CSPAN3 — Public Affairs Events
20260915 022400 UTC
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[00:00:01] OR NOT AN INDIVIDUAL IN
[00:00:01] ARGENTINA, ZIMBABWE, KAZAKHSTAN
[00:00:06] IS USING A U.S. DOLLAR BACKED STABLECOIN? I THINK YOUR TESTIMONY ACTUALLY EXEMPLIFIES THIS ABOUT THE
[00:00:10] IMPORTANCE. COULD YOU ADD SOME COLOR? IS TO WHY THAT ACTUALLY MAKES
[00:00:12] LIFE MORE AFFORDABLE FOR SOMEBODY IN KENOSHA, WISCONSIN,
[00:00:17] WHEN AN INDIVIDUAL OUTSIDE THE UNITED STATES IS USING A U.S.
[00:00:20] DOLLAR BACKED STABLECOIN OR U.S. REGULATORY REGIME?
[00:00:24] WELL, FIRST OF ALL, THANK YOU. THANK YOU SO MUCH FOR YOUR
[00:00:26] LEADERSHIP, CONGRESSMAN STYLE ON ALL OF THESE ISSUES.
[00:00:29] AND IN SOME WAYS, THIS HITS A LITTLE CLOSE TO HOME, BECAUSE AS
[00:00:33] IT TURNS OUT, MY BROTHER AND SISTER IN LAW AND THEIR TWO YOUNG DAUGHTERS LIVE IN KENOSHA,
[00:00:38] WISCONSIN. AND THE REASON, OF COURSE, IS THAT THE MORE DOLLARS WE HAVE
[00:00:41] OUT THERE IN THE WORLD, THE MORE PEOPLE ARE USING THE U.S. DOLLAR
[00:00:45] IN THE GLOBAL SOUTH AND IN ASIAN FINANCIAL MARKETS.
[00:00:48] THE MORE THE DOLLAR IS THE
[00:00:51] WORLD'S RESERVE CURRENCY AND
[00:00:55] THEREFORE BORROWING COSTS ARE LOW, BORROWING COSTS ARE LOW HERE FOR THE UNITED STATES.
[00:00:59] BUT THAT IS PASSED ON TO CONSUMERS.
[00:01:01] SO THE PRICE OF GAS IN KENOSHA AND IT ACTUALLY IS MUCH CHEAPER,
[00:01:04] BY THE WAY, OVER THE BORDER IN WISCONSIN THAN IN ILLINOIS,
[00:01:08] WHERE I LIVE. THAT IT'S NEVER TOO LATE TO MOVE NORTH.
[00:01:12] I THAT THAT THAT IS RELATED TO
[00:01:14] THE FACT THAT, AGAIN, THE DOLLAR IS THE WORLD'S RESERVE CURRENCY.
[00:01:17] AND SO ALL OF THE BORROWING RATES THE FACT THAT THE UNITED
[00:01:20] STATES ENJOYS THAT BECAUSE THERE'S DEMAND FOR THE DOLLAR,
[00:01:22] ALL OF THAT COMES TO CITIZENS EVERYWHERE, INCLUDING THERE IN
[00:01:25] KENOSHA, THAT SHOWS UP IN THE PRICE OF OIL. WHAT DOES THAT DO IF SOMEBODY
[00:01:29] GOES TO BUY TO GET A HOME LOAN? THE TEN YEAR TREASURY OBVIOUSLY
[00:01:32] CONNECTED TO TO A 30 YEAR HOME LOAN. SO SOMEBODY WANTS TO GO BUY A HOUSE, YOU WISE UP, YOU MOVE
[00:01:36] FROM ILLINOIS TO WISCONSIN, JUST NORTH YOU GO AND YOU GET A HOME
[00:01:40] LOAN OR A REGULAR PERSON DOES WHO'S EMPLOYED IN THE GREAT
[00:01:44] STATE OF WISCONSIN. WHAT IS THE IMPACT ON SOMEBODY GETTING A HOME LOAN IF MORE AND
[00:01:48] MORE PEOPLE ARE ENGAGED IN IN U.S. DOLLAR BANKS, PEOPLE GOING
[00:01:51] AGAIN OUTSIDE THE UNITED STATES, ALL THINGS BEING EQUAL, THAT RATE IS LOWER. YOU CAN'T SEE IT.
[00:01:55] BUT WHAT YOU WOULD SEE IS THAT IF WE LOST THE RESERVE STATUS,
[00:01:58] IF WE LOSE THE DOLLAR AND THAT'S WHY DOLLAR STATE CRAFT IS SO
[00:02:02] IMPORTANT, THE CONSEQUENCES WOULD GO THROUGHOUT OUR ECONOMY
[00:02:05] AND BE BORNE BY AMERICAN FAMILIES AND WORKERS.
[00:02:08] I WANT TO STAY ON THE STABLECOIN PIECE FOR A MINUTE.
[00:02:11] IN PARTICULAR, JEN, TAKE I THIS IS SOMETHING THAT COULD BE
[00:02:15] TRANSFORMATIVE. WE'RE ALL KIND OF LOOKING AND EXPLORING, TRYING TO UNDERSTAND THIS.
[00:02:19] HOW IMPORTANT IS IT TO HAVE A
[00:02:20] U.S. REGULATORY REGIME WITH U.S.
[00:02:24] DOLLAR BACKED STABLECOIN AS ITS FOCUS?
[00:02:26] AS WE LOOK AT POTENTIAL GROWTH AND DEVELOPMENT AND THE AGENDA I
[00:02:30] SPACE, IT'S ABSOLUTELY CRITICAL,
[00:02:32] WHICH IS WHY THE GENIUS ACT IS CRITICAL AND WHY THE CLARITY
[00:02:35] WHAT WOULD HAPPEN IF WE DIDN'T HAVE IT IN PLACE. RIGHT. WE HAD A LOT OF DISCUSSION IN
[00:02:39] THIS ROOM ABOUT WHETHER OR NOT WE SHOULD PROVIDE RULES AND REGULATIONS IN PLACE, PROTECT
[00:02:43] CONSUMERS, MAKE SURE THAT THINGS ARE OPERATING UNDER A U.S.
[00:02:47] REGULATOR FREE FRAMEWORK. WHAT WOULD HAPPEN IF WE IF WE HAD NOT PASSED GENIUS, LET'S DO
[00:02:51] THE COUNTERFACTUAL AND THE AGENDA GUY BEGINS TO PICK THIS UP.
[00:02:55] WHAT'S THE WHAT WOULD HAVE BEEN THE RISK TO U.S. CONSUMERS? I'D SAY TWO BIG RISKS.
[00:02:58] THE FIRST IS THE DOLLAR COULD BE USED, BUT IT WOULDN'T BE DOLLARS
[00:03:02] THAT ARE HELD TO THE SAME STANDARDS OF THE GENIUS ACT. IT COULD BE OFFSHORE DOLLARS
[00:03:05] THAT ARE BACKED ENOUGH BY NOTHING AND ESSENTIALLY PUT THE
[00:03:09] GLOBAL ECONOMY AT RISK, AS WELL AS THAT UNDERMINE THE DOLLAR ITSELF.
[00:03:12] SECOND, BIG RISK WOULD BE ANOTHER CURRENCY.
[00:03:16] OTHER THAN THE DOLLAR TAKES PLACE. WE KNOW THERE ARE STRATEGIC COMPETITORS OUT THERE THAT WOULD
[00:03:19] BE MORE THAN HAPPY TO HAVE THEIR OWN DIGITAL CURRENCY AND ARE
[00:03:23] ACTIVELY PUSHING IT. DO YOU THINK THERE SHOULD BE
[00:03:25] MORE WORK DONE IN THIS BROADER SPACE?
[00:03:29] IS RELATES TO SETTLEMENT TRIGGER
[00:03:31] SMART CONTRACT.
[00:03:34] AS WE THINK ABOUT A CHANGING AI AND THE USE OF US DOLLAR BACKED STABLECOINS? ABSOLUTELY.
[00:03:37] WE'RE IN THE EARLY INNINGS, BUT IT'S IMPORTANT THAT WE LEAD JUST
[00:03:41] LIKE WE'VE LED IN PAYMENTS STABLECOINS, JUST LIKE WE'VE LED
[00:03:45] IN THE GLOBAL FINANCIAL SYSTEM. OF COURSE, LYN'S TESTIMONY IS REALLY IMPORTANT BECAUSE YOU
[00:03:48] HAVE THE NEW YORK STOCK EXCHANGE
[00:03:50] MOVING INTO TOKENIZATION AND SO
[00:03:54] ABSOLUTELY GENTING WILL COME NEXT.
[00:03:57] I APPRECIATE YOUR TESTIMONY. APPRECIATE EVERYBODY FOR BEING HERE.
[00:03:59] I THINK THERE IS REAL BENEFITS TO HAVING A U.S. REGULATORY
[00:04:03] REGIME AND U.S. DOLLAR BACKED STABLECOIN DOESN'T ALWAYS SHOW UP IMMEDIATELY UNTIL YOU THINK
[00:04:07] ABOUT IT, BUT IT DOES SHOW UP IN EVERYDAY LIVING FROM GAS PRICES
[00:04:11] TO HOUSING AFFORDABILITY. APPRECIATE ALL YOUR TESTIMONY, MR. CHAIRMAN. I YIELD BACK.
[00:04:15] THE GENTLEMAN YIELD BACK. THE CHAIR RECOGNIZES THE RANKING
[00:04:17] MEMBER OF OUR SUBCOMMITTEE ON FINANCIAL INSTITUTIONS, DR.
[00:04:21] FOSTER OF ILLINOIS, FOR FIVE MINUTES. THANK YOU.
[00:04:25] AND THANK YOU TO OUR WITNESSES. YOU KNOW, I THINK WHEN THEY
[00:04:28] WRITE THE HISTORY OF THIS CONGRESS, THE NOTABLE
[00:04:31] ACHIEVEMENTS WILL BE THE BIPARTISAN ONES, PRINCIPALLY THE HOUSING BILL.
[00:04:34] AND I THINK THAT'S IMPORTANT. IT'S OUR INTENTION.
[00:04:36] I HOPE TO TRY TO CARRY THAT RECORD FORWARD IN THE NEXT
[00:04:41] CONGRESS. MR. TARBERT, I REALLY AGREE THAT
[00:04:44] THE DOMINANCE OF THE US DOLLAR IS A STRATEGIC ASSET TO OUR
[00:04:48] NATION. YOU MENTIONED IN YOUR TESTIMONY THE DOLLAR QUOTE, STANDS LESS ON
[00:04:52] THE ON THE PROCLAMATION THAN ON THE QUALITY OF THE LAW AND THE
[00:04:56] INSTITUTIONS BEHIND IT. AND THE PROBLEM IS, OF COURSE, THAT THIS ADMINISTRATION IS
[00:05:00] ASSAULTING BOTH OF OUR LAWS, BOTH OUR LAWS AND OUR INSTITUTIONS.
[00:05:03] YOU OPERATE INTERNATIONALLY. YOU KNOW, THE INTERNATIONAL ATTITUDE TOWARD THIS
[00:05:07] ADMINISTRATION, THEY ARE HORRIFIED AND THEY ARE DISGUSTED.
[00:05:10] NOW, WHEN THE PRESIDENT PROCLAIMS THAT IN ADDITION TO
[00:05:14] HIS FAMILY'S PERSONAL CONFLICTS OF INTEREST, WHICH HE CLAIMS NO
[00:05:18] ONE CARES ABOUT, THAT HE CLAIMS HE WILL NO LONGER ENFORCE THE
[00:05:20] FOREIGN CORRUPT PRACTICES, HIS ACT OR THE CORPORATE
[00:05:23] TRANSPARENCY ACT THAT ATTEMPTS TO PREVENT ANONYMOUS SHELL
[00:05:26] CORPORATIONS FROM OPERATING IN THE UNITED STATES.
[00:05:29] DOES GUTTING THESE STATUE ROOTS SUPPORT AMERICAN ECONOMIC
[00:05:33] DOMINANCE AND THE RULE OF LAW?
[00:05:35] ULTIMATELY, IT'S A DECISION FOR
[00:05:37] CONGRESS AND THE PRESIDENT. THE PRESIDENT HAS DECIDED NOT TO
[00:05:41] ENFORCE WHAT CONGRESS PASSED. ALL RIGHT. DOES THIS HELP OR DOES THIS HURT
[00:05:44] THE REPUTATION OF THE UNITED STATES AND THE DOMINANCE OF THE
[00:05:49] DOLLAR. I THINK ALL THINGS BEING EQUAL, THE LAWS THAT CONGRESS PASSED
[00:05:53] SHOULD BE EXECUTED AND EXECUTED WELL. RIGHT.
[00:05:55] AND WHEN THAT DOESN'T HAPPEN, IT HURTS AMERICAN DOLLAR DOMINANCE.
[00:05:59] SO THIS IS NOT JUST ME OR NOT JUST DEMOCRATS. AND ACCORDING TO A SURVEY OF
[00:06:03] CENTRAL BANKERS BY THE MONETARY AND FINANCIAL INSTITUTIONS FORM
[00:06:06] I'M FISH, A RECORD NUMBER OF CENTRAL BANKS PLAN TO CUT THEIR
[00:06:10] DOLLAR ALLOCATIONS IN THE COMING DECADE.
[00:06:13] 79% OF CENTRAL BANKS AND 60% OF PUBLIC FUNDS BELIEVE THE
[00:06:17] MONETARY THE GLOBAL MONETARY
[00:06:19] SHIFTING IS TRANSITIONING AWAY FROM A DOLLAR DOMINATED SYSTEM
[00:06:23] TO A MULTIPOLAR WORLD. SO THIS IS HAPPENING AND IT'S
[00:06:26] HAPPENING BECAUSE OF THE ACTIONS OF THIS ADMINISTRATION, AND IT
[00:06:29] IS A MORTAL THREAT TO THE LONG TERM ECONOMIC HEALTH OF OUR COUNTRY.
[00:06:33] HOW DO YOU BELIEVE WE SHOULD RESPOND TO THIS?
[00:06:34] MR. HAMILTON PROFESSOR HAMILTON,
[00:06:38] WHAT'S THE RIGHT ANSWER TO THAT? I THINK YOU'RE ABSOLUTELY RIGHT.
[00:06:42] I THINK MORE BROADLY, TRADE
[00:06:45] WARS, PHYSICAL WARS AND VULGAR DIPLOMACY IS NOT HELPING THE
[00:06:49] DOLLAR, BUT HURTING THE DOLLAR. I THINK THAT, YOU KNOW, I'D GO A
[00:06:53] STEP FURTHER AS WE THINK ABOUT STABLECOINS AND OTHER OTHER
[00:06:57] COMPETING FORMS WITH OUR U.S. TREASURY.
[00:06:59] I THINK WE NEED TO BE CAREFUL HERE AS WELL. I THINK PART OF THE REASON THE
[00:07:03] DOLLAR'S STRONG IS IF THERE IS A
[00:07:05] CASE FOR MONOPOLY WITH REGARDS
[00:07:08] TO CURRENCY, THAT IS WHERE THE U.S. GOVERNMENT SHOULD HAVE A MONOPOLY.
[00:07:12] YEAH, AND THANK YOU. WE WERE JUST TALKING EARLIER
[00:07:14] ABOUT A GENDER GUY, WHICH EVERYONE AGREES IS GOING TO SORT
[00:07:18] OF DOMINATE. AND WHEN MY AGENTS STARTS TALKING TO YOUR AGENT, THE VERY
[00:07:22] FIRST QUESTION THAT IT ASKS IS, WHO THE HECK ARE YOU?
[00:07:26] AND HOW DO WE KNOW THAT THE GENDER IDENTITY IS CRUCIAL?
[00:07:28] AND THAT'S ACTUALLY HOLDING UP A LOT OF PROGRESS IN GETTING THAT IN.
[00:07:31] BUT IF THE ANSWER FOR THIS AGENT I'M TALKING TO IS, OH, I
[00:07:34] REPRESENT AN ANONYMOUS SHELL CORPORATION, HOW CAN THAT
[00:07:38] POSSIBLY WORK? YOU NEED TO HAVE A LEGALLY TRACEABLE PERSON BEHIND EVERY
[00:07:41] AGENT THAT ATTEMPTING TO OPERATE AND FINANCE.
[00:07:45] AND SO IT'S ANOTHER THING THAT'S IS BEING HURT BY THE PRESIDENT'S
[00:07:49] REFUSE OR TO, YOU KNOW, OPERATE
[00:07:50] WITH A BASIC PRINCIPLES OF
[00:07:53] BUSINESS INTEGRITY IN THIS
[00:07:55] PERSONAL FINANCES OR IN THOSE IN THE LAWS HE'S DECIDING TO ENFORCE.
[00:08:00] AND THAT HURTS. NOW, LET'S MISS BARTON.
[00:08:02] YOU KNOW, THE INTEGRITY OF OUR MARKETS ARE CRUCIAL.
[00:08:06] AND WHEN THE PRESIDENT ANNOUNCES THAT HIS PRIVATE SOCIAL MEDIA
[00:08:10] THING IS GOING TO RELEASE
[00:08:12] INFORMATION BASED ON BASED ON,
[00:08:14] YOU KNOW, GIVE EARLY ACCESS TO SOME PLAYERS WHO ARE WILLING TO
[00:08:18] PAY FOR IT BASED ON HIS OFFICIAL ACTIONS THAT HE'S TAKING IN
[00:08:22] RETURN FOR, YOU KNOW, MANY TENS OF THOUSANDS OF DOLLARS.
[00:08:25] I THINK A MONTH AS SUBSCRIPTION.
