let's Go. I Will review the current economic situation before turning to monetary policy. Let's Crush it. The data from January on employment, consumer spending, manufacturing, production, and inflation have partly reversed the softening trends that we had seen in the data just a month ago.

Some of this reversal likely reflects the unseasonably warm weather in January in much of the country. Still, the breadth of the reversal, along with the revisions to the previous quarter suggest that inflationary pressures are running higher than expected at the time of our previous Flmc meeting. From a broader perspective, inflation has moderated somewhat since the middle of last year, but remains well above our longer run objective of two percent 12-month change in total, Pce prices has slowed from its peak of seven percent in June to 5.4 percent in January as Energy prices have declined and supply chain bottlenecks have eased over the past 12 months. Core Pce inflation, which excludes the volatile food and energy prices was 4.7 percent as supply chain bottlenecks have eased and Tighter policy has restrained demand inflation in the Core Goods sector Has Fallen And while Housing Services inflation remains too high, the flattening out in rents evident in recently signed leases points to a deceleration in this component component of inflation over the year ahead.

That said, there is little sign of disinflation thus far in the category of Core Services excluding housing, which accounts for more than half of core consumer expenditures. To restore price stability, we will need to see lower inflation in this sector, and there will very likely be some softening in labor market conditions. Although nominal wage gains have slowed somewhat in recent months, they remain above what is consistent with two percent inflation and current Transit Productivity Strong wage growth is good for workers, but only if it's not eroded by inflation turning to growth. The U.S economy slowed significantly last year, with real GDP rising at a below Trend pace of 0.9 percent.

Although consumer spending appears to be expanding at a solid Pace this quarter, other recent indicators point to subdued growth of spending and production activity in the housing sector continues to weaken, largely reflecting higher mortgage rates, higher interest rates, and slower output growth also appear to be weighing on business fixed investment. Despite the slowdown in growth, the labor market remains extremely tight. The unemployment rate was 3.4 percent in January its lowest level since 1969. job gains remain very strong in January.

While the supply of labor has continued to lag as of the Market's going down, there were 1.9 jobs. Buckle up, buckle your butts up, secure your stocks all-time Peak recorded last March While unemployment insurance claims have remained near historic lows, turning to monetary policy with inflation well above our longer run goal of two percent and with the labor market remaining extremely tight, the Fomc has continued to tighten the stance of monetary policy. raising interest rates by four and a half percentage points over the past year. we continue to anticipate that ongoing increases in the target range for the Federal funds rate will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to bring inflation down to two percent over time.

In addition, We are continuing the process of significantly reducing the size of our balance sheet. We are seeing the effects of our policy actions on demand in the most interest-sensitive sectors of the economy. It will take time, however, for the full effects of monetary restraint to be realized, especially on inflation. In light of the cumulative tightening of monetary policy and the lags with which monetary policy affects economic activity and inflation, the committee slowed the pace of interest rate increases over its past two meetings.

We will continue to make our decisions, meeting by meeting, taking into account the totality of the incoming data and their implications for the outlook for economic activity and inflation. Although inflation has been moderating in recent months, the process of getting inflation backed down to two percent has a long way to go and is likely to be bumpy. As I mentioned, the latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated if And I Stress that no decision has been made on this, but if The totality of the data were to indicate that faster tightening is warranted, we'd be prepared to increase the pace of rate hikes. Restoring price stability will likely require that we maintain a restrictive stance of monetary policy for some time.

Our overarching focus is using our tools to bring inflation back down to our two percent goal and to keep longer term inflation expectations well anchored. Restoring price stability is essential to set the stage for achieving maximum employment and stable prices over the longer run. The historical record cautions strongly against prematurely loosening policy. We will stay the course until the job is done.

To conclude, we understand that our actions affect communities, families, and businesses across the country. Everything we do is in service to our public. Mission We at the Federal Reserve will do everything we can to achieve our maximum employment and price stability goals. Thank you I Look forward to your questions.

Uh, thank you Chairman Powell I'll now recognize myself for five minutes for the purposes of questioning. Uh Chairman Powell There's been a lot of discussion over the last 24 hours about the effective rate increases on the economy. A lot of debate about what you said yesterday in the Senate Um, how does but no one asks you this directly. We have a March meeting coming up.

Open Markets Committee meeting coming up in two weeks. Um, how do you think about the March meeting? What's your approach to that? What are we likely to see? Thank you. So I I won't repeat what? I What? I just said in my testimony. But but if I turn to the March meeting? um I guess I would say that we have some potentially important data coming up.

uh, data to be analyzed. One of them came out at exactly 10 o'clock That would be the Joltz report which of course I haven't seen having been sitting here. Okay man, hot. But we're also getting a jobs report on Friday and a CPI and PPI inflation Market doesn't know it Next week.

Big jobs, big pops, high volatility. When we say that we're going to be looking at the totality of the data which is what I said that does include these these reports yet to come, they're going to be important. It's shown a little bit of strength surprising very recently received, and of the overall direction of the economy and of our progress and dollars just took a big hit carefully analyzing them. Um, again.

I We have not made any decision about the March meeting. We're not going to do that until we see the additional data. The larger point though, is that we're not on a preset path and that we will be guided by the incoming data and the evolving Outlook. But you've also said higher, longer yes, Is that still the case? Yes, The market with that data since January and and and also the revisions to the November and December inflation data.

And they suggest that uh, the ultimate level of interest rates higher than we'd expected. What are those economic factors? So um, going back to January as I mentioned, the the nice softer inflation readings of November in December were revised up their Market do it inflation report for January, we got an extraordinarily strong employment report very strong consumer spending. Uh, strong manufacturing data right across the board. And as I pointed out, some of that may have been affected by the very warm January weather, but nonetheless, all of it pointed in the same direction.

Okay, let's move to regulation. Um, Uh, chair pal. In January The Federal Reserve put out a policy statement noting that digital asset custody is a permissible activity if done in a safe and sound manner. However, if a bank can demonstrate to the FED that it can conduct that activity and safe and sound manner, the capital impact of the Sec's Staff Accounting Bulletin effectively precludes Banks from offering Digital Asset Custody service at any scale.

Are you aware of this staff accounting? Bulletin by the Securities Exchange Commission and its impact on custodial services? I I Am aware of it. Of course it's an SEC Accounting bull. this is. this is Sab 121 I Think And that's right.

Certainly aware of it, and you know we do follow Um Uh General accepted accounting principles in in our in our Capital regulation. Okay, well, without objection, I'll submit to the Um, submit for the record. Uh, my uh, letter to the bank regulars about this: Uh. So while the FED says it can be done in a safe and sound manner, the Securities Exchange Commission is regulated it so that it cannot be done.

Uh, Next question is: uh, certainly about Bank Capital Standards. You got questions about this yesterday. Uh, Chair Bar has announced a holistic review of Capital Requirements. Uh, As I said my opening statement, there are a lot of questions about this process.

um, and uh. previous statements by members of the Uh: the FED Governors Um, about the adequacy of current current capital standards. Um. and so while the Vice Chair for Supervision has announced that the FED will engage in a holistic review of capital regulation as that Fed staff.

Is that done at the Uh, You know, at the Governors, the the board level. Um, what is the process? There are a lot of I Don't see how any of this is bullish. I'm going over the numbers on this recent commentary why it's necessary for the cat the FED to conduct a holistic review and what that process is. Um, and so you know.

My general question is, do you still agree with your previous statements about the adequacy on a generalized basis of of our financial system? Uh, or are we to read into this that we're not adequately capitalized and there's there's a high level of risk in the system that we're unaware of at this point. Thank you. So the the why really? just is that? uh as a new Vice Chair for Supervision Vice Chair Bar has has launched into his taking a fresh look at everything including Capital that that actually is typical of the last two people to have this job so that makes a lot of sense. Um, in terms of um, the process it's You know, it's certainly conducted under Vice Chair Bar's leadership with with input from the staff and you know, discussions with Governors on that committee and uh, I'm kept uh, broadly apprised about what's going on.