[00:08:27] DOES THAT DO YOU THINK THAT
[00:08:29] GENERATES CONFIDENCE IN THE INTEGRITY OF THE US MARKETS?
[00:08:33] I CAN'T COMMENT ON ANY SPECIFIC PRODUCT.
[00:08:37] OKAY. SO YOU YOU CAN'T COMMENT THAT
[00:08:39] YOU HAVE AN OPINION, YOU HAVE TO GIVE IT. DO YOU HAVE AN OPINION OR DO YOU
[00:08:43] THINK IT'S JUST OKAY? WELL, I THINK AT THE NEW YORK
[00:08:47] STOCK EXCHANGE, WE TAKE OUR RULES AND THE ENFORCEMENT OF OUR
[00:08:51] RULES VERY SERIOUSLY.
[00:08:53] AND THAT EXTENDS TO NEFARIOUS
[00:08:56] BEHAVIOR IN MARKETS. BUT I CANNOT COMMENT ON THE
[00:08:58] SPECIFIC PRODUCT YOU MENTIONED. OKAY. AMAZON GRANTED, YOU KNOW, AND
[00:09:02] WHEN I VISIT YOU, WHEN YOU'RE RUNNING THE CPB, I THOUGHT,
[00:09:05] OKAY, YOU WERE A CONSERVATIVE, BUT YOU'RE DOING A DECENT JOB OF RUNNING A QUALITY ORGANIZATION
[00:09:10] THAT THAT REALLY HELPED A LOT OF AMERICAN CONSUMERS.
[00:09:13] SO HOW DID YOU FEEL WHEN YOU SAW
[00:09:15] THAT THE DODGERS AND RUSSELL BOTH HAD THE INTENTION TO REDUCE
[00:09:18] THE CAP TO FIVE PEOPLE IN A TELEPHONE?
[00:09:23] CONGRESSMAN, THE CFP WAS GIVEN AN IMPORTANT MISSION BY CONGRESS
[00:09:26] AND THE CONGRESS ALSO INSULATED IT FROM OVERSIGHT. THAT IS CRITICAL.
[00:09:30] LIKE THE POWER OF THE PURSE. TIME HAS EXPIRED. THE CHAIR RECOGNIZES THE
[00:09:35] GENTLEMAN FROM SOUTH CAROLINA, MR. TIMMONS, FOR FIVE MINUTES. THANK YOU, MR. CHAIRMAN.
[00:09:39] THANK YOU. THE WITNESSES FOR JOINING US TODAY. THE WORK DONE BY OUR COMMITTEE,
[00:09:42] THIS CONGRESS, HAS MADE CLEAR THAT REPUBLICANS AND THIS ADMINISTRATION ARE FOCUSED ON
[00:09:46] FINDING SOLUTIONS THAT DELIVER FOR THE AMERICAN PEOPLE, PARTICULARLY IN FINANCIAL SERVICES.
[00:09:50] OUR WORK ON INNOVATION AND DIGITAL ASSETS IS HELPING ENSURE
[00:09:53] THAT AMERICA REMAINS THE GLOBAL LEADER IN FINANCIAL TECHNOLOGY
[00:09:56] BY PROVIDING GREATER CLARITY AND EMBRACING EMERGING TECHNOLOGIES.
[00:09:59] WE ARE CREATING AN ENVIRONMENT WHERE BUSINESSES CAN INVEST,
[00:10:03] GROW AND CREATE JOBS HERE AT HOME. THIS IS ABOUT KEEPING AMERICA
[00:10:06] COMPETITIVE, STRENGTHENING OUR FINANCIAL MARKETS, AND MAKING SURE THE NEXT GENERATION OF
[00:10:10] FINANCIAL INNOVATION HAPPENS HERE IN THE UNITED STATES.
[00:10:13] MR. TARBERT, LET'S START WITH YOU. THIS CONGRESS HAS MADE
[00:10:16] SIGNIFICANT PROGRESS IN ESTABLISHING THE RULES NEEDED FOR THE UNITED STATES TO LEAD IN
[00:10:20] DIGITAL FINANCE. THE GENIUS ACT HAS ESTABLISHED A
[00:10:23] FEDERAL FRAMEWORK FOR PAYMENT STABLECOINS.
[00:10:25] AND THE HOUSE HAS PASSED THE CLARITY ACT TO PROVIDE GREATER CERTAINTY AROUND DIGITAL ASSET
[00:10:29] MARKETS. THESE EFFORTS ARE GIVING INNOVATORS AND FINANCIAL
[00:10:33] SOLUTIONS CLEAR RULES OF THE ROAD AND HELP ENSURE THE NEXT
[00:10:37] GENERATION OF FINANCIAL INNOVATION HAPPENS HERE IN THE UNITED STATES.
[00:10:40] MY QUESTION IS THIS. YOU'VE SPOKEN ABOUT THE IMPORTANCE OF STABLECOINS AND
[00:10:44] DIGITAL ASSETS TO THE FUTURE OF THE GLOBAL FINANCIAL SYSTEM.
[00:10:46] AS OTHER COUNTRIES MOVE QUICKLY TO ESTABLISH THEIR OWN DIGITAL
[00:10:49] ASSET FRAMEWORKS, HOW IMPORTANT IS IT FOR THE UNITED STATES TO
[00:10:53] PROVIDE DURABLE REGULATORY CERTAINTY SO AMERICAN COMPANIES
[00:10:55] CAN COMPETE GLOBALLY AND ENSURE
[00:10:57] THE DOLLAR REMAINS AT THE CENTER OF THE DIGITAL FINANCIAL SYSTEM?
[00:11:02] CONGRESSMAN TIMMONS, THANK YOU FOR YOUR LEADERSHIP.
[00:11:04] IT IS ABSOLUTELY CRITICAL.
[00:11:06] I COULDN'T AGREE MORE.
[00:11:09] YOU'VE SERVED AS BOTH CFTC
[00:11:11] CHAIRMAN AND A SENIOR TREASURY OFFICIAL, INCLUDING A TIME WHEN
[00:11:15] POLICY MAKERS WERE STILL WORKING THROUGH HOW DIGITAL ASSETS SHOULD FIT WITHIN OUR FINANCIAL
[00:11:19] SYSTEMS. FROM YOUR PERSPECTIVE, HOW DOES THE APPROACH TODAY COMPARE WITH
[00:11:22] WHAT YOU SAW DURING YOUR TIME AT TREASURY AND THE CFTC?
[00:11:26] AND HOW WOULD CLEAR LINES OF REGULATORY AUTHORITY HELP THE
[00:11:29] UNITED STATES COMPETE ON A GLOBAL SCALE?
[00:11:31] WELL, IT'S FAR BETTER THAN THE TIME WHEN WE DIDN'T HAVE THE
[00:11:35] GENIUS ACT, FOR EXAMPLE, THE GENIUS ACT BEING PASSED GIVES
[00:11:38] CONGRESS POLICY DECISIONS TO THE
[00:11:41] EXECUTIVE BRANCH TO EXECUTE AND
[00:11:43] EXECUTE FAITHFULLY AND ENDS A
[00:11:45] LOT OF THE CONFUSION AS TO WHAT'S CLASSIFIED AS WHAT.
[00:11:49] AND THAT'S WHY THE CLARITY ACT, TO YOUR POINT, IS SO IMPORTANT,
[00:11:51] BECAUSE THERE'S STILL CONSIDERABLE CONFUSION OUT THERE
[00:11:55] AS TO WHAT IS A SECURITY VERSUS WHAT IS A COMMODITY.
[00:11:58] THE REGULATORS ARE DOING THEIR BEST, BUT IN THE ABSENCE OF CLEAR DIRECTION FROM CONGRESS,
[00:12:02] IT'S PRETTY DIFFICULT. AND THE AMERICAN PEOPLE, I
[00:12:05] THINK, LOOK TO CONGRESS TO MAKE THESE CORE POLICY DECISIONS AND
[00:12:09] CREATE THE FRAMEWORK.
[00:12:10] IN OTHER AREAS, THEY SIMPLY DON'T HAVE THE RULEMAKING
[00:12:14] AUTHORITY BECAUSE THEY DON'T HAVE THE JURISDICTION. THE CFTC FOR SPOT MARKET, FOR
[00:12:17] DIGITAL COMMODITIES, FOR EXAMPLE. SO THERE'S NO RULEMAKING AT ALL
[00:12:21] TO BE DONE BECAUSE THEY SIMPLY DON'T HAVE THE JURISDICTION. WELL, IT SEEMS THAT THINGS ARE
[00:12:25] MOVING IN THE RIGHT DIRECTION, SO WE'VE GOT TO CONTINUE THE
[00:12:28] WORK THAT WE'RE DOING ON HOUSING.
[00:12:32] DO THE BACK AND FORTH WITH OUR SENATE COLLEAGUES. WE WERE ABLE TO ADVANCE
[00:12:35] BIPARTISAN LEGISLATION FOCUSED ON ONE OF THE MOST FUNDAMENTAL
[00:12:38] CHALLENGES FACING AMERICAN FAMILIES TODAY THE SHORTAGE OF HOUSING, THE 21ST CENTURY ROAD
[00:12:42] TO HOUSING ACT BECAME LAW THIS YEAR, WITH PROVISIONS FOCUSED ON
[00:12:46] INCREASING HOUSING SUPPLY, STREAMLINING THE DEVELOPMENT
[00:12:48] PROCESS, MODERNIZING FEDERAL HOUSING PROGRAMS, AND IMPROVING
[00:12:52] ACCESS TO MORTGAGE CREDIT. MR. POLLACK, GIVEN YOUR DECADES
[00:12:55] OF EXPERIENCE IN HOUSING FINANCE AND YOUR TIME AT THE TREASURY DEPARTMENT, I WOULD LIKE TO GET
[00:12:59] YOUR PERSPECTIVE ON THE CHALLENGES THAT REMAIN. AS WITH ANY MAJOR PIECE OF
[00:13:03] LEGISLATION WE WORK ON IN WASHINGTON, ONE OF OUR BIGGEST
[00:13:05] RESPONSIBILITIES IS EXPLORE MEANING TO THE FAMILIES IN OUR
[00:13:08] DISTRICT HOW THE WORK WE DO WILL ACTUALLY BENEFIT THEM.
[00:13:12] NOW THAT THE 21ST CENTURY ROAD TO HOUSING ACT HAS BEEN SIGNED INTO LAW, COULD YOU HIGHLIGHT
[00:13:15] SOME OF THE PROVISIONS IN THIS BILL THAT YOU BELIEVE WILL HAVE
[00:13:19] THE GREATEST IMPACT ON HOUSING AFFORDABILITY AND NEW HOME
[00:13:21] CONSTRUCTION, PARTICULARLY FOR FAMILIES AND COMMUNITIES IN MY
[00:13:25] DISTRICT BACK IN SOUTH CAROLINA? THANK YOU, CONGRESSMAN.
[00:13:29] WE MENTIONED BEFORE IN GENERAL
[00:13:31] THE ATTEMPT TO STREAMLINE AND
[00:13:36] APPROVALS STUDIES AND REGULATION
[00:13:38] WHICH WILL BENEFIT EVERYBODY. A PARTICULAR CASE ON THE
[00:13:42] AFFORDABLE END ARE THE
[00:13:44] PROVISIONS AROUND.
[00:13:48] AROUND MOBILE HOMES OR
[00:13:50] MANUFACTURED HOUSING, WHICH SHOULD I THINK, SHOULD HAVE A
[00:13:54] MATERIAL EFFECT.
[00:13:57] THERE THE THE THE BILL CONTAINS
[00:13:59] A LOT OF STUDIES OF INTERESTING IDEAS.
[00:14:03] I THINK GOING FORWARD, IT WILL BE IMPORTANT TO FOLLOW UP ON
[00:14:05] THOSE STUDIES AND HAVE THE
[00:14:09] CONGRESS EXERCISING OVERSIGHT AND ON HOW THEY'RE DOING AND HOW
[00:14:13] THE VARIOUS REPORTING RESPONSE
[00:14:17] POSSIBILITIES ON THE REGULATORS,
[00:14:19] WHICH ARE ARE ARE PROVIDED IN
[00:14:23] THE ACT, ARE FOLLOWED. ARE FOLLOWED UP ON.
[00:14:28] ONE THING ABOUT HOUSING IN
[00:14:30] GENERAL IS, AS I SAID BEFORE, WE
[00:14:33] ARE STILL IN THE AFTERMATH OF THE GREAT.
[00:14:36] SECOND HOUSE PRICE BUBBLE OF THE UNITED STATES IN THIS CENTURY.
[00:14:40] AND WE'RE GOING TO HAVE TO LIVE THROUGH THAT.
[00:14:42] I THINK THERE'S GOING TO BE A DOWNWARD.
[00:14:46] GENTLEMAN'S TIME. SURE THAT I'M OUT OF TIME. I YIELD BACK.
[00:14:48] YOU SAID ON ON HOUSE PRICES THAT WE ALL CONFRONT.
[00:14:51] THANK YOU. THE GENTLEMAN YIELD BACK. THE CHAIR RECOGNIZES THE
[00:14:54] GENTLEMAN FROM CALIFORNIA, MR. LUCADO, FOR FIVE MINUTES.
[00:14:57] THANK YOU, CHAIR. MR. POLLACK, I APPRECIATE YOUR
[00:15:01] FOCUS ON THE BIPARTISAN EFFORTS TO ADDRESS THE HOUSING CRISIS IN OUR COUNTRY.
[00:15:05] AND THOSE EFFORTS WERE FAR FROM PERFECT. OBVIOUSLY, THERE'S MUCH MORE
[00:15:08] WORK TO BE DONE AND. BUT IN THIS VERY DIVISIVE
[00:15:11] POLITICAL MOMENT, IT'S NOTABLE
[00:15:13] THE FUNDAMENTAL ASSUMPTION, I
[00:15:16] THINK, OF THAT EFFORT SINCE I WAS PART OF IT AND HAD FOUR BILLS IN THE PACKAGE.
[00:15:20] IT WAS THAT BUILDING MORE HOUSING IS A GOOD THING TO ADDRESS. THEREFORE.
[00:15:24] ABILITY CHALLENGES THAT MILLIONS OF AMERICANS FACE. IS THAT IS THAT FAIR?
[00:15:28] THERE'S A DEFINITE EMPHASIS ON SUPPLY, YES.
[00:15:30] AS WE SAID BEFORE, AND NOT JUST PUMPING UP DEMAND.
[00:15:34] YES. CONGRESSMAN, AND YOUR THINK TANK, THE MISES INSTITUTE,
[00:15:36] DESCRIBES THE AUSTRIAN SCHOOL OF ECONOMICS, WHICH EMPHASIZES
[00:15:40] INDIVIDUAL FREEDOM.
[00:15:44] SOMEWHAT, SOME MIGHT REGARD AS CONSERVATIVE VALUES. IS THAT FAIR?
[00:15:48] THE AMAZING INSTITUTE IS NAMED AFTER LUDWIG FUND MEASLES, WHO'S
[00:15:51] A FOUNDER OF THE AUSTRIAN SCHOOL AND EMPHASIZES HUMAN FREEDOM.
[00:15:57] VOLUNTARY CHOICE TO THE ADVANTAGE OF MARKETS. YES.
[00:16:00] MY APOLOGIES TO HIM FOR MISPRONOUNCING HIS LAST NAME.
[00:16:03] I DIDN'T MEAN TO BE CORRECTING YOU THE GOOD NEWS IS THERE ARE
[00:16:05] ISSUES ACROSS THE IDEOLOGICAL SPECTRUM THAT MANY ECONOMISTS
[00:16:08] AGREE UPON. FOR EXAMPLE, HIGHER COSTS FOR CONSTRUCTION MATERIALS COULD
[00:16:13] HURT HOUSING AFFORDABILITY. IS THAT FAIR?
[00:16:15] IT SOUNDS FAIR TO ME, YES.
[00:16:18] HOUSING, HIGHER FUEL PRICES COULD ALSO UNDERMINE HOUSING.
[00:16:22] AFFORDABLE. BECAUSE OF THAT, COSTS ARE BORN THROUGH CONSTRUCTION. THAT FOR A CONGRESSMAN.
[00:16:26] I'M NOT SURE WHERE YOU'RE GOING WITH HIGHER PRICES IN GENERAL
[00:16:29] AND INFLATION HURT THE FUNCTIONING OF THE ECONOMY,
[00:16:33] WHICH IS WHY WE NEED TO WORK FOR SOUND MONEY. MAYBE WE CAN AGREE ON THAT ONE.
[00:16:37] AND HIGH INTEREST RATES ALSO
[00:16:39] UNDERMINE HOUSING, AFFORDABLE INTEREST RATES ARE A MARKET
[00:16:43] EFFECT. INTEREST RATES GO UP AND DOWN
[00:16:45] WITH SUPPLY AND DEMAND, THERE
[00:16:48] ARE PRICE AND PRICES NEED TO BE ADJUSTABLE.
[00:16:50] AND SO HIGHER INTEREST RATES WILL UNDERMINE HOUSING
[00:16:54] AFFORDABILITY, HIGHER INTEREST
[00:16:56] RATES MAKE MORTGAGES MORE. EXPENSIVE, YES, BUT LOWER
[00:17:01] INTEREST RATES CAN ALSO CAUSE HOUSING TO BE MORE EXPENSIVE
[00:17:06] THROUGH THE PROCESS. YES. THROUGH. WHEN THERE WHEN THEY'RE
[00:17:08] ABNORMALLY SUPPRESSED, AS THEY WERE RIGHT FOR A DECADE.
[00:17:12] THE RESULT IRONIC. TOTALLY.
[00:17:15] YOU'RE TRYING TO MAKE THINGS CHEAPER. YOU END UP MAKING THEM MORE EXPENSIVE.
[00:17:18] AND HOUSES IN PARTICULAR. YES.
[00:17:21] AND SHORTAGES OF CONSTRUCTION. LABOR ALSO UNDERMINES HOUSING AFFORDABILITY.
[00:17:24] THAT FOR SURE.
[00:17:26] AND SO WE HAVE AN EFFORT BY THIS
[00:17:30] CONGRESS IN A BIPARTISAN WAY TO ADDRESS HOUSING AFFORDABILITY.
[00:17:33] AND WE HAVE AN ADMINISTRATION
[00:17:35] THAT HAS DRIVEN UP TARIFFS ON
[00:17:37] MATERIALS LIKE STEEL AND CANADIAN WOULD.
[00:17:41] HAS DRIVEN UP COSTS FOR FUEL
[00:17:43] WITH A WAR WITHOUT ANY CLEARLY
[00:17:45] DEFINED STRATEGIC, ACHIEVABLE OBJECTIVE.
[00:17:48] AND THOSE COSTS UNDOUBTEDLY HAVE
[00:17:51] BORNE SOME PAIN THROUGH HIGHER CONSTRUCTION COSTS.
[00:17:54] IS THAT FAIR, CONGRESSMAN?
[00:17:58] AS IS THE AUSTRIAN SCHOOL, AND
[00:18:03] LUDWIG VON MISES WOULD SAY THE CLOSER WE CAN GET TO COMPETITIVE
[00:18:07] FREE MARKETS, THE BETTER.
[00:18:09] RESOURCE ALLOCATION AND THE BETTER THE PEOPLE ARE BETTER
[00:18:13] OFF. THE PEOPLE WILL BE. AND TARIFFS AND WARS PROBABLY ARE NOT AS YET.
[00:18:17] THAT EFFORT TARIFFS ARE NOT THAT. YES.
[00:18:21] AND RUNNING LARGE FEDERAL BUDGET
[00:18:23] DEFICITS COULD CROWD OUT PRIVATE SECTOR BORROWING. THAT COULD ALSO DRIVE UP
[00:18:27] INTEREST RATES.
[00:18:31] BARELY. UNCONTROVERTED? YEAH. AS I SAID BEFORE, THE INTEREST
[00:18:34] RATES ARE A PRICE THEY REFLECT SUPPLY AND DEMAND.
[00:18:37] AND THIS CONGRESS, WITH THIS ADMINISTRATION, JUST ADDED MORE
[00:18:41] THAN $4 TRILLION TO OUR DEBT.
[00:18:43] BY ACCELERATING THAT, THE THE DEBT IS A.
[00:18:46] THE DEBT IS RISING, BUT THE DEBT
[00:18:48] IS A HERITAGE OF VERY MANY
[00:18:52] ADMINISTRATIONS, A GREEDY, MANY AND VERY MANY CONGRESS AND
[00:18:55] CERTAINLY THIS SITUATION THAT HAS BEEN A BIPARTISAN EFFORT,
[00:18:58] CONGRESSMAN, BUT THAT DEBT HAS DOUBLED SINCE DONALD TRUMP TOOK
[00:19:01] OFFICE IN 20 1716. EXCUSE 17. THANK YOU.
[00:19:06] AND AND THE SHORTAGES IN CONSTRUCTION, LABOR, I THINK
[00:19:09] CERTAINLY YOU'VE SEEN PLENTY OF NEWS REPORTING FROM STATES LIKE
[00:19:13] TEXAS WHERE THE CONSTRUCTION
[00:19:15] INDUSTRY COMPLAINS THAT THEY ARE
[00:19:19] SUFFERING SUBSTANTIALLY AROUND A
[00:19:20] LACK OF LABOR BECAUSE OF CHAOTIC
[00:19:25] IMMIGRATION ENFORCEMENT.
[00:19:28] WELL, THE CHAOTIC IMMIGRATION LAWS WERE DEFINITELY A
[00:19:32] BIPARTISAN. AND I HAVE TO SAY, PRINCIPALLY DEMOCRAT. I UNDERSTAND.
[00:19:35] BUT I SAID ENFORCEMENT SPECIFICALLY, WE COULD ALL AGREE THERE ARE PLENTY OF LAWS TO FIX,
[00:19:39] BUT WE'VE SEEN UNIQUELY CHAOTIC ICE ENFORCEMENT.
[00:19:43] IS THAT FAIR TO SAY? WE HAVE CERTAINLY SEEN
[00:19:46] ENFORCEMENT OF THE LAW, FOLLOWED BY AN ENFORCEMENT OF THE LAW.
[00:19:49] WELL, I WOULD SAY THAT WE HAVE A
[00:19:51] PRETTY STRONG RECORD FOR THIS ADMINISTRATION IN. UNDERMINING HOUSING
[00:19:57] AFFORDABILITY ON VIRTUALLY EVERY SCORE. THANK YOU.
[00:20:00] YIELD GENTLEMAN YIELDS BACK.
[00:20:02] I RECOGNIZE MYSELF NOW FOR FIVE MINUTES.
[00:20:05] THANK YOU ALL FOR BEING HERE TODAY.
[00:20:09] AND I WANT TO JUMP IN TO SOMETHING THAT I THINK IS
[00:20:12] IMPORTANT FOR EXPANDING THE INVESTOR BASE, AND THAT'S THE
[00:20:16] INVEST ACT. THIS COMMITTEE HAS BEEN CLEAR THAT THE CURRENT ACCREDITED
[00:20:19] INVESTOR DEFINITION. GATEKEEPERS, PRIVATE MARKETS BY
[00:20:23] WEALTH AND NOT BY KNOWLEDGE. AND I'D LIKE TO ASK MS. MARTIN AND ALSO, MR. HAMILTON,
[00:20:30] YOU'RE. YOUR OPINION AS WELL. BUT BY LETTING INVESTORS QUALIFY
[00:20:33] ON A FINANCIAL EXPERTISE INSTEAD OF NET WORTH, HOW DOES THE
[00:20:37] INVEST ACT GIVE QUALIFIED
[00:20:39] AMERICANS A REAL SHOT AT HIGH
[00:20:41] GROWTH PRIVATE COMPANIES AND LET
[00:20:44] THEIR RETIREMENT SAVINGS GROW ALONGSIDE INSTITUTIONAL INVESTORS?
[00:20:48] MS. MARTIN, START WITH YOU. UNFORTUNATELY, I DON'T HAVE THE
[00:20:50] DETAILS OF THE ACT BECAUSE IT'S NOT JUST ABOUT THE IDEA.
[00:20:54] IT'S ABOUT THE MECHANISM IN WHICH YOU ACHIEVE THAT IDEA.
[00:20:58] BUT FROM OUR PERSPECTIVE,
[00:21:00] EXPANDING ACCESS TO COMPANIES,
[00:21:02] PUBLIC COMPANIES, PRIVATE COMPANIES INVEST ABILITY AS LONG
[00:21:06] AS IT'S COUPLED WITH TRANSPARENCY.
[00:21:09] C IS A GOOD THING BECAUSE. OUR NORTH STAR AT THE NEW YORK
[00:21:12] STOCK EXCHANGE IS TO ENABLE
[00:21:15] PEOPLE TO INVEST, TO INVEST IN
[00:21:19] COMPANIES AT VARIOUS STAGES.
[00:21:21] WE THINK THE RIGHT MECHANISM FOR
[00:21:24] THAT IS OUR PUBLIC MARKETS AND
[00:21:28] ENSURE THAT THE COMPANIES THE MOST INNOVATE OF COMPANIES HAVE
[00:21:31] A CLEAR PATH TOWARDS GOING
[00:21:33] PUBLIC IN THE MOST TRANSPARENT
[00:21:35] FASHION POSSIBLE. SO ARE YOU YOU BELIEVE, THOUGH
[00:21:39] YOU KNOW, WITH THE RIGHT PARAMETERS?
[00:21:41] GUIDELINES GIVING MORE PEOPLE
[00:21:44] ABILITY TO PARTICIPATE IS GOOD?
[00:21:48] ABSOLUTELY. FROM OUR PERSPECTIVE, IT'S ALSO ABOUT INVESTOR PROTECTION.
[00:21:51] ONE OF OUR HALLMARK ARCS IS
[00:21:53] INVESTOR PROTECTION, ENSURING
[00:21:56] THAT IF I PLACE MY RETIREMENT
[00:22:00] SAVINGS INTO THE MARKET, I WANT
[00:22:03] TO ENSURE THAT IT IS PROTECTED
[00:22:05] FROM BAD ACTORS. SURE. ABSOLUTELY.
[00:22:08] MR. HAMILTON.
[00:22:11] I'M ALSO GOING TO COMMENT THAT I DON'T HAVE ALL THE DETAILS, BUT
[00:22:15] THE THE BROADER PRINCIPLE OF
[00:22:17] EXPANDING ACCESS IN AND OF
[00:22:20] ITSELF IS A GOOD IDEA AS LONG AS
[00:22:22] WE'RE ALSO ATTUNED TO SOME OF THE LESSONS THAT THAT ACCESS CAN
[00:22:26] BE EXPLORED VOIDED AS WELL FOR
[00:22:30] THOSE THAT ARE MORE VULNERABLE. DO YOU FEEL THAT THERE ARE FOLKS
[00:22:33] THAT ARE BOXED OUT RIGHT NOW
[00:22:35] UNDER THE CURRENT GUIDELINES AND
[00:22:38] RULES THAT WE HAVE? YES. YES.
[00:22:42] IN A SIMPLE ANSWER. BUT AGAIN, I THINK WE HAVE SOME
[00:22:45] CLEAR LESSONS OF THE PAST WHEN WE'VE EXPANDED ACCESS WITHOUT
[00:22:49] THE RIGHT GUARDRAILS, AND THEN
[00:22:51] IT TURNED INTO EXPLOITATION. THE SUBPRIME MORTGAGE CRISIS
[00:22:55] WOULD BE ONE EXAMPLE. THANK YOU. I WANT TO JUMP BACK TO THE ROAD
[00:22:59] TO HOUSING. THIS COMMITTEE RECENTLY
[00:23:02] DELIVERED A MAJOR, MAJOR RELIEF
[00:23:05] FOR AMERICAN HOMEBUYERS BY ENACTING THE 21ST CENTURY ROAD
[00:23:08] TO HOUSING ACT. THIS LAW ADDRESSES SOMETHING I
[00:23:10] HEAR ABOUT FREQUENTLY FROM MY CONSTITUENTS IN NORTHEAST INDIANA.
[00:23:14] GOVERNMENT RED TAPE COMPLEX REGULATIONS.
[00:23:19] THAT'S, YOU KNOW, COME FROM THE ENVIRONMENTAL REVIEWS AND THE PERMITTING PROCESS.
[00:23:22] AND THAT'S WHY I INTRODUCED THE STREAMLINE RURAL HOUSING ACT,
[00:23:25] WHICH BECAME LAW PART OF THIS PACKAGE.
[00:23:29] MR. POLLACK, I'D LIKE TO ASK YOU, HOW WILL ROADS PERMITTING
[00:23:31] ENVIRONMENTAL REVIEW REFORMS
[00:23:33] CREATE A MEANINGFUL DIFFERENCE FOR THOSE LOOKING TO BUILD OR
[00:23:37] BUY A HOME? CONGRESSMAN, I'M SURE IT WILL
[00:23:41] HELP IN GENERAL, A LOT OF
[00:23:44] REGULATION STARTS OFF WITH ALL GOOD INTENTIONS OVER TIME AND
[00:23:48] COMPLEXITY. SIZE ITSELF GROWS MORE EXPENSIVE
[00:23:52] AND I THINK IT'S ESSENTIAL FOR THE CONGRESS FROM TIME TO TIME
[00:23:54] TO REVIEW THAT AND TAKE STEPS TO
[00:23:56] BRING IT INTO BALANCE. AS IN MY OPINION, THIS ACT DID
[00:24:00] DO IT. MR. HAMILTON, THROW THAT TO YOU AS WELL?
[00:24:03] I DON'T KNOW IF YOU'RE FAMILIAR WITH SOME OF THE HOUSING REFORMS
[00:24:07] THAT WE MADE. BUT, YOU KNOW, AGAIN, I MEAN.
[00:24:09] TRYING TO RELAX THE ABILITY FOR PEOPLE TO GET INTO A HOME IS
[00:24:13] IMPORTANT, TOO. BUT WHAT ARE YOUR THOUGHTS? I APPLAUD THE CONGRESS ON THE
[00:24:16] VALUES OF EXPANDING HOUSING. I WOULD ENCOURAGE THE CONGRESS
[00:24:20] TO DIRECT SOME MORE RESOURCES DIRECTLY, BECAUSE THE NUMBER ONE
[00:24:23] INGREDIENT IS CAPITAL ITSELF. IF WE DO THAT, THOUGH, DON'T WE
[00:24:27] PUSH PRICES HIGHER? IT DEPENDS ON TO WHOM YOU OFFER
[00:24:31] IT TO. SO THERE ARE WAYS IN WHICH YOU CAN MAKE IT IN TARGETED SPECIFIC
[00:24:35] WAYS TO PROVIDE ACCESS TO THOSE WHO OTHERWISE WOULDN'T HAVE IT.
[00:24:38] YEAH, I THINK YOU KNOW, TRYING TO DRIVE THE COST DOWN IS IMPORTANT BECAUSE WE'VE SEEN
[00:24:43] THIS INFLATION OVER THE PAST FIVE YEARS BECAUSE ALL THIS MONEY COMING FROM WASHINGTON
[00:24:47] KEPT COMING INTO THE SYSTEM AND JUST DROVE PRICES HIGHER.
[00:24:51] YOU KNOW, AND I THINK THAT WHILE THE ECONOMY WE HAVE CERTAIN
[00:24:56] CHALLENGES, I ALSO SEE THE FUNDAMENTALS BEING VERY GOOD.
[00:24:58] AND I THINK IF WE CAN, IN.
[00:25:00] ENABLE AMERICANS TO BUILD THEIR
[00:25:03] OWN AT A LOWER COST, THAT'S GOING TO BENEFIT ALL OF US.
[00:25:07] MY TIME HAS EXPIRED. SO AT THIS TIME, THANK YOU TO ALL OF YOU.
[00:25:10] THE CHAIR RECOGNIZES THE CHAIR OF OUR SUBCOMMITTEE ON OVERSIGHT
[00:25:13] AND INVESTIGATE MR. MUELLER OF
[00:25:16] PENNSYLVANIA FOR FIVE MINUTES. THANK YOU, CHAIRMAN. THANK YOU ALL.
[00:25:20] GREAT, GREAT PANEL. REALLY APPRECIATE IT. UNDER CHAIRMAN HILL'S
[00:25:24] LEADERSHIP, THE FINANCIAL SERVICES COMMITTEE, OUR COMMITTEE HAS ADVANCED MANY
[00:25:26] PIECES OF LEGISLATION, INCLUDING THE MAIN STREET ACCESS TO
[00:25:29] CAPITAL ACT, THE GENIUS ACT, THE 21ST CENTURY ROAD TO HOUSING
[00:25:33] ACT, AND THE INVEST ACT, WHICH SUPPORT LONG TERM ECONOMIC GROWTH, FINANCIAL STABILITY AND
[00:25:37] PROVIDE. A HIGHER LEVEL ANYWAY, OF CERTAINTY FOR INVESTORS AND
[00:25:41] CONSUMERS. TOGETHER, THESE EFFORTS REFLECT THE COMMITTEE'S COMMITMENT TO
[00:25:45] MOVING FINANCIAL POLICY AWAY FROM A BIASED, GOVERNMENT DRIVEN
[00:25:48] MARKET DISTORTION TOWARDS SUPPLY SIDE GROWTH.
[00:25:51] CAPITAL FORMATION, EXPANDED ACCESS TO CAPITAL AND, AS WE
[00:25:55] SAY, MAKE. DOING OUR BEST TO MAKE COMMUNITY BANKS GREAT AGAIN.
[00:25:59] SO, MR. MANAGER, MY SAFE
[00:26:02] GUIDANCE ACT, WHICH WAS INCLUDED IN THE MAIN STREET CAPITAL ACCESS ACT, ENSURES
[00:26:06] TRANSPARENCY, LIMITS ABUSE OF REGULATORY GUIDANCE BY REQUIRING
[00:26:10] REGULATORS TO INCLUDE A DISCLAIMER ON THE FIRST PAGE OF ANY GUIDANCE DOCUMENT THAT MAKES
[00:26:14] CLEAR THIS IS. GUIDANCE AND IS NOT LAW.
[00:26:18] HOW WILL THIS AND OTHER PROVISIONS IN THE MAINSTREAM CAPITAL ACCESS ACT TRANSLATE
[00:26:21] INTO RELIEF FOR LENDERS AND ALLOW THEM TO FOCUS ON
[00:26:25] RESPONSIBLY DEPLOYING CAPITAL? CONGRESSMAN, THANK YOU SO MUCH
[00:26:28] FOR YOUR LEADERSHIP IN THAT IN THAT AREA.
[00:26:30] AND AND ON THE BILL'S, WE WOULD CERTAINLY WELCOME SEEING THE
[00:26:34] MAIN STREET CAPITAL ACCESS ACT
[00:26:36] BECOME LAW AND PARTICULARLY FOR
[00:26:38] THAT REASON, IT IS, I THINK, A HUGE CHALLENGE OF RECENT YEARS
[00:26:42] THAT REGULATORS WERE ASSERTING
[00:26:46] GUIDANCE DOCUMENTS WERE. YOU KNOW, THE FOUR HAD THE FORCE
[00:26:49] OF LAW WHEN THOSE ARE NONBINDING DOCUMENTS BY DEFINITION. SO WE CANNOT HAVE A SITUATION
[00:26:53] WHERE THERE WAS EXPECTATION LIENS ARE NOT GOING THROUGH THE
[00:26:57] NOTICE AND COMMENT RULEMAKING PROCESS AND ARE NOT BEING
[00:27:00] ESTABLISHED REQUIREMENTS AS OPPOSED TO GUIDANCE.