But the the bottom line is there. Nothing has been for, Nothing has been proposed to the board. Nothing has been formalized at this point. It's a lot of work that's going on I think discussions are going on, meetings with industry and that kind of thing.

When we get to that to the place where that's appropriate. Uh, you know the board will be carefully briefed. Ultimately, we'll vote on a proposal and that proposal will go out for common and we'll We'll solicit comment from any and all commenters and we'll look very carefully at that, so it'll be a wide open, open process in the sunshine. Thank you! Are you back now? Recognize the general General one from California the ranking member Frank Miss Waters thank you very much Chair Powell I Agree with what you said on February 1st that Congress must raise the debt limit because of what you described as a highly risky consequences of failing to you or perhaps the most important expert on the debt I Find it very confused to raise the debt limit is being ignored by my colleagues.

I'm also concerned that the consequences of this brinksmanship or imminent ratings said this week, they may seriously look at downgrading the U.S debt based on the escalating brinksmanship they are observing. Even if Congress ultimately addresses the debt limit at the last minute, this is history repeating itself standard and Poor's downgraded our debt back in 2011. When Republicans last controlled the house and threatened default, the bipartisan policy Center later found that the 2011 debt limit debate cost us 18.9 million billion dollars in higher borrowing costs even though we never defaulted. To put that into perspective, that could have been leveraged to provide up to 20 200 billion in loans to small businesses through the state Small Business Credit initiative or to provide hundreds of thousands of people down payment assistance to buy their first home.

So I want to emphasize that House Republicans including most of the Republicans on this committee had no qualms about paying our debts. When Trump was in office three times, they addressed the debt ceiling in a timely manner without holding our country hostage. But Republicans are now are ready to tear down the hard work of Americans everywhere to weather the pandemic and build back a strong recovery chair. Powell Can you describe for us the risk you see if Congress continues to delay actions on the debt limit both for our economy and for individuals and Families Let me start briefly by saying that we have no role and seek no role in what is really at the heart of fiscal policy exceptions.

So freaking political for them. This impacts everyone is just that. Congress Raising the debt ceiling is really the only alternative. There are no rabbits in hats to be pulled out on this too.

Really is just that no one should assume that the FED can protect the economy from from you know, the non-payment of of the government's bills, let alone a a debt default of some or something of that nature which we don't think will happen here. But no one should be thinking that we have the tools to to to protect the economy from all the potential effects of that. Thank you very much. I Don't want to miss uh, what you said I Uh, somewhat quoted you uh when you said that Congress must raise the debt limit because of what you described as a highly risky, risky consequence of failing to do so is that your language? well must in the sense that that's it's really the only way for for the debt limit to be raised as Congress has must act I I Again, these are fiscal discussions and we're not.

Don't We don't want to be a part of them. And uh, really, they're between. you know, elected officials, But you are an expert on the subject? Well, I spent a lot of time on this. As you'll recall, as an expert on this subject, you are concerned about the high risky, risky consequence of failing to do so.

Is that correct? Did I correctly quote you? That's correct. Thank you. Um, and so um, again, let me just go a little bit further. Um, the chair mentioned that he had either written a letter or maybe even had some conversation from Janet Yellen about order filled the time limits uh, that she had attempted to describe.

Is it your understanding that she said she could maneuver and kind of manipulate things so that she paid the bills that were coming due. but this could only last until about June Is that your understanding? Honestly I would really have to not try to interpret the secretary's words for you. She that's really up to her to do. Can she keep us afloat until about June So that's not for me to say, that's these are.

these are really questions for the secretary. I'm sorry, have you had any conversation with her about the statement that she made about being able uh to manipulate the debt and pay bills that were coming due out of another account. Etc Did you have that conversation with her? The conversations is that you and I have privately don't go anywhere I don't talk about them with anybody and the conversations I have with with secretary Yellen I don't I don't okay and I don't want to get yeah expired. Thank you Bud The gentle age times expired.

Did I have equal time with you? You sure Did he went over time I thought if I did thank you a yield back and I'll recognize the vice sure Mr Hill of Arkansas thank you Mr Chairman and uh thank you chair pal for being with us. You're welcome anytime. Don't wait till we ask if you want to volunteer and come we We love having your views on many topics. Thanks for talking about your commitment to price stability.

You know we've had this discussion last June between us of I Do think that's the primary mission of the Fed and I think it should be. The only priority of the FED is price stability because it's the Legislative branch and the Executive branch that really are responsible for quote Full Employment and having that policy, uh, environment and making sure that that's right. So your commitment to price stability is welcome by this committee. Yesterday in the Senate you uh, suggested that you supported a regulatory framework A broadly regulatory framework for digital assets.

Is that is that right? Yes. And is it your view that if we had a regulatory framework here in the United States for digital assets, that there'd be more transparency and rules of the road for both consumers, investors, and developers? Absolutely. And would it if we had those rules of the road for business seeking to use and develop blockchain as a potential new technology in their business and tokenized payments that again, that would be beneficial to business to know how to go about that yes, and to assure that it's all done in a safe and sound manner. When we're talking about Banks right and then as I My next point would be exactly that: to help Banks Investment Brokers Custodians understand, uh, how they could even participate in that market in a safe and sound manner.

You agree that a regulatory framework would help on that. Yes and then and then. Finally, we've grown up in our country and it's Unique in the world that we have a dual banking system. and due to a quirk here in Congress over a hundred years ago, we have insurance is regulated exclusively by the states.

So uh, would you believe that that regulatory framework would also have to preserve some sort of role? Uh, subject to safety and soundness? You know for State Hit him with some hard questions. that regulatory framework for digital assets I Uh, let me just say I think that it worked certainly. Works in banking and insurance I Have no problem with those, right? but you think it could? You consider it possible that it could also work in digital assets? Certainly possible. Yeah, thank you.

Um, it's been a subject here for nearly four years. Central Bank Digital Currencies Article one of the Constitution reserves coins and coins ichwitz money issuance to the Congress and we've in turn delegated that to the U.S Treasury which is since 1912, engaged the Federal Reserve as their Fiscal Agent Uh, you've testified here many times before that to issue a central bank digital currency that that would be have to be authorized by Statute by Congress Is that still your testimony? So that is absolutely the case. As it relates to a retail Cbdc, there are you know, potential little uh' forms of a wholesale Cbdc that would be we need to look at. It's less clear, but we've always been talking about retail Cbdc and that's uh, that's something we would certainly need Congressional approval for.

And what would be a parameter on something that's not a retail Cbdc. Where you think that that could be issued in some form or fashion without Congress's direct statutory authorization, it would. so it would be. For example, it would just be an Uh something between Banks so it would look an awful lot like a bank reserve And you you might ask, well, why would we need it and that's that's a really good question too.

Yeah, but it's just something that's literally within a wholesale Market But that speaks that you might have a blockchain between Banks and the Fed using a central bank digital currency token to settle transactions institutionally inside the Yeah. So that leads me to Fed now which is supposed to be up and running I think this summer somewhat behind the the scene there. uh I would like to ask you to formally have this full committee briefed on that by the Federal Reserve I know the chair of the Kansas City Bank was involved she's now left and I think the committee has a lot of questions about Fed now, how it, how its interoperability will work, how it's going to roll out, and also just a question that we've been asked that why the FED wire system isn't up 24 hours a day seven days a week now to benefit consumers that are using Venmo? Do you have a thought on that? I I'm not sure why we're not 24 7 on that, and we of course be delighted to come up and brief the committee on on Fed. That'd be good.

We'll take you up on that and the right person from the Fed. and Mr Chairman I Yield back gentlemen. Yeah, get us the good stuff. We want the fireworks I'm sorry the ranking member of the Capital Market subcommittee Mr Sherman of California or at least the market to do something.

uh Mr Chairman I Want to thank you for bringing to our committee's attention several years ago the importance of tough Legacy Libor some 16 trillion dollars of instruments where the Creditor wouldn't know how much the debtor was supposed to pay. Um, this committee we passed legislation over a year before the Libor hit the fan. Uh, you issued regulations seven months before the absolute deadline I Hope we do this in other areas and it's my understanding that with those final regulations were done. Uh and uh.