[00:27:04] THANK YOU AS WELL. I'M GOING TO ASK YOU, TRAVIS
[00:27:07] HILL AT THE FDIC.
[00:27:09] THE FDIC BEGAN EFFORTS TO INDEX CERTAIN REGULATORY THRESHOLDS.
[00:27:13] SO THAT THEY DO NOT BECOME MORE RESTRICTIVE, I.E., YOU KNOW,
[00:27:16] BASED UPON INFLATION, SIMPLY BECAUSE THE ECONOMY AND BANKING
[00:27:20] SYSTEM GROW OVER TIME. DO YOU BELIEVE THE REGULATORS ARE MOVING IN THE RIGHT
[00:27:23] DIRECTION WITH SUCH PLANS? ABSOLUTELY. AND CHAIRMAN HILL, TRAVIS HILL
[00:27:28] HAS CERTAINLY DONE A LOT OF WORK IN THAT EFFORT. IN OTHER AREAS AS WELL.
[00:27:30] AND THE OTHER REGULATORS HAVE THE INDEXING.
[00:27:34] WE HAVE REGULATORY THRESHOLDS THAT WERE SET NOMINALLY IN THE
[00:27:38] 1970 AND REALLY DO NOT HAVE ANY
[00:27:40] BEARING ON A RISK BASED APPROACH TO REGULATION TODAY. SO.
[00:27:44] APPRECIATE THE FOCUS OF CONGRESS ON INDEXING. VERY GOOD. THANKS.
[00:27:48] IT'S MARTIN. ONE CONCERNING TREND WE SAW UNDER THE BIDEN ADMINISTRATION
[00:27:52] WAS DECLINE IN U.S. IPOS. AS YOU MENTIONED, THE TREND IS
[00:27:55] REVERSING. CLEARLY 65 IPOS RAISING PRACTICALLY $114 BILLION IN THE
[00:28:00] FIRST HALF OF 2026, NEARLY DOUBLE THE NUMBER AND MORE THAN
[00:28:02] SEVEN TIMES A CAPITAL RAISE DURING THE SAME PERIOD LAST YEAR.
[00:28:06] IN YOUR OPINION, WHAT HAS BEEN THE BIGGEST CONTRIBUTORS TO THIS
[00:28:09] TREND AND HOW CAN THE INVEST ACT ADDRESS THOSE ISSUES?
[00:28:12] WELL, THANKS SO MUCH FOR YOUR LEADERSHIP.
[00:28:15] AND THE QUESTION, CONGRESSMAN.
[00:28:18] THE BIGGEST AREA WHERE WE'VE
[00:28:21] SEEN, I WOULD SAY THE BIGGEST
[00:28:23] CATALYST THAT WE'VE SEEN FOR THE
[00:28:25] IPO MARKETS RETURNING HAS REALLY BEEN THE CONFIDENCE, THE
[00:28:30] CONFIDENCE THAT THESE COMPANIES CAN RAISE THE CAPITAL THAT THEY
[00:28:33] NEED TO FUND THE OPERATIONS. AND AND TO YOUR POINT, THE
[00:28:37] RECORDS THAT WE'RE SEEING REALLY POINT TO THE FACT POINT TO THE
[00:28:41] SUCCESS, DEPTH, BREADTH,
[00:28:43] LIQUIDITY IN THOSE MARKETS.
[00:28:45] AND IT'S A TREND WE CONTINUE TO
[00:28:49] BELIEVE WILL WILL BE SEEN FOR
[00:28:51] THE MEDIUM TERM HERE WHERE
[00:28:55] INCREDIBLY OPTIMISTIC ABOUT THIS, NOT JUST BECAUSE IT ALLOWS
[00:28:59] THE MOST INNOVATIVE COMPANIES TO RAISE THE CAPITAL THAT THEY
[00:29:03] NEED, BUT IT ALSO ALLOWS THE MAIN STREET INVESTOR TO BROADEN
[00:29:06] OUT THE INVESTMENT IN THESE
[00:29:08] INCREDIBLY INNOVATE OF COMPANIES, COMPANIES WHO ARE
[00:29:12] REALLY BUILDING THE FUTURE OF AMERICA.
[00:29:15] SO THESE TRENDS WILL CONTINUE, WE BELIEVE.
[00:29:18] SO WE'RE VERY OPTIMISTIC ABOUT
[00:29:20] THE SECOND HALF OF THIS YEAR AND
[00:29:22] ACTUALLY NOW MOVING INTO 2027.
[00:29:24] AND I THINK IT REFLECTS THE HEALTH OF THE UNDERLYING MARKETS
[00:29:28] IN PARTICULAR. GOOD. I AGREE.
[00:29:32] MR. TARBERT THE GENIUS ACT.
[00:29:36] HOW HAS THE GENIUS ACT BEEN A GAME CHANGER FOR STABLECOIN ISSUERS AND CAN PROVIDE SOME
[00:29:40] INSIGHT ON HOW IT WILL BE
[00:29:43] IMPACTING EVERYDAY CONSUMERS USING STABLECOINS AND THEN MAYBE
[00:29:46] IN LIMITED TIME COMMENTS ON THE IMPORTANCE OF PASSING THE CLARITY ACT.
[00:29:50] YEAH, SO THANK YOU SO MUCH, CONGRESSMAN.
[00:29:52] IT'S BEEN ABSOLUTE CRITICAL BECAUSE NOW YOU'RE STARTING TO
[00:29:56] SEE THE GENIUS ACT ENCOURAGE FOLKS TO DO THINGS THE RIGHT WAY
[00:29:59] THROUGH TRANSPARENT AND SEE THROUGH BACKING ONE FOR ONE.
[00:30:02] ALL OF THAT PROTECTS CONSUMERS, BUT IT ALSO MAKES OUR FINANCIAL
[00:30:06] SYSTEM STRONGER AND THEN WE'RE
[00:30:08] STARTING TO SEE ADOPTION OF STABLECOINS IN ALL SORTS OF
[00:30:11] WAYS, INCLUDING AS CREDIT CARD SETTLEMENT AND THEREFORE
[00:30:14] REDUCING THE FEES THAT CONSUMERS AND SMALL BUSINESSES PAY.
[00:30:18] BUT THAT SAID, IT'S WE GOT TO
[00:30:20] FINISH THE JOB CLARITY ACT IS ALL THE MARKETS ABOVE THAT
[00:30:23] DOLLAR LAYER AND IT'S CRITICAL THAT WE GET THAT. EXCELLENT. MY TIME HAS EXPIRED.
[00:30:27] I YIELD BACK. MR. CHAIRMAN. THE GENTLEMAN YIELDS BACK. THE CHAIR RECOGNIZES THE
[00:30:31] GENTLEMAN FROM NEW JERSEY. MR. GOTTHEIMER. THANK YOU. MINUTES THANK YOU, MR. CHAIRMAN.
[00:30:34] AND THANK YOU, RANKING MEMBER WATERS.
[00:30:38] FINDING WAYS TO MODERNIZE AND EXPAND CERTAIN ASPECTS OF FEDERAL DEPOSIT INSURANCE
[00:30:42] REMAINS AN IMPORTANT PRIORITY FOR ME. THIS WILL HELP ENSURE THAT SMALL
[00:30:44] BUSINESSES REMAIN STABLE AND MAIN STREET IS ABLE TO ECONOMICALLY THRIVE.
[00:30:48] IT REMAINS IMPORTANT THAT WE FIND AN EQUITABLE SOLUTION DEPOSIT INSURANCE.
[00:30:52] MS. CRENSHAW THE DEPOSIT INSURANCE FUND IS SUPPOSED TO MAINTAIN A
[00:30:56] RESERVE RATIO OF AT LEAST 1.35 1.35% OF INSURED DEPOSITS.
[00:30:59] AND IT'S BEEN KNOCKED BELOW TARGETS BEFORE.
[00:31:02] FROM YOUR MEMBERS PERSPECTIVE, IS THE FUND ON SOUND FOOTING TODAY?
[00:31:06] AND ARE THE ASSESSMENTS BEING CALIBRATED IN A WAY THAT KEEPS IT HEALTHY WITHOUT PENALIZING
[00:31:10] WELL-RUN COMMUNITY BANKS? NOW, THANK YOU, CONGRESSMAN, FOR THE QUESTION.
[00:31:13] DEPOSIT INSURANCE OBVIOUSLY IS
[00:31:16] FUNDAMENTAL TO OUR BANKING SYSTEM, AND IT HAS BEEN AN
[00:31:20] IMPORTANT PROTECTION THAT CONSUMERS HAVE COME TO EXPECT
[00:31:23] AND THAT BANKS OBVIOUSLY PAY FOR THAT THROUGH THE ASSESSMENT
[00:31:27] PROCESS. AS YOU NOTICED, I KNOW THAT
[00:31:29] CHAIRMAN HILL HAS BEEN REVIEWING
[00:31:31] THIS, AND I DO BELIEVE THERE WAS
[00:31:33] A RECENT PROPOSAL ON THE ASSESSMENT PROCESS. BUT I CAN GET BACK TO YOU ON THE
[00:31:37] EXACT SPECIFICS OF THAT. AT THE MOMENT, I'M NOT RECALLING
[00:31:41] THE DETAILS OF IT, BUT I KNOW IT IS SOMETHING THAT THAT MATTERS.
[00:31:44] AND WE'RE LOOKING AT IT. AND THEN ALSO, OF COURSE,
[00:31:46] ENSURING THAT THE ASSESSMENT IS
[00:31:50] APPROPRIATELY, APPROPRIATELY CALIBRATED TO THE RISK AND SIZE
[00:31:53] OF THE INSTITUTION. THANK YOU VERY MUCH.
[00:31:57] FAMILIES IN THE GREAT STATE OF JERSEY WHERE I'M FROM ARE FEELING SQUEEZED FROM A LOT OF
[00:32:01] DIRECTIONS AT ONCE. AND A BIG PART OF IT IS THE
[00:32:03] ECONOMIC UNCERTAINTY RIGHT NOW. THE NATIONAL DEBT JUST HIT $40
[00:32:07] TRILLION AND IT $3 BILLION A DAY IN INTEREST. THE BOND MARKET IS DONE BEING
[00:32:11] PATIENT. AND EVERY AMERICAN FAMILY PAYS FOR IT. AND HIGHER MORTGAGE AND CREDIT
[00:32:13] CARD RATES AND HIGHER INTEREST
[00:32:15] RATES OVERALL CAR LOANS, EVERYTHING.
[00:32:18] WORKING FAMILIES BORROW FOR. ON TOP OF THAT, ENERGY PRICES SWING ON EVERY GEOPOLITICAL
[00:32:22] HEADLINE. MS. MARTIN FROM WHERE YOU SIT, WATCHING THE BOND MARKET EVERY
[00:32:26] DAY, HOW MUCH OF THE BORROWING COST PRESSURE AMERICANS ARE
[00:32:28] FEELING TRACES BACK TO OUR FISCAL TRAJECTORY?
[00:32:30] AND WHAT DOES CONTINUED DEFICIT SPENDING COMBINED WITH VOLATILE
[00:32:34] ENERGY PRICES, MEAN FOR MARKET STABILITY AND FOR THE COST OF EVERYDAY LIFE? OVER THE NEXT FEW YEARS?
[00:32:40] FROM OUR PERSPECTIVE, OUR JOB IS TO ENSURE THAT THE MARKETS
[00:32:43] REMAIN OPEN AND AS EFFICIENT AS
[00:32:45] POSSIBLE TO ALLOW INDIVIDUAL OIL
[00:32:50] INVESTORS, INSTITUTIONAL INVESTORS, TO MANAGE WHATEVER
[00:32:52] RISK, WHATEVER MACROECONOMIC RISK THEY HAVE ON THEIR BOOKS AS
[00:32:58] EFFICIENTLY AS POSSIBLE. SO TRADE CERTAINTY, EFFICIENT
[00:33:01] RISK MANAGEMENT ARE INCREDIBLY IMPORTANT.
[00:33:03] IT'S ACTUALLY WHY WE'VE INVESTED
[00:33:07] SO MUCH IN OUR INFRASTRUCTURE
[00:33:09] BECAUSE VOLATILITY HITS AT A
[00:33:12] MOMENT'S NOTICE AND OUR JOB IS
[00:33:14] TO ENSURE THAT MARKETS REMAIN
[00:33:16] OPEN AND TRANSPARENT BECAUSE WE
[00:33:19] BELIEVE FOR THE MEDIUM TO LONG
[00:33:21] TERM, THE VALUE OF YOUR INVESTMENT WILL CONTINUE TO
[00:33:25] ACCELERATE. THANK YOU.
[00:33:28] IT IS CLEAR AND SWITCHING TOPICS
[00:33:30] HERE THAT AI IS ADVANCING AT A RAPID PACE.
[00:33:33] IF WE GET IT RIGHT, IT CAN BE A NET BENEFIT FOR ALL AMERICANS
[00:33:36] AND HELP ENSURE THE U.S. STAYS AHEAD OF CHINA.
[00:33:39] BUT I BELIEVE WE NEED PROPER GUARDRAILS TO PROTECT WORKERS
[00:33:42] AND OUR ECONOMY. SO THAT SERVES AS A TOOL TO MAKE PEOPLE MORE EFFICIENT AND SAFER.
[00:33:45] AND, OF COURSE, LOOKS OUT FOR OUR NATIONAL SECURITY.
[00:33:48] DR. HAMILTON, WE'RE ALREADY SEEING ABUSE ON THE FACTORY
[00:33:52] FLOOR TO CATCH HAZARDS BEFORE THEY CAUSE INJURIES. TAKE THE MOST DANGEROUS AND
[00:33:55] REPETITIVE TASKS OFF WORKERS PLATES AND TRY TO BOOST
[00:34:00] PRODUCTIVITY. WHERE'S THE AFL-CIO SEEING AI DEPLOYED IN WAYS THAT BENEFIT
[00:34:04] WORKERS? AND HOW DO WE ENSURE THAT WORKERS ACTUALLY DO BENEFIT
[00:34:06] ACROSS INDUSTRIES FROM THIS
[00:34:08] TECHNOLOGY AND DON'T JUST FIND
[00:34:11] THEMSELVES OUT OF WORK OR HAVE THEIR PROTECTIONS EXPOSED?
[00:34:15] AND I WANT TO BE CAREFUL THAT I'M NOT GIVEN THE OFFICIAL AFL-CIO STANCE.
[00:34:19] I'M OFFERING FROM MY
[00:34:21] PERSPECTIVE, AND I THINK AFL CIO, ALONG WITH WORKERS IN
[00:34:25] GENERAL, ARE VERY ACTIVE IN TRYING TO DO JUST THAT, TO
[00:34:29] UTILIZE A.I. AS THE TOOL TO FACILITATE BETTER WORKPLACE,
[00:34:32] MORE PRODUCTIVE WORKPLACE AND NOT EXPLOITIVE WORKPLACES.
[00:34:36] ARE YOU FINDING THAT IT'S OTHER PLACES WHERE YOUR THINKING IS
[00:34:40] HELPFUL AND ARE MORE THE MORE RISKS AT THIS POINT THAN BENEFITS? HOW ARE YOU ALL SEEING IT?
[00:34:44] WELL, I THINK RIGHT NOW WE DON'T HAVE THE RIGHT GOVERNING
[00:34:48] STRUCTURE TO REDEFINE A.I. IN
[00:34:50] WAYS TO FACILITATE PEOPLE RIGHT NOW.
[00:34:52] WE HAVE LIKE A BULL APPROACH OF
[00:34:56] FACILITATING A.I. IN POWER WITHOUT THE PROPER GUARDRAILS,
[00:34:59] BUT WITH GOOD REGULATIONS, WITH
[00:35:01] A REDEFINITION. AND I'M WITH YOU IN THE SENSE
[00:35:05] THAT A.I. IS NOT DOOM AND GLOOM.
[00:35:07] A I CAN FACILITATE THE
[00:35:10] CAPABILITIES OF US TO THRIVE. THANK YOU.
[00:35:13] WITH TARIFFS, WITH THE 50% TARIFF ON CERTAIN CANADIAN PRODUCTS.
[00:35:17] MS. MARTIN FROM YOUR SEAT AT THE NEW YORK STOCK EXCHANGE, YOU'VE A REAL TIME VIEW OF HOW THIS IS
[00:35:21] AFFECTING COMPANIES. WHEN A COMPANY FACES A SUDDEN COST INCREASE LIKE A 50% TARIFF.
[00:35:26] WHAT DO YOU SEE THAN THEM ABSORBING IT OR PASSING IT ON TO
[00:35:29] CONSUMERS OR WHAT ARE YOU SEEING RIGHT NOW WITH GIVEN ALL THESE TARIFFS?
[00:35:32] I CAN'T REALLY COMMENT ON HOW
[00:35:34] ANY ONE COMPANY IS TREATING THIS. I'D BE MORE THAN HAPPY TO FOLLOW
[00:35:38] UP WITH YOU SEPARATELY. I'D LOVE TO TALK TO YOU ABOUT THAT, IF THAT'S OKAY. PLEASE. THANKS.