We've solved the the Libor issue. Uh, is that correct? That's my understanding as well. Good Um, people talk about inflation and they somehow say that it's a matter of the personalities and politics in the United States Others argue that the entire world is hit by inflation because Ukraine and Covid I think we've got the answer to this question. Uh, in that inflation is uh, considerably higher in the Eurozone than it is in the United States Uh today.

Uh, and it's very hard to say that Joe Biden is responsible for inflation in Germany Uh, I Commend the ranking member for bringing up the debt limit and the harm that's already done to our economy. If we solve the problem tomorrow, we had less investment than we would have had yesterday. Um, and I would say that I Commend the President. He's going to issue a budget plan tomorrow and perhaps in their time, one of our Republican colleagues can tell us when the Republican budget plan will be released.

We are all eagerly awaiting it. Housing is a huge part of inflation and it's We've left it to local government, but the permitting process there guarantees scarcity which guarantees uh High housing costs. Um, we've talked back in 2001 and several times. Uh, even before that about wire fraud and having just bought a home I saw the process up front.

Everybody's very nervous about one thing and that is will the buyer of the house be tricked into wiring their down payment to the wrong account? or will the seller the buyer be tricked into or the escrow agent be tricked into sending the money uh to someone other than the seller of the property. We talked about this back in 2001 where I urged you with your Fednow system which I'm glad is on track to move forward um, to have what the Brits have. When you send the wire, you identify not only the number of the account you're sending it to, but also the name of the person or entity that's supposed to receive that. Uh, at that time back in 2001, you said that payee matching is not the best way to do it.

There are other ways to do it and that you'd be happy to get back to me as to how you're going to make sure that a uh, an email, an email from a Nigerian Prince does not get uh, the wired funds particularly in a housing transaction wired to an account number that turns out to be in Legos Um, what progress do you have? When can when can home buyers have a system where they're sending it to a named payee as well as to a number? So we I hope we did come back in a timely way to you on that. Um, but uh, it's a it's a problem you've brought to our attention. You're right over many years and we continue to focus on on on that. Well, the bureau.

The bureaucrats who are working on this don't want to do what the Brits did. They've proven it might be done. You said you were going to accomplish the same goal in some other way and it has been a while and it's not solved, nor are you aware of any solution. I Would hope that you would go back and say we don't want to add this anxiety to every real estate transaction.

Um, we go back to the drawing boards, follow what the the Brits have done and have a matching. Uh, finally as to uh, crypto? Um, cryptocurrency to political insider trading. Let's chat about hidden money. That's what it means.

And crypto doesn't mean pose. Uh, know your customer and uh, anti-money laundering statutes to it. It won't be crypto anymore. What crypto wants is to have part of its ecosystem above the water line visible and subject to know your customer and then have the rest of the iceberg below the water line.

Um, I Will now, uh, go to the gentleman from Texas Mr Session for five minutes Chairman: McHenry Thank you very much Chairman Powell Thank you for joining us today. We appreciate not only robot just such a loss. They try to go long, but on this pullback it's got out. Chairman Powell I Know that the FED considers divergences and you talked about it in as you spoke in your opening statement about Consumer Price Index personal Consumer Expenditures Inflation GDP and all these things are talked about in your Uh report a Monetary Report March 3 2023 Thank you Uh, a couple days ago I had an opportunity to see that a an economist Art Laffer Arthur Laffer produced a report that spoke about literally this country doubling GDP Now I know we're putting CPI Pce inflation all these things into a mix but he said that if we made changes in health care to efficiencies, we could double the current GDP Rate my question to you that I hope you can answer is what do you think they're really all over the place? Is that something that is in this document that I have missed and it seemingly to a person who follows this as Art Lapper does for 50 years, what do you think is an important way to look at efficiencies in healthcare? Thank you So no that that's not in our in our Monetary Policy report uh I just say one thing and that is we do.

We do spend something like 1.7 sorry 17 or 18 in that range percent of GDP delivering Health Care other other similarly wealthy countries spend 10 percent. So it's the delivery system. It's not that the benefits are incredibly rich or anything like that, it's just that the delivery system is very expensive. That's a trillion dollars a year that we spend and get nothing for it.

This is fiscal policy. But I'm I'm responding to your so I would think that he may have meant that if we if we had a delivery system that that saved that that a trillion dollars that doesn't really get us anything. Uh then then that would be great for the economy which I would agree with. So you've spoken of supply chain disruptions because it in fact is an inhibitor or an accelerator as we gain that.

Advantage Market continues some scenes a little boring. so I just want to show you really quick Mr Lapper as he spoke about the huge Imports of this is that something you should start paying attention to to. Where policy people not only at the FED but your pressure on us to get to gain those efficiencies as a result of a global view. So on Supply chains generally they have suddenly been tremendously important.

Uh, in in inflation. As you know for the last dollar going up for the market coming down, we have been something that we stay frosty in terms of of healthcare delivery. That is strictly a question for you. and for you know the the parts of the government that are charged.

Whether the FED does not have a role to play and does not seek a role in that does not see a role and and get as I Look at this. you've got a role in projecting confidence. You've got a role in education. You've got a role in who's in the workplace.

You've got to roll my talk my Discu interest rates My and yet my point is, it's such a staggering number that impacts us. Uh, just love to have you go back. Perhaps we from this committee need to give you some direction on that, but I think you've your testimony today. It recognizes the Staggering impact on that I don't think it's political.

The answer may be political, but I think the actual numbers are not political. It's an inefficiency that is happening across the country, not a regional matter. And so I wanted to get your take on that and I appreciate you being here as always. thank you for your confidence and your hard work that you give this country market.

Mr Chairman yields back. We'll now recognize the ranking member of that agriculture committee. Mr Scott of Georgia for five minutes. Thank you very much Chairman and uh, welcome back Uh Chair Chairman Powell Now Chairman Powell Listen to me very carefully here.

Mr Scott's not messing around I Think we're on the verge of making a terrible mistake back in 2008 if you recall. uh Barney Frank then Ms Waters asked me to take a look and kind of work with you and the fed. You were a board member in 2008. and we came to the conclusion that we needed a more Equitable playing field between our large Banks like Goldman Sachs City Group and our regional and smaller Banks like truest and our Community Banks and we and we changed that.

But now I hear that the Fed and the FDIC plan to drop a new rule which seeks to apply the long-term and higher Capital requirements that were created and you and I did this back in 2008 and you'll remember that road created for the Goldman Sachs and for them and now we want to apply these rules to the regional Banks There's a big difference and we've omitted this difference. If you proceed in this manner I Think it's very misguided. It works and you and I worked on this. You recall this, you were a board member and we saw that we needed to have a better playing field to protect and if you all go along with this, it could put many of our regional Banks and small Community Banks out of business.

So I want you to reverse this? First of all, tell me am I speaking the truth? Are you all planning to all of a sudden here? put these smaller and Regional Banks under the same heavy or financial load as your large worldwide Banks Tell me no, we're not planning that we, um, we believe strongly and always have in tailoring to address the the different size and risk characteristics of financial institutions. and certainly nothing like that. for the Regionals they won't have anything like what the what the very large, most systemically important banks have in terms of overall regulation. Yeah, because I Remember clearly you and I were back I think we were on this side then talking about this in this same committee room and you worked with us on that I'm glad to hear that uh, where's that coming from I mean it's is a concern, it's just a Roamer As we're all concerned, Have there been any discussions about removing the Uh playing field and the guard rails we have here, the differentiations and the Uh requirements between the regional Banks Community Banks and your larger Global Banks There's not nothing to that you know.

Well, I would say this. We were required by the law now and and we're doing this. Dodd-Frank actually required us yes, suggested that we should tailor and then the S2155 then required it and anything that we do or effective reflect appropriate tailoring. All right.