[00:35:41] YIELD BACK. THANK YOU. GENTLEMAN YIELDS BACK. THE CHAIR RECOGNIZES THE GENTLE
[00:35:45] LADY FROM CALIFORNIA, MRS. KIM, FOR FIVE MINUTES.
[00:35:47] THANK YOU, CHAIRMAN AND RANKING
[00:35:50] MEMBER, FOR TODAY'S HEARING. AND I WANT TO THANK ALL OUR WITNESSES FOR JOINING US.
[00:35:54] YOU KNOW, EARLY THIS YEAR, 150
[00:35:57] CALIFORNIANS VOICED SHOCKED WHEN
[00:35:59] THEY RECEIVED MAIL FROM THE
[00:36:03] COUNTY SAYING THEIR PROPERTY TAX PAYMENTS HAD NOT BEEN RECEIVED,
[00:36:06] EVEN THOUGH THEY HAD BEEN MAILED ON TIME.
[00:36:10] IT WAS EVENTUALLY REVEALED THAT
[00:36:12] FRAUDSTERS HAD STOLEN THEIR CHECKS.
[00:36:15] THEY WASH THEM AND THEY STOLE THEIR HARD EARNED MONEY. AND LEAVING THEM WITH LATE
[00:36:19] NOTICES ON THEIR PROPERTY TAXES.
[00:36:23] THANKFULLY, MY CONSTITUENTS IN ORANGE RIVERSIDE AND SAN BERNARDINO COUNTIES WERE
[00:36:28] UNAFFECTED BY THESE FRAUDSTERS.
[00:36:30] THEY GET BOLDER AND WE NEED TO
[00:36:33] TAKE PROACTIVE ACTION AS A RESULT TO PREVENT THESE KINDS OF
[00:36:37] SCAMS. SO THAT'S WHY I INTRODUCED STOP
[00:36:41] PAYMENTS FRAUD ACT TO EMPOWER
[00:36:43] BANKS TO BE ABLE TO IDENTIFY
[00:36:45] THOSE CHECK IN WHILE FRAUD TO
[00:36:47] STOP AMERICANS HARD EARNED MONEY FROM BEING STOLEN FROM THEM.
[00:36:51] NOT SURE IF YOU HAD A CHANCE TO REVIEW THE BILL, BUT WE WERE
[00:36:53] TRYING TO GIVE THE FINANCIAL INSTITUTIONS ADDITIONAL TIME.
[00:36:57] WHEN THERE IS A RED FLAG TO BE ABLE TO GO AFTER THESE TO
[00:37:01] PROTECT OUR HARD EARNED DOLLARS. SO, MS.
[00:37:05] GRANGER, HOW DOES GIVING BANKS
[00:37:07] MORE FLEXIBILITY TO IDENTIFY CHECK AND WIRE FRAUD BETTER
[00:37:10] PROTECT CONSUMERS? AND MAYBE YOU CAN ALSO TALK ABOUT, YOU KNOW, LIKE WE HAVE
[00:37:14] NOVEL TECHNOLOGY E.G., LIKE
[00:37:16] DIGITAL ASSETS, BLOCKCHAIN AND PAYMENT RAILS.
[00:37:19] SO WHY AREN'T FRAUDSTERS TARGETING CHECKS AND WILES?
[00:37:23] I THANK YOU, CONGRESSWOMAN, FOR YOUR LEADERSHIP IN THIS ISSUE.
[00:37:26] WE FIGHTING FRAUD AND SCAMS IS A SIGNIFICANT ISSUE FOR THE
[00:37:31] FINANCIAL SERVICES INDUSTRY AND AND CONSUMERS.
[00:37:34] AND FRANKLY, ALL INDUSTRIES. THEY'RE ALL BEING IMPLICATED IN
[00:37:38] THE FRAUD THAT'S UNDERTAKEN TODAY. AND WE'RE SEEING IT IN MANY
[00:37:42] DIFFERENT VECTORS, AS YOU NOTED. GOING BACK TO WHAT PEOPLE ARE
[00:37:45] SURPRISED BY, CHECK WASHING,
[00:37:47] SOMETHING THAT WE HAVE DEALT WITH PERIODICALLY OVER TIME,
[00:37:51] FRAUDSTERS ARE GOING TO GO AT WHATEVER THEY CAN.
[00:37:55] MOST EASILY AND CHEAPLY DO, LIKE ANYTHING ELSE, THEY LIKE TO RUN
[00:37:58] AN EFFICIENT OPERATION. AND SO WE NEED TO MAKE THAT HARDER.
[00:38:02] WE NEED TO RAISE THE BAR, IN FACT, THE LEADERSHIP, TO TRY TO
[00:38:05] PHASE OUT CHECK PAYMENTS IS ALSO
[00:38:09] SOMETHING THAT THAT WE WELCOME. I MEAN, WE RECOGNIZE THERE ARE MANY CONSUMERS WHO STILL USE
[00:38:12] THEM, BUT WE NEED TO TO PHASE THAT OUT. SO IT IS IMPORTANT.
[00:38:16] AND AS YOU LOOK AT THE WE'VE TALKED A LITTLE BIT ABOUT A.I. AT THIS HEARING TO THE CHANGES
[00:38:20] IN TECHNOLOGY ARE GOING TO MAKE THAT FRAUD EVEN GREATER.
[00:38:22] SO YOUR BILL IS HUGELY IMPORTANT
[00:38:24] HOLDS WORK AND THE ABILITY FOR FINANCIAL INSTITUTIONS TO PAUSE
[00:38:28] AND TAKE A LOOK AT THOSE TRANSACTIONS. BUT A LOT OF OTHER THINGS THAT
[00:38:31] NEED TO HAPPEN TO INCLUDING TRYING TO STOP THOSE FRAUDSTERS
[00:38:35] FROM EVEN ACCESSING CONSUMERS TO BEGIN WITH. AND IT'S PRETTY MUCH THE
[00:38:39] VULNERABLE POPULATION, ESPECIALLY THOSE SENIOR CITIZENS
[00:38:41] WHO CONTINUE TO STILL RECEIVE
[00:38:43] THEIR SOCIAL SECURITY CHECKS
[00:38:46] THROUGH, YOU KNOW, REGULAR HARD
[00:38:48] CHECKS VERSUS MANY OF THEM, EVEN THOUGH THEY TRANSITION TO
[00:38:52] RECEIVING THEIR CHECKS, YOU KNOW, DIRECT BANKS DEPOSITS.
[00:38:56] SO AS THEY CONTINUE TO USE THOSE
[00:38:59] CHECKS AND WIRES, WE DEFINITELY NEED TO ADVANCE LEGISLATION LIKE
[00:39:03] MINE TO PROTECT THOSE COMMUNITIES AND PREVENT THOSE
[00:39:06] FRAUDSTERS FROM CONTINUING TO STORE, STEAL THEIR HARD EARNED
[00:39:11] DOLLARS. I WANT TO FOCUS ON THE IMPACTS
[00:39:13] OF THE GENIUS ACT AND THE WORK THAT THIS COMMITTEE HAS DONE TO
[00:39:17] UNLOCK THE BENEFITS OF DIGITAL ASSETS.
[00:39:20] SO MR. OCTOBER, I WANT TO SPEAK TO YOU AS WE CONTINUE TO UNPLUG,
[00:39:24] GIVE HIM OVATION. IT IS CRITICAL THAT THIS INNOVATION IS CENTERED ON
[00:39:29] MAINTAINING THE DOMINANCE OF U.S. DOLLAR. SO ALMOST EVERY SINGLE
[00:39:33] STABLECOIN IS MINTED IN U.S. DOLLARS.
[00:39:36] SO WHAT ARE THE DAMAGES IF WE FAIL TO CONTINUE TO UNPLUG
[00:39:40] INNOVATION IN A FOREIGN ALTERNATIVE TAKES OVER THE
[00:39:44] STABLE COIN ISSUANCE? WELL, THANK YOU FOR YOUR LEADERSHIP ON ALL OF THESE
[00:39:48] ISSUES. IT COULD BE POTENTIALLY VERY
[00:39:51] DAMAGING TO THIS NATION IF THE
[00:39:53] DOLLAR AND GENIUS STABLECOINS DO
[00:39:57] NOT RISE AND BECOME, YOU KNOW,
[00:39:59] THE DOMINANT CURRENCY ON WHAT WE CALL THE INTERNET FINANCIAL
[00:40:04] SYSTEM. SO NUMBER ONE, GENIUS ACT SETS
[00:40:07] THAT GLOBAL STANDARD. SO THE DOLLAR IS STRONG. EVERYTHING IS BACK ONE FOR ONE.
[00:40:11] AND IT ALSO ENSURES THAT THE
[00:40:13] DOLLAR WILL BE MAINTAINED AND
[00:40:16] U.S. LAW WILL FOLLOW THAT DOLLAR EVERYWHERE IT GOES.
[00:40:18] CAN YOU JUST TALK ABOUT SOME OF
[00:40:20] THE THE BENEFITS STABLECOINS
[00:40:23] GIVE TO THE AMERICAN BUSINESSES
[00:40:26] IN TERMS OF MAKING PAYMENTS AND SETTLING TRANSACTIONS MORE
[00:40:30] EFFICIENTLY? STABLECOIN ALLOWS YOU TO SEND A
[00:40:33] DOLLAR IS EASILY AS YOU SEND AN
[00:40:35] EMAIL SAFE, SECURE AND INSTANTANEOUSLY.
[00:40:39] AND SO WHAT THAT DOES IS IT REDUCES THE FRICTION OF SENDING
[00:40:43] MONEY. NUMBER ONE, THE TIME BUSINESS IS DON'T HAVE TO WAIT 2 TO 3 DAYS
[00:40:46] TO GET THEIR MONEY AND CONSUMERS.
[00:40:49] AND SECONDLY, VIRTUALLY NO FEES. SO ALL OF THOSE INTERCHANGE
[00:40:53] FEES, TWO, 3% THAT CAN REALLY EAT INTO A SMALL BUSINESS'S
[00:40:56] PROFITS GO AWAY WHEN YOU USE STABLECOINS. THANK YOU VERY MUCH.
[00:41:00] MY TIME IS UP. I YIELD BACK. THE GENTLELADY YIELDS BACK.
[00:41:04] THE CHAIR RECOGNIZES THE GENTLE LADY FROM GEORGIA. MS. WILLIAMS, FOR FIVE MINUTES.
[00:41:08] THANK YOU, CHAIRMAN HILL AND RANKING MEMBER WATERS FOR
[00:41:11] CONVENING TODAY'S HEARING. STRENGTHENING THE AMERICAN ECONOMY.
[00:41:14] SO LET'S TALK ABOUT IT. PROFESSOR HAMILTON, I'M GOING TO
[00:41:18] HAVE A FEW QUESTIONS FOR YOU. SO LET ME START WITH THREE NUMBERS.
[00:41:21] IN METRO ATLANTA, MEDIAN RENT IS NOW OVER $1,700 A MONTH.
[00:41:24] AND I KNOW SOME OF YOU'RE THINKING THAT'S NOT THAT MUCH.
[00:41:28] BUT COME TO THE SOUTH AND YOU'RE EXPECTING LOW RENT.
[00:41:30] Y'ALL, YOU'RE EXPECTING TO LIVE IN AFFORDABLE LIFE.
[00:41:34] GAS IS PUSHING TOWARDS $5 A
[00:41:36] GALLON AND THIS YEAR, FOR THE FIRST TIME IN THREE YEARS, REAL
[00:41:41] WAGES ACTUALLY FELL. THAT MEANS PAYCHECKS BUY LESS
[00:41:44] THAN THEY DID 12 MONTHS AGO. AND MORE AMERICANS ARE
[00:41:47] CONTINUING TO EXPERIENCE MORE
[00:41:49] MONEY THAN MONEY WRAPPED CHICKENS.
[00:41:52] MY COLLEAGUES HERE, THEY WANT TO PAT THEMSELVES ON THE BACK FOR
[00:41:54] THIS ECONOMY. AND SURE, IF YOU'RE IN THE FINANCIAL DISTRICT IN NEW YORK
[00:41:58] CITY OR SILICON VALLEY, IT'S BEEN A GREAT RUN.
[00:42:02] BUT THAT'S NOT WHO I'M THINKING
[00:42:05] ABOUT WHEN I'M MAKING DECISIONS EVERY DAY. AS A MEMBER OF THE UNITED STATES
[00:42:09] CONGRESS, I'M THINKING ABOUT THOSE FAMILIES THAT CALL DEKALB COUNTY HOME.
[00:42:13] RIVERDALE OR ATLANTA, WHERE FAMILIES ARE WORKING FULL TIME
[00:42:16] AND STILL FALLING BEHIND. WHERE FAMILIES ARE CHOOSING
[00:42:20] BETWEEN GAS, MONEY, GROCERIES,
[00:42:22] SCHOOL SUPPLIES AND USING BUY
[00:42:24] NOW PAY LATER PRODUCTS JUST TO FLOAT THEM FROM ONE PAYCHECK TO THE NEXT.
[00:42:29] WHY? WELL, PRESIDENT TRUMP'S NATIONAL
[00:42:32] SECURITY ADVISER SAID CONSUMER
[00:42:34] PAIN OVER THE IRAN WAR IS THE LAST OF THEIR CONCERNS.
[00:42:38] SO MY QUESTIONS ARE KIND OF SIMPLE.
[00:42:41] HOW HAS THIS ECONOMY THAT MY REPUBLICAN COLLEAGUES ARE
[00:42:45] BRAGGING ABOUT ACTUALLY HELPED MAKE AND STITCH ONCE AND THE
[00:42:48] GREATER BROADLY, AMERICAN PEOPLE? I LIKE TO KNOW FROM YOU,
[00:42:52] PROFESSOR, WHETHER THE DATA ACTUALLY BACKS UP THEIR
[00:42:55] ASSERTIONS. PROFESSOR HAMILTON, THE ADMINISTRATION'S TERRORISTS HAVE
[00:42:59] ADDED ABOUT $2,500 A YEAR TO THE AVERAGE HOUSEHOLD'S GROCERY
[00:43:02] BILL, HITTING STAPLES LIKE BEEF
[00:43:04] COFFEE AND PRODUCE IS FOR A MOM IN MY DISTRICT DOING QUICK
[00:43:07] MENTAL MATH IN THE CHECKOUT LINE. SHE'S NOT THINKING ABOUT TRADE
[00:43:11] POLICY, BUT WHETHER SHE CAN AFFORD GROCERIES. THIS WEEK.
[00:43:14] WHAT DOES THE SUSTAINED POLICY DRIVEN INCREASE IN THE COST OF
[00:43:17] JUST FEEDING YOUR FAMILY DUE TO A HOUSEHOLD? THE ABILITY TO SAVE ANYTHING AT
[00:43:23] ALL.
[00:43:25] THINK THE ECONOMY IS TRENDING DOWN. WITHOUT A DOUBT.
[00:43:28] PARTICULARLY FOR YOUR CONSTITUENTS, IT'S ALSO A MISSED
[00:43:32] OPPORTUNITY. IT IS CAPTURED IN OUR GROWTH
[00:43:35] STATISTICS, BUT ALSO HIDDEN
[00:43:37] BECAUSE WE DON'T THIS AGGREGATE BY DISTRIBUTION.
[00:43:40] THOSE THAT ARE NOT DOING SO WELL.
[00:43:42] FOR EXAMPLE, NEW YORK CITY GOES WELL BEYOND WALL STREET.
[00:43:46] THERE ARE A LOT OF PEOPLE IN NEW YORK CITY THAT COULD BE DOING A
[00:43:49] LOT BETTER IF WE HAD GREATER INVESTMENTS IN DIFFERENT
[00:43:54] PRIORITIES. IF WE HAD PRIORITIES WHERE WE
[00:43:56] WOULD LITERALLY PUT THE AMERICAN PEOPLE FIRST.
[00:43:59] PROFESSOR, SINCE THIS AN
[00:44:03] AUTHORIZE RUN WAR BEGAN, GAS PRICES HAVE JUMPED MORE THAN 50%.
[00:44:06] AND PRESIDENT TRUMP HAS TOLD AMERICANS PAYING MORE AT THE
[00:44:09] PUMP JUST REMEMBER WHY HE'S ALSO KEPT TARIFFS IN PLACE THAT
[00:44:13] ECONOMISTS SAY ARE ADDING TO FUEL AND SHIPPING COSTS. FOR A WORKING MOM IN MY
[00:44:17] DISTRICT, DRIVING 30 OR 40 MINUTES EACH WAY TO THEIR JOB.
[00:44:20] THAT'S A REAL MONEY OUT OF THEIR POCKETS EVERY SINGLE WEEK.
[00:44:24] CAN YOU SPEAK TO WHAT THIS CONSISTENT PRICE SHOCK IS LIKE TO A FAMILY?
[00:44:29] THERE'S INSTABILITY WITH REGARDS TO WHETHER WE HAVE TARIFFS ON OR
[00:44:34] OFF. BUT BROADLY SPEAKING, AMERICANS
[00:44:36] ARE FACING HIGH PRICES.
[00:44:38] AND AS YOU POINTED OUT, WAGES AREN'T KEEPING UP.
[00:44:42] AND THAT INSTABILITY ISN'T JUST ON FAMILIES.
[00:44:45] I'VE HEARD FROM I REPRESENT A LOT OF LARGE CORPORATIONS BASED
[00:44:49] IN HEADQUARTERS RIGHT IN ATLANTA.
[00:44:51] AND IT'S NOT ABOUT IF THEY WANT
[00:44:53] TO PAY TARIFFS, BUT LET'S HAVE SOME STABILITY SO THAT PEOPLE
[00:44:57] CAN PLAN AND MAKE PROJECTIONS.