So we we that's off the board. We're not going to change and put the smaller and Regional Banks under the same financial obligation role as a large Banks We got that right from you. correct? Yeah, that's right. All right.

good. Now let me turn to China I'm really worried about China and right now people may not know it. but China is the world's largest economy in terms of purchasing power Now at our last meeting I I Talked about this move where we didn't blow the balloon up and this is an example of what I was pointing out. guys.

so slow. speed it up there inspired. I Will now recognize the chair of the Science Committee official Lucas of Oklahoma for five minutes. Thank you Mr Chairman Quick shout out I Think we're about to break a personal record on Rumble we're about to cross 3 000 concurrent viewers on Rumble I'd have to ask my producer but I think this might be our record I don't know if I've ever had many, uh, this many.

so shout out to rumble Rumble chat going crazy. make sure you hit that sub button. We're on our way to 69 420 subs and then I can quit this career early in the review process of potential changes in capital requirements. Can you? uh? well, I'll ask anyway.

Can you commit to ensuring that these changes will not increase the cost for banks providing those commodity derivatives to end users? Okay, I I that's a really specific. uh, can I can I go look at that? I mean I'm not actually sure that that the work even addresses that. So um, fair point to come back to you on that. And that particular response makes me feel better because after all, those products are very important to my folks and make a great deal of difference in how they're able to address their issues.

So as you discussed earlier and as you've consistently assured the Fed's not a climate making policy maker, you and I have talked about this issue again many times in the past. However, I'm concerned that is that a trend line right now 398.50 to be laying the groundwork for climate related stress tests that would reduce access to capital for entire sectors of the economy. This would also open up the Federal Reserve potentially to political pressure and force the FED In fact, to make policy decisions related to climate change we've seen. for example, this Administration turned to Regulators to impose climate policy as an alternative to the legislative process Chairman: Powell How careful are you in ensuring that the FED does not Place itself into the climate debate.

And how can Congress ensure that the Fed's regulatory oh brother is not, shall we say warped into creating uh climate policy outcomes? So I think we do have a narrow uh, but real role there which is around Bank supervision making sure the banks understand and can manage their their risks over time from climate. I Think my colleagues and I all understand that it's a it's a certain Market that we're playing and that we we're not looking to uh, you know, move into an area where we come where we're actually becoming a climate policy maker. I Would completely agree with you that over time that border needs to be very carefully guarded and I I will tell you that I will I will do that as long as as long as I'm at the Board of Governors I Very much appreciate that, because again, it's a very important issue to the Third District of Oklahoma traditional production, agriculture, oil and gas and the actions that the FED takes have a significant impact back home. So it's vital that we resist the demands to do that sort of thing now or in the future.

and I very much appreciate that response. and with that, I'll yield back the balance of my time. Mr Chairman Gentleman yields back. the gentleman from Massachusetts the ranking member of the Digital Asset subcommittee Mr Lynch is recognized for five minutes.

Thank you Mr Chairman and uh, brutal last name. For your willing to come here, you might want to change that one brother. Oh, last week the Treasury Department announced that leaders from Treasury will begin to meet regularly with leaders. Yeah, no, you got to change that, Especially when you look that way the way he looks.

You got to change that one. Central Bank Digital currency and other uh payment Innovations in the statement uh, it was mentioned and I'll quote from it Ricky said I can't that the fed them to provide periodic public updates as it continues its research and its technical experimentation on Central Bank digital currencies I was wondering uh, first of all, when you might be expecting to share some of these public updates uh What's the timing on that? So we did go out for for comment uh in General on a Cbdc a year or so ago and I do expect we'll go out I don't I can't give you a date, but we'll certainly go out and you know, engage. We we engage with the public on an ongoing basis. Yeah, we are.

We're also doing research on policy and also on technology. That's what we're up to. I'm aware of the the Boston Fed has a partnership there. Uh, the the Uh Hamilton project over there with the folks from MIT uh Media Lab.

They're doing a great job, but you know it says here that the discussions would include uh, technical experimentation I Was just wondering at what level are you talking about making decisions on architecture for a Cbdc, a retail? CBD We're not. We're not at the stage of making any real decisions. What we're doing is experimenting in kind of early stage experimentation. How would this work? Does it work? What's the best technology? What's the most efficient? We're really at an early stage on, but we're making progress on sort of technological issues.