[00:44:59] AND THAT GOES ACROSS THE BOARD.
[00:45:01] BUT FINALLY, PROFESSOR, WHILE FAMILIES DEAL WITH ALL OF THIS,
[00:45:04] MY REPUBLICAN COLLEAGUES MARKED UP LEGISLATION TO STRIP THE
[00:45:08] FEDERAL RESERVE OF ITS OBLIGATION TO FOCUS ON JOBS.
[00:45:10] CUT THE CFP FUNDING NEARLY IN
[00:45:12] HALF AND MOVE TO CUT ITS STAFF.
[00:45:15] THIS IS THE VERY AGENCY THAT'S SUPPOSED TO STOP PEOPLE FROM
[00:45:19] GETTING SCAMMED. AND THROUGH IT ALL, PRESIDENT TRUMP HAS CALLED AFFORDABILITY
[00:45:23] CONCERNS A HOAX. THAT DOESN'T MEAN ANYTHING TO ANYBODY.
[00:45:26] WELL, LET ME TELL YOU, IT MEANS A LOT TO THE PEOPLE THAT OUR
[00:45:30] REPRESENT. PROFESSOR, WHEN PEOPLE ARE WRITING THE RULES.
[00:45:32] WHEN PEOPLE WRITING THE RULES TAKE THE POSITION THAT THIS
[00:45:36] ISN'T A REAL PROBLEM, WHAT HAPPENS TO FAMILIES?
[00:45:39] YEAH, I THINK A BIG BROAD POINT
[00:45:41] IS WE DON'T ASK THAT QUESTION. FOR WHOM WE NEED TO THINK ABOUT
[00:45:45] THE FOR WHOM AND MAKE SURE THAT IT IS INCLUSIVE. AND AS YOU POINTED OUT, IT ISN'T
[00:45:49] JUST FAMILIES, CORPORATIONS THEMSELVES, WHEN THEY HAVE
[00:45:53] INSTABILITY, WHEN THEY HAVE
[00:45:57] INSTABILITY AND HIGH PRICES, IT REVERBERATES. THANK YOU SO MUCH.
[00:46:00] WHAT I HEAR FROM YOU IS WHAT I HEAR FROM MY CONSTITUENTS EVERY DAY.
[00:46:04] THIS ISN'T ABOUT NUMBERS ON A CHART. IT'S ABOUT WHETHER A FAMILY CAN
[00:46:07] KEEP THEIR HEAD ABOVE WATER. THANK YOU. AND I YIELD BACK. THE GENTLELADY YIELDS BACK.
[00:46:11] THE CHAIR RECOGNIZES THE GENTLEMAN FROM WISCONSIN, MR.
[00:46:14] FITZGERALD, FOR FIVE MINUTES. THANK YOU, CHAIRMAN, AND THANK YOU FOR BEING HERE TODAY.
[00:46:18] I KNOW YOU'VE BEEN HERE FOR THREE HOURS, SO AND I KNOW THERE'S SOME REDUNDANCY IN THE
[00:46:22] QUESTIONS WHEN YOU GET TO THIS POINT.
[00:46:25] BUT TO PRESIDENT HER, I JUST
[00:46:29] WANTED TO DIG A LITTLE BIT DEEPER IN TO THE THE IDEA THAT
[00:46:33] THE REGULATORS HAVE ALREADY TAKEN SOME STEPS TO KIND OF TAILOR THE SUPERVISION OF
[00:46:37] COMMUNITY BANKS.
[00:46:40] CAN YOU JUST EXPLAIN WHY IT'S
[00:46:42] IMPORTANT FOR CONGRESS TO GO IN AND CODIFY THOSE REFORMS IN LAW
[00:46:48] RATHER THAN LEAVE THEM SUBJECT TO CHANGE FROM ONE ADMINISTRATION TO THE NEXT?
[00:46:52] I THINK SOMETIMES WE LOSE KIND
[00:46:54] OF THAT BACK AND FORTH.
[00:46:56] WE'RE NOT WATCHING IT CLOSELY.
[00:46:58] AND AS A RESULT OF THAT, IT'S
[00:47:02] HARD TO REALLY JUDGE WHAT'S HAPPENING KIND OF IN THE PRIVATE SECTOR.
[00:47:06] CONGRESSMAN, THANK YOU SO MUCH FOR THAT QUESTION AND HIGHLIGHTING THAT IMPORTANT ISSUE.
[00:47:09] AND IT REALLY IS TRUE. WHAT WE NEED FOR THE BANKING
[00:47:15] INDUSTRY, THAT IS TO SERVE OUR CUSTOMERS AND OUR COMMUNITIES IS
[00:47:17] THAT CERTAINTY AND DURABILITY.
[00:47:19] AND AS MUCH AS THE REGULATORS
[00:47:22] CAN GO IN AND I DO BELIEVE THEY'RE DOING A LOT OF THE RIGHT
[00:47:26] THINGS TO TRY TO RECALIBRATE AND
[00:47:28] RIGHT SIZE REGULATORY THRESHOLD,
[00:47:31] THE ONES THAT THEY CAN AND THE NEXT PERSON COMING INTO THAT SEAT CAN MAKE A CHANGE.
[00:47:36] AND SO HAVING CONGRESS WEIGHING IN AND RECOGNIZING THE
[00:47:39] IMPORTANCE OF HAVING BANKS OF
[00:47:41] ALL SIZES OPERATING, OF TAYLORS
[00:47:43] IN THE REGULATORY REGIME SO THAT THE LOCAL COMMUNITIES CAN BE
[00:47:48] SERVED BY BANKERS WHO UNDERSTAND
[00:47:50] THEM AND CAN REALLY DRIVE LOCAL DECISION MAKING AND PROVIDING
[00:47:54] THE CREDIT NEEDS OF FARMERS AND FAMILIES AND SMALL BUSINESSES LOCALLY.
[00:47:58] IT'S A HUGE BENEFIT OF THE AMERICAN SYSTEM AND ONE THAT,
[00:48:01] AGAIN, CONGRESS RIGHTFULLY CAN CAN WEIGH IN ON.
[00:48:04] AND THANKFULLY HAS IN SEVERAL
[00:48:06] PROVISIONS IN THE BIPARTISAN
[00:48:08] PLAN ROAD TO HOUSING ACT AND CERTAINLY THAT IN THE MAIN STREET CAPITAL ACCESS BILL.
[00:48:12] SO WE ENCOURAGE CONTINUED ACTION ON THOSE ON THOSE BILLS.
[00:48:16] THANK YOU VERY MUCH, CHAIRMAN. I'M GOING TO YIELD BACK THE BALANCE OF MY TIME.
[00:48:20] GENTLEMAN YIELDS BACK. I RECOGNIZE MYSELF NOW FOR FIVE MINUTES.
[00:48:24] I FIRST WANT TO THANK YOU AND EVERYBODY HERE FOR BEING HERE TODAY.
[00:48:27] I THINK IT IS CLEAR THERE'S NOT A COMMITTEE IN CONGRESS THAT HAS DONE MORE TO ADDRESS
[00:48:32] AFFORDABILITY IN THE 119TH CONGRESS THAN THE HOUSE FINANCIAL SERVICES COMMITTEE.
[00:48:36] AND WE'VE DONE IT IN A
[00:48:38] BIPARTISAN FASHION BETWEEN THE WORKING FAMILIES, TAX CUTS IN
[00:48:41] THE 21ST CENTURY, ROAD TO HOUSING ACT. WE HAVE DELIVERED REAL RESULTS FOR THE AMERICAN PEOPLE.
[00:48:45] I'M ESPECIALLY PROUD OF THE WORK
[00:48:48] WE PASSED WITH THE 21ST CENTURY ROAD TO HOUSING ACT, WHICH WAS
[00:48:51] THE MOST TRANSFORMATIVE PIECE OF HOUSING LEGISLATION IN DECADES.
[00:48:54] THIS BILL WAS ONLY PASSED INTO LAW BECAUSE OF STRONG BIPARTISAN
[00:48:58] COLLABORATION. IT'S THE WAY CONGRESS IS
[00:49:01] SUPPOSED TO WORK.
[00:49:02] MR. POLLACK, IN YOUR TESTIMONY,
[00:49:05] YOU ALSO SHOWCASE JUST HOW MUCH THIS BILL I'M TALKING ABOUT WILL
[00:49:09] IMPACT HOUSING AFFORDABILITY AND HOW IT HAS REFLECTED, QUOTE,
[00:49:12] YEARS OF BIPARTISAN, BICAMERAL COLLABORATION, END QUOTE.
[00:49:15] HOWEVER, THERE IS MORE TO BE DONE TO ADDRESS FEDERAL
[00:49:18] GOVERNMENT BARRIERS TO GREATER HOUSING DEVELOPMENT.
[00:49:20] FOR EXAMPLE, MY LEGISLATION WITH REP GOODLANDER AND THE BUILD
[00:49:26] HOUSING AFFORDABILITY ACT WOULD TEMPORARILY PAUSE THE
[00:49:29] IMPLEMENTATION OF BUILD AMERICA,
[00:49:31] BUY AMERICA ACT ON AFFORDABLE HOUSING UNTIL A STUDY IS
[00:49:33] COMPLETED ON ITS EFFECTS.
[00:49:35] THEN ONCE THOSE REQUIREMENTS ARE RETURNED, HUD WOULD BE ON THE
[00:49:39] CLOCK TO APPROVE OR DENY WAIVERS IN 90 DAYS.
[00:49:41] IN YOUR OPINION, HOW WOULD
[00:49:43] POLICY CHANGES LIKE THIS INFLUENCE AFFORDABILITY?
[00:49:46] AND ARE THERE OTHER REFORMS YOU CAN THINK OF THAT WE STILL NEED TO ADDRESS?
[00:49:50] THANKS, CONGRESSMAN. I THINK, OF COURSE, IT'S RIGHT
[00:49:53] TO KEEP WORKING ON THIS. IT'S NEVER DONE.
[00:49:56] WE HAVE A LONG WAY TO GO TO A
[00:49:57] REALLY VIBRANT.
[00:50:01] SYSTEM WITH WITH THE MAXIMUM AFFORDABILITY.
[00:50:04] I DO HAVE ONE PARTICULAR ITEM, AND IT'S SOMETHING YOU AND I
[00:50:08] HAVE TALKED ABOUT IN THE PAST,
[00:50:10] AND THAT IS THE ABILITY OF
[00:50:14] BORROWERS WITH OLD CHEAP
[00:50:16] MORTGAGES WHO ARE NOW SITTING ON HOUSES SO THEY DON'T COME ON THE
[00:50:21] MARKET AND IT SUPPRESSES SUPPLY
[00:50:23] IN AND HURTS AFFORDABILITY. WHETHER THOSE BORROWERS COULD,
[00:50:26] IN FACT YOU FEES THOSE MORTGAGES. I DON'T KNOW IF YOU SAW THE LAST
[00:50:31] PARAGRAPH IN MY WRITTEN TESTIMONY, CONGRESSMAN, BUT I
[00:50:33] POINT OUT THAT THAT CONCEPT WHICH WE HAVE DISCUSSED AND
[00:50:37] WHICH PAUL KUBIAK, MY COLLEAGUE AND I WROTE ON, WE HAVE
[00:50:41] DISCOVERED A COMPANY THAT'S ACTUALLY DOING THIS IN THE
[00:50:44] AMERICAN MARKET PRINCIPALLY WITH
[00:50:50] MORTGAGE LENDERS WHO KEEP THE MORTGAGES IN PORTFOLIO IS A GOOD
[00:50:53] EXAMPLE OF THE COMMUNITY BANK IDEA AND THEREFORE CAN DO
[00:50:57] CREATIVE THINGS WITH THEIR CUSTOMERS. IF YOU IF YOU WANT TO BE
[00:51:01] INTERESTED IN THAT, I'D LOVE TO GET YOU SOME MORE INFORMATION ON. WELL, I APPRECIATE THAT BECAUSE
[00:51:05] I WENT DOWN A RABBIT HOLE ON THE IDEA OF DEFICITS.
[00:51:09] AND ONE OF THE CHALLENGE IS THAT I AM CONCERNED ABOUT BECAUSE I
[00:51:11] DO REALLY LIKE THE CONCEPT. AND I THINK IT'S WORKING IN
[00:51:16] COUNTRIES LIKE DENMARK. YES. AND I DON'T KNOW WHO THIS
[00:51:18] COMPANY IS OR HOW THEY'RE ACTUALLY DOING IT, BUT ARE THEY HOW DO THEY HOW DOES THAT
[00:51:22] RECONCILE WITH THE MORTGAGE BACKED SECURITY? I MEAN, IF YOU'RE HOLDING
[00:51:26] MORTGAGE BACKED SECURITIES AND SUDDENLY YOU THINK YOU'VE GOT COLLATERAL AND X, BUT YOU REALLY
[00:51:29] GOT COLLATERAL, AND WHY? HOW DO THEY NAVIGATE THAT?
[00:51:33] THE MORTGAGE BACKED SECURITY MAKES IT HARDER. THIS WORKS ACTUALLY, WITH
[00:51:37] LENDERS WHO HAVE THE LOAD IN PORTFOLIO SO AND WHO CAN DEAL
[00:51:40] WITH THEIR CUSTOMERS AND END UP
[00:51:42] IN A WAY WHERE THE CUSTOMER GETS
[00:51:45] THE VALUE OF THE MORTGAGE.
[00:51:48] THAT IS TO SAY, YOU BASICALLY
[00:51:50] CAN REFINANCE AT MARKET AS OPPOSED TO AT PAR.
[00:51:54] BUT THE BUT THE LENDER IS
[00:51:56] COMPLETELY HAS ALL THE SAME CASH FLOWS HE HAD BEFORE.
[00:52:00] WELL, THAT MAKES SENSE. I'D LOVE TO COME SEE AND TALK ABOUT THAT. THAT MAKES SENSE.
[00:52:04] IF THE IF THE LENDER IS HOLDING THE MORTGAGE AND THEY HAVEN'T
[00:52:07] PUT IT ON THE SECONDARY MARKET,
[00:52:08] WHAT PERCENTAGE OF OF MORTGAGE
[00:52:11] LOANS IN AMERICA AREN'T TOUCHING THE SECONDARY MARKET OR THE G
[00:52:14] TWO SECONDARY MARKET IS DOMINANT, BUT THERE ARE STILL A LOT OF THERE IS STILL A LOT OF
[00:52:18] PORTFOLIO LENDERS AND LOANS IN PORTFOLIO. THE TWO FOR WHICH THIS THIS
[00:52:22] COULD BE INTERESTING IS VERY NEW. IT'S JUST BEING INTRODUCED.
[00:52:25] BUT I THINK AS A PIECE OF
[00:52:29] DEVELOPMENT, IT'S QUITE INTERESTING.
[00:52:31] MAYBE IF YOU ARE GRANTED A FAST PASS TO COME INTO MY OFFICE AND
[00:52:35] EXPLAIN THIS BECAUSE I AM INTRIGUED BY THE CONCEPT.
[00:52:38] YOU KNOW, WHAT I THINK IS MORE IMPORTANT TO ME THAN ANYTHING
[00:52:41] ABOUT THIS CONGRESS IS THAT TOGETHER, THE LEADERS OF THE
[00:52:44] DEMOCRATS AND THE REPUBLICANS WITH THE RANKING MEMBER WHO'S SITTING TO MY RIGHT AND OUR
[00:52:49] CHAIRMAN, MR. CLEAVER, WE ALL WORKED WITH A SENSE OF
[00:52:53] CREATIVITY TO TRY AND FIND ANSWERS TO THESE QUESTIONS. AND THERE ARE MORE QUESTIONS
[00:52:56] THAT WE NEED ANSWERS FOR AND IT'S GOING TO BE A LONG TIME FOR
[00:53:01] SOME PEOPLE BEFORE THEY EVER CONSIDER SELLING THEIR HOME. WHEN YOUR CURRENT 30 YEAR FIXED
[00:53:06] RATE IS 2.9% AND THAT COULD HAVE A DECADE LONG PLUS PROBLEM.
[00:53:11] YOU KNOW, FOR US. SO I'M GLAD. MR. POLLOCK, THAT YOU ARE STILL
[00:53:14] INTERESTED IN DEFEASANCE, AND I LOOK FORWARD TO LEARNING MORE.
[00:53:18] WITH THAT, I YIELD BACK.
[00:53:19] THE CHAIR NOW RECOGNIZES THE GENTLEMAN FROM FLORIDA, MR.
[00:53:25] HARIDOPOLOS FOR FIVE MINUTES.
[00:53:28] WELL, THANK YOU, MR. CHAIRMAN. ALWAYS GREAT TO BE HERE AND
[00:53:32] APPRECIATE YOUR PATIENCE WITH ME, IF THAT'S RIGHT.
[00:53:35] AND AS FAR AS WANTED TO GET INTO
[00:53:39] SOME OF THE ISSUES AND YOUR. GOOD TO SEE YOU AGAIN.
[00:53:44] HOW DO EXCESSIVE OR POORLY TAILORED REGULATION TRANSLATE
[00:53:47] INTO FEWER LOANS AND HIGHER COST? HER MAIN STREET BUSINESSES AND
[00:53:51] COULD RIGHT SIZING THE REGULATORY FRAMEWORK ALLOW THOSE
[00:53:54] BANKS TO PUT MORE OF THEIR RESOURCES TOWARDS LENDING AND
[00:53:57] KEEPING PEOPLE IN HOMES? THANK YOU, CONGRESSMAN.
[00:53:59] A CRITICALLY IMPORTANT TOPIC AND ALWAYS GOOD TO SEE YOU.
[00:54:02] SO I'D SAY THAT THE WORK THAT
[00:54:06] THE CONGRESS HAS BEEN DOING, THAT THE REGULATORS HAVE BEEN
[00:54:08] DOING TO RIGHT SIZE REGULATION IS MAKING A BIG DIFFERENCE.
[00:54:11] I KNOW IT'S MAKING A BIG DIFFERENCE IN FLORIDA AND IN YOUR DISTRICT AS OUR BANK
[00:54:14] MEMBERS ARE TALKING ABOUT THE
[00:54:17] OPPORTUNITY TO FOCUS ON EXACTLY
[00:54:20] WHAT THEIR CUSTOMERS NEED AND
[00:54:24] ACTUALLY ABLE TO BE FOCUSED ON CUSTOMER SERVICE, ON TECHNOLOGY,
[00:54:26] ON INVESTMENT IN THEIR OPERATIONS, AS OPPOSED TO FOCUS
[00:54:30] SOLELY ON COMPLIANCE AND CHECK THE BOX EXERCISES.
[00:54:34] SOME KEY REGULATORY CHANGES THAT
[00:54:37] WERE SO OUTDATED.
[00:54:39] AND THEY WERE SET IN THE 1970S,
[00:54:42] ONE IN PARTICULAR THAT I KNOW WOULD RESONATE TO FOR COMMUNITY
[00:54:45] BANK IN YOUR DISTRICT IS THAT
[00:54:48] YOU THERE WERE LIMITS UNDER REGO
[00:54:50] APPROPRIATELY SO ON INSIDER
[00:54:52] LENDING SO BANKS LEADERSHIP
[00:54:55] BEING ABLE TO USE THE PRODUCTS AND SERVICES THAT THEIR BANK SELLS BUT WHEN THEY CAN'T
[00:54:59] ACTUALLY EVEN HAVE A CREDIT CARD
[00:55:01] FROM THEIR BANK BECAUSE THEY'RE LENDING LIMITS $2,500, ALL OF
[00:55:04] THEIR CUSTOMERS ARE SAYING, WHY DON'T YOU USE THE CREDIT CARD
[00:55:08] THAT YOU ACTUALLY YOU'RE TRYING TO SELL TO ME?
[00:55:10] SO REGO CHANGES WHERE A SIGNIFICANT IN THAT AREA TOO SO
[00:55:13] A LOT OF THINGS THAT JUST DON'T MAKE SENSE THAT ARE BEING
[00:55:17] ADDRESSED TODAY THANKFULLY. AND GETTING BACK TO YOUR
[00:55:21] QUESTION ABOUT BANKING, WHAT ARE WHAT ARE THE YOUR CUSTOMERS
[00:55:23] TELLING YOU RIGHT NOW IS THE BIGGEST CHALLENGE THEY'RE FACING
[00:55:27] AS THEY COME IN AND LOOK FOR A BUSINESS LOAN, A HOME LOAN, A PERSONAL LOAN? WHAT ARE THEY TELLING YOU RIGHT
[00:55:31] NOW? YES.
[00:55:31] IN TERMS OF WHERE THE ACTIVITY
[00:55:36] AND WHERE THE ECONOMY IS IN THEIR MIND AND WHAT WE COULD DO,
[00:55:39] CAN YOU DO SOME OF THE GOOD WORK THAT OUR CHAIRMAN OR OUR SUB
[00:55:41] CHAIRMAN TODAY DID ON AFFORDABLE HOUSING OTHERWISE? YES, I KNOW.
[00:55:45] I'D SAY THEY'RE SAYING AGAIN THAT THE ACTIVITY IS IS
[00:55:49] POSITIVE, THAT GENERALLY THERE'S
[00:55:52] A LOT OF OPTIMISM FROM THEIR CLIENTS AND CUSTOMERS COMING TO
[00:55:55] SEE THEM AND THEIR TAKING ADVANTAGE OF THE PRODUCTS AND
[00:55:59] SERVICES THAT THE BANKS ARE OFFERING. I THINK WE ARE EXCITED, TOO,
[00:56:02] ABOUT THE CHANGES WHEN IT COMES TO THE DIGITAL ASSET SPACE TOO.
[00:56:06] AN INNOVATION. AND IN TERMS OF WHAT THAT CAN
[00:56:10] OFFER TO BANK CUSTOMERS GOING FORWARD. GREAT. THANK YOU.
[00:56:14] WHAT ARE THE ISSUES THAT I WORKED ON LAST YEAR?
[00:56:16] WAS THE IS THE GREEN LIGHTING GROWTH ACTIVITIES? THAT IS PART OF THE COMMITTEE'S
[00:56:20] INVEST ACT AND MAKING SURE THAT SOME OF THOSE SMALLER COMPANIES
[00:56:24] HAVE HAD THE ABILITY TO MOVE UP, WHETHER IT BE BY PURCHASING
[00:56:27] OTHER COMPANIES OR NOT HAVING SO MUCH PAPERWORK SO THEY CAN
[00:56:31] COMPETE WITH THE BIGGER COMPANIES ALONG THE WAY. WHERE DO YOU ALL SEE THE INVEST
[00:56:36] THAT GOING IN THE FUTURE? I'M NOT SURE I WOULD ANSWER THAT
[00:56:40] BEST.
[00:56:40] MAYBE LEND I THINK WE AGAIN
[00:56:46] APPLAUD THE THE FACT THAT THE
[00:56:48] INVEST ACT WAS ADDRESSING A
[00:56:50] COUPLE OF ISSUES THAT WE AGREE WITH IN MARKETS AND ONE
[00:56:54] BROADENING OF ACCESS FROM AN INVESTMENT STANDPOINT TO
[00:56:58] INVESTORS OF ALL SHAPES AND SIZES, BUT THEN ALSO PAVING THE
[00:57:01] WAY FOR COMPANIES TO TAP OUR
[00:57:03] PUBLIC MARKETS A LOT QUICKER.
[00:57:06] SO WHERE INCREDIBLY OPTIMISTIC
[00:57:08] ABOUT THE PRINCIPLES THAT ARE
[00:57:11] SET FORTH, I CAN'T SPECIFICALLY GO INTO ANY ONE PROVISION, BUT
[00:57:14] I'D LOVE TO TALK TO YOU ABOUT IT MORE. WELL, IT'S DIFFERENT.
[00:57:18] I THANK YOU FOR YOUR TIME TODAY AND WE ARE EXCITED THAT THIS
[00:57:22] COMMITTEE HAS DONE SOME PRODUCTIVE WORK, ESPECIALLY WITH AFFORDABLE HOUSING AND OF COURSE, ON SOME OF THE CRYPTO
[00:57:27] LEGISLATION AND THROUGHOUT. AND IT'S IT'S IT'S NICE TO SEE THAT THOSE SMALLER COMMUNITY
[00:57:30] BANKS HAVE THE ABILITY TO COMPETE NOW WITH THIS ENERGY SIMPLY DIDN'T HAVE IN THE PAST
[00:57:34] BECAUSE THIS VISION IS MADE BY DODD FRANK AND OTHERS. AND I HOPE WE CAN CONTINUE THIS
[00:57:39] TREND WHERE WE MAKE THIS MORE COMPETITIVE FIELD IN THE WAY WE
[00:57:41] REDUCE PRICES SIMPLY BY OFFERING MORE COMPETITORS. AND WITH THAT, MR. CHAIRMAN, I
[00:57:45] APPRECIATE THE OPPORTUNITY TO SPEAK TODAY AND I YIELD BACK. GENTLEMAN YIELDS BACK.
[00:57:49] THE CHAIR NOW RECOGNIZES MY QUESTIONS.
[00:57:54] I WOULD LIKE TO THANK ALL THE WITNESSES FOR THEIR TESTIMONY TODAY. WITHOUT OBJECTION, ALL MEMBERS
[00:57:58] WILL HAVE FIVE LEGISLATIVE DAYS TO SUBMIT ADDITIONAL WRITTEN QUESTIONS FOR THE WITNESSES TO
[00:58:01] THE CHAIR. THE QUESTIONS WILL BE FORWARDED TO THE WITNESSES FOR THEIR RESPONSE.
[00:58:06] WITNESSES, PLEASE RESPOND. NO LATER THAN OCTOBER 7TH, 2026.
[00:58:11] I ASK UNANIMOUS CONSENT TO ENTER INTO THE RECORD.
[00:58:14] SEVERAL STATEMENTS WERE RECEIVED OUTLINING MAJOR CONCERNS WITH
[00:58:17] THE REPUBLICAN BILL POSTED FOR
[00:58:19] THIS HEARING AND A NEW ONE THAT WOULD UNDERMINE THE CONSUMER
[00:58:23] FINANCIAL PROTECTION BUREAU. THESE TO MR. FROM THE NATIONAL
[00:58:27] CONSUMER LAW CENTER. THE CONSUMER FEDERATION OF
[00:58:30] AMERICA, THE ACP, THE CENTER FOR
[00:58:32] RESPONSIBLE LENDING, AND MORE. WITHOUT OBJECTION, THE
[00:58:37] SERIOUSNESS NOW ADJOURNED FOR
[00:58:39] THE DAY.
[00:58:48] I. TUESDAY LIVE AT 9 A.M. EASTERN ON C-SPAN THREE.
[00:58:52] THE SENATE JUDICIARY COMMITTEE HEARS FROM FBI DIRECTOR CASH
[00:58:56] PATEL DURING A HEARING ON OVERSIGHT OF THE FEDERAL BUREAU OF INVESTIGATION.
[00:59:00] WATCH IT LIVE TUESDAY MORNING AT NINE EASTERN ON C-SPAN, THREE C-SPAN.
[00:59:04] NOW OUR FREE MOBILE VIDEO APP,
[00:59:05] OR ONLINE AT C-SPAN DOT ORG.
[00:59:11] THERE ARE MANY WAYS TO LISTEN TO
[00:59:13] C-SPAN RADIO ANYTIME, ANYWHERE
[00:59:15] IN THE WASHINGTON, D.C. AREA. LISTEN ON 90.1 FM.
[00:59:19] USE OUR FREE C-SPAN NOW APP OR GO ONLINE TO C-SPAN DOT ORG,
[00:59:22] SLASH RADIO ON SIRIUS XM RADIO ON CHANNEL 455.
[00:59:26] THE TUNE IN APP AND ON YOUR SMART SPEAKER BY SIMPLY SAYING
[00:59:30] PLAY C-SPAN RADIO. HERE ARE LIVE CALL IN PROGRAM
[00:59:33] WASHINGTON JOURNAL DAILY AT 7 P.M. EASTERN. LISTEN TO HOUSE AND SENATE
[00:59:36] PROCEEDINGS COMMITTEE HEARINGS, NEWS CONFERENCES, AND OTHER
[00:59:40] PUBLIC AFFAIRS EVENTS LIVE THROUGHOUT THE DAY. AND FOR THE BEST WAY TO HEAR
[00:59:44] WHAT'S HAPPENING IN WASHINGTON WITH FAST PACED REPORTS, LIVE
[00:59:46] INTERVIEWS AND ANALYSIS OF THE DAY.
[00:59:48] CATCH WASHINGTON TODAY, WEEKDAYS AT 5 P.M. AND 9 P.M. EASTER.
[00:59:53] LISTEN TO C-SPAN PROGRAMS ON
[00:59:55] C-SPAN RADIO ANYTIME, ANYWHERE.
[00:59:58] C-SPAN DEMOCRACY UNFILTERED.
[01:00:04] AND NOW KEVIN WARSH GIVES HIS FIRST KEYNOTE AS THE FEDERAL
[01:00:08] RESERVE CHAIR AT THE ANNUAL JACKSON HOLE ECONOMIC POLICY SYMPOSIUM IN WYOMING.
[01:00:12] HE SAID, QUOTE, I'M IMPRESSED BY THE OVERALL APPEARANCE OF THE
[01:00:15] ECONOMY, WHICH APPEARS TO HAVE STRENGTHENED.
[01:00:17] HE ALSO ACKNOWLEDGED RISING COSTS FROM INFLATION.
[01:00:20] THIS IS ABOUT 30 MINUTES.
[01:00:29] GOOD MORNING, KRISTIN.
[01:00:31] THANK YOU FOR THAT SUPER KIND INTRODUCTION. I WAS 25 YEARS AGO THAT WE WERE
[01:00:37] COLLEAGUES. IT'S AN HONOR TO SHARE THE STAGE WITH YOU.
[01:00:39] IT'S GREAT TO BE BACK HERE IN THE VALLEY AGAIN.
[01:00:42] SEE SO MANY FAMILIAR FACES FROM ACADEMIA, FROM MY LAST TOUR OF
[01:00:47] SERVICE AND FROM MY FIRST 100 DAYS, WHICH IS JUST THIS
[01:00:51] WEEKEND. I'VE BEEN LOOKING FORWARD TO THIS WEEKEND.
[01:00:55] AND BEFORE I GO FURTHER, I WANT TO THANK JEFF SCHMIDT AND HIS
[01:00:57] TEAM FOR THE INCREDIBLE HOSPITAL COMMITTEE.
[01:01:00] EVERYBODY HERE IS IN DEBT TO YOU AND YOUR COLLEAGUES HERE AT THE FEDERAL RESERVE BANK OF KANSAS
[01:01:05] CITY. JEFF, OUR THANKS TO YOU AND YOUR TEAM.
[01:01:08] NOW, HE AND THE OTHER PLANNERS
[01:01:10] HERE HAVE SOME RECREATION
[01:01:13] OPTIONS LINED UP FOR LATER TODAY.
[01:01:15] I'D ADVISE YOU TO BE VERY CAREFUL WITH YOUR CHOICES.
[01:01:19] AS I LEARNED YEARS AGO, YOU CAN TAKE TWO DIFFERENT KINDS OF
[01:01:23] HIKES ON THE TRAILS AROUND JACKSON.
[01:01:25] I CAN SUM UP MY HIKES WITH
[01:01:28] FORMER VICE CHAIRMAN DON COHN
[01:01:30] WITH TWO WORDS I SURVIVE THESE
[01:01:35] DAILY MARATHON DEATH MARCHES
[01:01:37] REVEAL THE SIGN OF DON THAT I
[01:01:39] WAS NOT READY FOR. BUT THERE'S ANOTHER KIND OF HIKE.
[01:01:44] THIS ONE WAS WITH FORMER CHAIRMAN BEN BERNANKE, ANOTHER
[01:01:47] DEAR OLD COLLEAGUE.
[01:01:49] WITH BEN, IT WAS A MUCH MORE
[01:01:52] LEISURELY PACE, AN EASY STROLL
[01:01:55] ALONG THE WANDERING TRAILS OF THE ROCKEFELLER PRESERVE.
[01:01:58] SO BEFORE SETTING OUT TODAY, MY
[01:02:02] RECOMMENDATION IS DO A WELLNESS CHECK.
[01:02:04] ASK YOURSELF, IS THIS A COHN DAY
[01:02:06] OR A BERNANKE DAY?
[01:02:08] THE BEST THING ABOUT THIS GATHERING IS THAT IT HELPS US
[01:02:12] ALL GET OUT HERE TO THE MOUNTAINS AND CLEAR OUR MINDS
[01:02:16] AND THINK STRAIGHT ABOUT OUR WORLD AND OUR TIME.
[01:02:20] FOR ME, IT FEELS LIKE THE RIGHT
[01:02:22] PLACE AND THE RIGHT AUDIENCE FOR
[01:02:25] REAL ENGAGEMENT WITH THE IDEAS THAT MATTER MOST.
[01:02:29] INNOVATION, AS CHRISTINE MENTIONED, IS THE CONFERENCE THEME.
[01:02:33] AND I BELIEVE THE PUBLIC IN THE MARKETS UNDERSTAND THAT,
[01:02:37] INNOVATE ACTIONS AND THE CONDUCT OF FED POLICY WILL HELP DELIVER
[01:02:40] PRICE STABILITY ALONGSIDE FULL
[01:02:44] EMPLOYMENT. SO HERE'S A QUICK OVERVIEW OF WHAT I'LL COVER IN MY REMARKS
[01:02:47] THIS MORNING. YOU CAN CALL IT AN OUTLINE AND
[01:02:50] CALL IT A TRAIL MAP. BUT PLEASE, JUST DON'T CALL IT
[01:02:54] FORWARD GUIDANCE.
[01:02:56] FIRST, I'LL TOUCH ON A FEW OF THE LONGER TERM QUESTIONS WE'RE
[01:02:59] ASKING AT THE FED ABOUT THE LATEST GENERAL PURPOSE
[01:03:03] TECHNOLOGY AND WHERE IT MIGHT TAKE THE ECONOMY.
[01:03:07] THEN I'LL REFLECT A BIT ON THE PRACTICE OF FORWARD GUIDANCE AND
[01:03:11] THE INTERACTION BETWEEN THE CENTRAL BANK AND FINANCIAL
[01:03:15] MARKETS. NEXT, I'LL PRESENT SOME OF THE
[01:03:17] KEY PRINCIPLES THAT I BELIEVE SHOULD GUIDE THE CONDUCT OF
[01:03:20] MONETARY POLICY. AND FINALLY, I'LL GIVE YOU MY ASSESSMENT OF WHAT'S HAPPENING
[01:03:24] IN THE ECONOMY. SO FIRST, I THINK WE SHOULD TRY
[01:03:28] TO PREPARE A BIT FOR FUTURE
[01:03:30] POLICY CONJUNCTURE WITH THE
[01:03:34] UNCHANGING PICTURE OF THE TETONS AS OUR BACKDROP.
[01:03:36] WE ARE HERE TO SURVEY AN ECONOMIC LANDSCAPE THAT IS
[01:03:40] ANYTHING BUT STATIC.