The policy issues are equally important, though. You know we haven't decided that this is something that the financial system in the country want or need, right? So that's going to be very important, right? Well, I think I speak for the Chairman as well. Uh, would love to have more dialogue with the FED on on that and maybe bring in the folks from MIT as well and just make sure that Congress and this committee is as up-to-date as Uh as others. Uh, let me switch over to Uh Fed.

Now There are some champions of digital currency and stable coins, in particular that Uh continue to cite the need for faster Payment Systems. However, as Uh was earlier mentioned, the FED Now is a service that the FED is working on to finalize that will allow for instant payments between bank accounts and the FED has a Target release date of Fast I said now, uh, between May and July which is high around the corner. Do you see any reason why cryptocurrencies would provide faster payments than the FED Now system? Uh, and uh, with this offer, with the transparency of Fat now would it offer distinct advantages over some of these stable coins that are touting faster payments? So what Fednow will do is it will enable all the banks any Bank in the United States not just the big ones to offer instant, you know, instantly available funds and real-time payments to their customers. That's that's what it will do.

so that's that's a great thing. Spies barely holding on here. Cbdc would serve some of that. but a CD Cbdc is going to be years in the evaluation and you know I think we can get this into the hands of the public very quickly and I think we'll have real-time payments in this country very very soon.

And so that that's a good thing? it is. You know I do have an overriding question, and that is you know, before the Greenback uh, everybody had their own currency. You know you had rail, com, rail companies, you had coal companies, you had uh, you know, State Banks that were authorized to issue their own currency. But but when the Greenback came out, uh, all of those various currencies went to zero because everyone had.

You know, because the Greenback had the full faith and credit of the United States behind it. I'm worried about a lot of these stable coins and and other cryptocurrencies. Uh, do they go to zero When when we come up with a Cbdc that has the full faith and credit of the United States behind it? That's and we've got thousands of these out there. and you've got people investing millions and millions of dollars in these well trillions right now.

Uh, and I'm just I'm just thinking if we had those those advantages built into a uh, you know, a Cdbc, wouldn't those Alternatives go to zero if they did not have the transparency and the full faith and credit that that we enjoy. So certainly unbacked cryptocurrencies that don't have any intrinsic value, but nonetheless trade for a positive number? Um, those those have never understood the valuation of those stable coins are actually many of them are really they're They're drawing on The credibility of the dollar they have. They have Dollar based their dollar denominated mainly dollar based reserves. although we don't know what's in the reserves because there's no regulation.

Gentleman's times expired. The gentleman from Missouri Mr Lukemeyer is recognized for five minutes the chair of the National Security subcommittee. Thank you Mr Chairman and thank you Chairman foul for being here This morning. the reserve currency status of the dollar uh, to U.s's enormous financial and National Security benefits.

In the wake of Russia's unprovoked invasion of Ukraine, the FED took action to prevent the Kremlin from accessing more than 300 billion dollars in reserves roughly half of Russia's Reserves. However, this led to an accelerated effort by countries like China to de-dollarize their official foreign exchange reserves. Just last week, there was an article in the Wall Street Journal titled Russia terms to the Yuan in an effort to ditch the dollar. Not only that, but China's President Xi Jinping published for the Settlement of Energy Trip pushed for the settlement of energy trades in the Chinese Yuan at a summit with Arab leaders in December.

The question is are you concerned about these actions by Russia and China to push to establish different reserves and conduct transactions in non-us dollars? So the uh, the US dollar is the the widely accepted and really the only serious candidate for for the world's principal Reserve currency. And that's uh, that's because of our Democratic institutions, our liquid markets, the rule of law, and all those kinds of things and also the fact that the the dollar has held its value over time. So other countries um, who are competing on other other Playing Fields may want to. They want to establish different currencies, but really, the dollar is a little bit of a popular catching itself National Commerce because we have those aspects and other countries don't.

Well, that's true to now. But my question is are you concerned about the actions these countries? Uh, because if they they see themselves being challenged or are concerned for instance, if China would invade Taiwan um, you know as Russia invaded Ukraine there were some sanctions put on and I don't disagree with the sanctions. The last time you were here though, Mr Chairman I asked a question because it's an instructive moment for us. The standpoint that knowing that we put sanctions and on on Russia all other different accounts as