[01:03:43] IT WASN'T SO LONG AGO, INCLUDING
[01:03:45] IN ROOMS LIKE THIS, IN THE RUN
[01:03:47] UP TO THE CRISIS OF 2008 AND OVER THE DECADE THAT FOLLOWED,
[01:03:51] WHEN ECONOMISTS AND POLICYMAKERS
[01:03:53] WERE SPEAKING OF SECULAR STAGNATION, SPEAKING OF A GLOBAL
[01:03:57] SAVINGS GLUT.
[01:03:59] IT'S A WIDELY HELD VIEW THAT AN EXCESS OF CAPITAL WOULD SIT ON
[01:04:03] THE SIDELINES FOR A VERY LONG, LONG TIME BECAUSE THERE JUST
[01:04:06] WOULDN'T BE ENOUGH COMPELLING INVESTMENT OPPORTUNITIES.
[01:04:10] ALL THE GOOD STUFF, YOU'LL RECALL, HAD BEEN INVENTED.
[01:04:12] SO GROWTH WOULD BE LOW AND SLOW.
[01:04:16] WELL, I'M SURE HAVE CHANGED.
[01:04:19] WE'VE COME TO A HINGE POINT IN HISTORY.
[01:04:22] TO BORROW A PHRASE, A FRAMING
[01:04:25] FROM MY FORMER MENTOR, GEORGE
[01:04:27] SHULTZ, TO CITE THE CLEAREST
[01:04:29] EXAMPLE, PROGRESS IN A.I., THE
[01:04:32] 80 YEAR OLD NAME FOR THE NEWEST
[01:04:35] TECHNOLOGY HAS BEEN FASTER, EVEN THAN ITS EVANGELISTS PREDICTED.
[01:04:38] JUST A COUPLE OF YEARS AGO.
[01:04:40] THE POTENTIAL FOR SUBSTANTIALLY
[01:04:42] HIGHER GROWTH IS ON THE RISE.
[01:04:44] EVER EXPANDING POOLS OF CAPITAL
[01:04:47] POURING INTO AIR RELATED INFRASTRUCTURE OF ALL SORTS, A
[01:04:51] KIND OF SUPER MOORE'S LAW SEEMS
[01:04:55] TO BE PLAYING OUT. SCALING LAWS TO OR CHANGING BOTH.
[01:04:58] THE METHOD AND SPEED OF
[01:05:01] INNOVATION, CAPITAL AND LABOR HAVE COMBINED TO CREATE LARGE
[01:05:05] LANGUAGE MODELS. AT THE HEART OF A.I. USERS BUY
[01:05:09] TOKENS TO GAIN ACCESS TO THESE
[01:05:11] MODELS, REPORTS PUT ANNUALIZED TOKEN SALES FOR THE TWO LEADING
[01:05:15] LABS ALONE AT MORE THAN $100
[01:05:19] BILLION, AN INCREASE OF 500%
[01:05:22] FROM JUST 12 MONTHS AGO. WE HAVE THE FED.
[01:05:25] WE WATCH ALL THIS ATTENTIVE PLEA.
[01:05:28] WE RECOGNIZE THAT A.I. IS A NEW VARIABLE, POTENTIALLY A NEW
[01:05:34] FACTOR OF PRODUCTION THAT WILL HAVE CONSEQUENCES BOTH FOR THE
[01:05:38] ECONOMY AND FOR THE CONDUCT OF MONETARY POLICY.
[01:05:42] IT OPENS UP SOME MAJOR LINES OF
[01:05:44] INQUIRY WITH THE APPLICATION OF AI CAUSED A SIGNIFICANT
[01:05:48] SUSTAINED RISE IN PRODUCTIVITY ACROSS THE ECONOMY.
[01:05:52] IF SO, WHEN WILL TOKEN USAGE BE
[01:05:57] COMPLEMENTARY OR COMPETITIVE TO LABOR?
[01:06:00] WILL THE NEXT GENERATION OF A.I.
[01:06:03] MODELS DEMAND EVEN GREATER CAPITAL INTENSITY TO OR WILL THE
[01:06:06] MODELS THEMSELVES HELP DEVISE A
[01:06:09] CAPITAL LIGHT SOLUTION?
[01:06:11] AMONG THE OTHER YET UNKNOWNS IS THE RESULTING MARKET STRUCTURE.
[01:06:17] WHO GETS TO MAKE THE MONEY? IT'S NOT OBVIOUS WHEN THE WHERE
[01:06:19] THE RETURNS ON CAPITAL WILL LAND
[01:06:22] OR ON WHAT TIME SCALE.
[01:06:25] EARLY ON, HOW MUCH OF THE SURPLUS GOES TO OWNERS OF SCARCE ASSETS.
[01:06:30] THE AND LABS OR CHIPMAKERS OR
[01:06:32] ENERGY PRODUCERS OR CLOUD PROVIDERS.
[01:06:35] OVER TIME, HOW MUCH OF THAT
[01:06:37] VALUE ACCRUES TO BUSINESSES AND CONSUMERS?
[01:06:41] AND IMPORTANTLY, WHAT ARE THE
[01:06:43] IMPLICATIONS FOR WORKERS AND FOR THE EMPLOYMENT SIDE OF THE FED'S MANDATE?
[01:06:49] LIKEWISE, WE DON'T YET KNOW THE EQUILIBRIUM PRICE OF THE TOKENS
[01:06:52] THAT GIVE ACCESS TO THESE MODELS.
[01:06:54] MIGHT THERE BE A HETEROGENEITY
[01:06:56] OF TOKENS SUCH THAT GROWING SUMS
[01:06:59] WILL BE PAID FOR THE ACCESS TO THE BEST MODELS?
[01:07:03] THOSE AT THE FRONTIER WILL TOKEN
[01:07:06] PRICES FOR OLDER MODELS FALL TO
[01:07:09] THE LEVEL OF THEIR MARGINAL COST
[01:07:11] WELL WILL BE STRENGTHENED THROUGH THESE MATTERS WITH THE
[01:07:15] HELP OF A TASK FORCE ON PRODUCTIVITY AND JOBS.
[01:07:18] MY EARLY CHECK INS WITH THE LEADERS OF THAT TASK FORCE AND
[01:07:21] THE REST HAVE BEEN VERY ENCOURAGING. TO BE CLEAR, THOUGH, THEY'RE
[01:07:26] RECOMMENDING ACTIONS WILL COME LATER AND HAVE NO BEARING ON
[01:07:30] DECISIONS WE MAKE IN THE CURRENT POLICY. CONJUNCTURE.
[01:07:33] BUT I BELIEVE THAT FOR FUTURE POLICY CHALLENGES, THIS
[01:07:37] INTELLECTUAL INVESTMENT TODAY WILL LEAVE US MUCH BETTER
[01:07:41] PREPARED FOR TOMORROW.
[01:07:43] NEXT, LET ME SAY A WORD ABOUT FORWARD GUIDANCE AND ITS
[01:07:49] SUBSTITUTES AS OUR TASK FORCES GO ABOUT THEIR WORK.
[01:07:51] AS YOU MIGHT KNOW, I'M NOT
[01:07:54] WAITING TO INTRODUCE INNOVATIONS
[01:07:56] AT THE FED TO HELP MAKE US FIT FOR PURPOSE.
[01:08:00] TO HIGHLIGHT ONE EXAMPLE, I'VE SET OUT TO CHANGE THE FORM AND
[01:08:04] FUNCTION OF THE FED CHAIRMAN,
[01:08:06] SO-CALLED FORWARD GUIDANCE. YOU MIGHT KNOW ABOUT MY LONG
[01:08:10] TIME DISCOMFORT WITH EARLY
[01:08:12] PRONOUNCEMENTS OF FUTURE POLICY DECISIONS.
[01:08:15] I MUCH PREFER ANOTHER PATH AND
[01:08:17] THAT WILL MAKE THE CASE FOR IT.
[01:08:21] TRANSPARENCY AND COMMUNICATION
[01:08:24] IS ABOUT FUTURE POLICY DECISIONS.
[01:08:26] IT'S NOT AN END UNTO ITSELF.
[01:08:28] COMMUNICATIONS MUST BE IN
[01:08:30] SERVICE TO THE FED'S PARAMOUNT RESPONSIBILITY.
[01:08:34] WHAT IS THAT? THAT'S GETTING POLICY RIGHT.
[01:08:38] FORWARD GUIDANCE AS A REGULAR
[01:08:40] PRACTICE WAS ADOPTED BY MY COLLEAGUES AND ME DURING THE
[01:08:44] GLOBAL FINANCIAL CRISIS. IT WAS ESSENTIAL AT THE TIME AND
[01:08:48] WE INTRODUCED IT WITH MUCH FANFARE.
[01:08:50] BUT AS WITH OTHER LEGACIES OF
[01:08:53] CRISES PAST, I BELIEVE THE
[01:08:57] PRACTICE HAS OUTSTAYED ITS WELCOME.
[01:08:59] IN NORMAL TIMES, THE ROLE OF FORWARD GUIDANCE SHOULD BE
[01:09:03] LIMITED AND CIRCUMSCRIBED.
[01:09:05] OTHERWISE, IT RISKS CREATING
[01:09:07] AMBIGUITY IN THE NAME OF CLARITY.
[01:09:11] OVERSHARING, POLICY DELIBERATION AND OVERCOMMITTING.
[01:09:15] SO FUTURE DECISIONS CAN LEAD
[01:09:17] MARKETS, BUSINESSES AND HOUSEHOLDS ASTRAY.
[01:09:21] AND I BELIEVE WHEN POLICYMAKERS
[01:09:23] MAKE QUASI COMMITMENTS ON INTEREST RATES THROUGHOUT THE
[01:09:27] CYCLE, WE INHIBIT OUR OWN
[01:09:30] FREEDOM TO MAKE THE RIGHT CALLS.
[01:09:32] WHEN IT'S TIME TO DECIDE. TO GET POLICY RIGHT, WE ALSO
[01:09:36] NEED TO GET THE RELATIONSHIP RIGHT BETWEEN THE CENTRAL BANK
[01:09:40] AND FINANCIAL MARKETS.
[01:09:42] THE MARKETS, THE EXCUSE ME, THE
[01:09:44] FED NEEDS CLEAR MARKET SIGNALS
[01:09:46] AS UNFILTERED AS POSSIBLE FROM
[01:09:48] MARKET INTERNALS, FROM THE LEVEL
[01:09:52] AND CHANGE IN ASSET PRICES ACROSS SECTORS.
[01:09:56] THE PRICES AND TRADING VOLUMES
[01:09:57] OF TREASURY SECURITIES, THE
[01:10:01] FOREIGN EXCHANGE VALUE OF THE DOLLAR, THE COST AND
[01:10:05] AVAILABILITY OF CREDIT ABROAD,
[01:10:07] SET OF COMMODITY PRICES.
[01:10:09] THESE AND OTHER INDICATORS SHOULD INFORM THE FED'S
[01:10:12] NEAR-TERM OUTLOOK ON ECONOMIC
[01:10:16] ACTIVITY AND INFLATION THROUGHOUT THE BUSINESS CYCLE.
[01:10:19] IT SHOULD ALSO REVEAL THE STATE
[01:10:21] OF BROADER FINANCIAL CONDITIONS
[01:10:24] AND THE RISKS AND UNCERTAINTIES
[01:10:26] OF THE FINANCIAL CYCLE.
[01:10:29] AT THE SAME TIME, MARKET
[01:10:32] PARTICIPANTS THEMSELVES SHOULD
[01:10:34] BE TRACKING REAL INFORMATION ABOUT THE REAL ECONOMY.
[01:10:38] THEY SHOULD DRAW THEIR OWN CONCLUSIONS, FORM THEIR OWN
[01:10:42] EXPECTATIONS ON THINGS LIKE OUTPUT AND EMPLOYMENT AND
[01:10:46] INFLATION. AND THEY TOO SHOULD STAY SHARPLY
[01:10:49] ATTUNED TO RISKS.
[01:10:50] IN MY VIEW, THE FED SHOULD BE
[01:10:53] HUMBLE AND NEVER NAIVE.
[01:10:55] THE FED PLAYS AN ESSENTIAL ROLE
[01:10:57] IN THE ECONOMY AND MARKETS.
[01:10:59] OUR TOOLS ARE POWERFUL.
[01:11:01] WE DETERMINE THE PATH OF SHORT TERM INTEREST RATES.
[01:11:05] AND MARKET PARTICIPANTS WILL
[01:11:08] ALWAYS TRY TO ANTICIPATE WHAT WE WILL DO NEXT.
[01:11:12] BUT WE SHOULD NOT INDULGE A
[01:11:16] REGIME IN WHICH MARKET PARTICIPANTS ARE LOOKING
[01:11:18] PRIMARILY TO THE FED FOR THEIR NEXT TRADE.
[01:11:23] THE ECONOMIC LITERATURE HAS LONG
[01:11:24] DESCRIBED THE DISTORTING
[01:11:28] EFFECTS, WHAT IT CALLED THE HALL OF MIRRORS PROBLEM.
[01:11:30] IF MARKETS RELY MATERIALLY ON
[01:11:32] THE FED'S GUIDANCE AND THE FED
[01:11:36] RELIES ON MARKET PRICES, WE'RE
[01:11:38] MORE LIKELY TO BE BLINDED TO NEW
[01:11:42] DEVELOPMENTS, MORE LIKELY TO BE CAUGHT UNPREPARED, SERVED, AND
[01:11:45] MORE LIKELY TO COMMIT ERRORS IN POLICYMAKING.
[01:11:49] NOW, PERVERSELY, MARKET
[01:11:53] PARTICIPANTS ARE UNLIKELY TO BEAR THE BIGGEST COSTS OF THE
[01:11:55] HALL OF MIRRORS PROBLEM. MOST SERIOUS HARM IS LIKELY TO
[01:11:59] BEFALL THOSE WITHOUT ANY
[01:12:02] FINANCIAL ASSETS. IF THE FED GETS INFLATION WRONG
[01:12:06] AND JUDGES THE ECONOMY WRONG
[01:12:08] GETS THE WORST OF IT, NOT THE
[01:12:12] FINANCIAL HIGH FLIERS HARD, HARDWORKING AMERICANS ARE THE
[01:12:15] ONES LEFT TO DEAL WITH INFLATION THAT'S TOO HIGH, OR JOBS THAT
[01:12:18] SUDDENLY APPEAR LESS SECURE.
[01:12:22] SO IF FORWARD GUIDANCE IS ILL
[01:12:25] SUITED TO NORMAL TIMES, HOW
[01:12:26] ABOUT THE NEW FED CHIEF COMMITS
[01:12:29] AT A MEETING JUST LIKE THIS TO
[01:12:31] SOME EXPLICIT REACTION FUNCTION?
[01:12:33] SURELY HE COULD TELL US HIS INTEREST RATE PATH IF, SAY, THE
[01:12:37] DATA WERE TO COME IN HOT OR COLD?
[01:12:41] WELL, I WISH OUR UNDERSTANDING
[01:12:43] OF THE ECONOMY WERE SO PRECISE
[01:12:45] AS TO PROVIDE A MECHANICAL TRIED AND TRUE ANSWER.
[01:12:49] THAT'S SOME SIMPLE FUNCTION,
[01:12:52] LIKE A TAYLOR RULE COULD BE RIGOROUSLY RELIED UPON.
[01:12:56] BUT OUR KNOWLEDGE JUST DOES NOT EXTEND THAT FAR.
[01:12:59] AT LEAST NOT YET.
[01:13:01] AND OTHER FACTORS MOST RELEVANT TO THE PROPER CONDUCT OF
[01:13:05] MONETARY POLICY.
[01:13:06] THEY CHANGE OVER TIME, PROVIDING
[01:13:10] FORECASTS TO ILLUSTRATE THE FED'S REACTION FUNCTION WORKS
[01:13:13] BETTER IN THEORY THAN IN PRACTICE.
[01:13:17] BETTER IN THE LAB THAN IN THE FIELD.
[01:13:20] I AM NOT ALONE IN NOTICING THAT FORWARD GUIDANCE IN 2021.
[01:13:24] TO CITE JUST ONE EXAMPLE MIGHT
[01:13:28] WELL HAVE SLOWED THE POLICY
[01:13:30] RESPONSE TO HIGH INFLATION. IN MY TERM AS CHAIRMAN, MY
[01:13:34] COLLEAGUES AND I WILL ENDEAVOR TO CONSTRUCT MORE RELIABLE
[01:13:38] MODELS, MORE ROBUST RULES, AND
[01:13:40] WILL DO THIS KNOWING THAT
[01:13:42] ACCURACY IN FORECASTING IS STILL
[01:13:44] JUST AN ASPIRATION.
[01:13:46] WITH SO MUCH CHANGING SO FAST IN
[01:13:49] OUR GEO POLITICS, GLOBAL SUPPLY
[01:13:52] CHAINS, TECHNOLOGY, IT'S WISE TO
[01:13:55] BE MODEST ABOUT WHAT WE CAN AND
[01:13:57] CANNOT KNOW AS WE SIT HERE TODAY.
[01:14:00] IN THE SAME SPIRIT, WE SHOULD
[01:14:02] RECEIVE THE FULL RANGE OF IDEAS
[01:14:04] ON MATTERS THAT MAY INFORM THE FED'S MONETARY POLICY
[01:14:08] DISCUSSIONS. IF THE AIM IS OPTIMAL DECISION
[01:14:12] MAKING AND IT SHOULD BE, WE
[01:14:14] SHOULD NOT CROWD OUT VIEWS ON THE ECONOMY.
[01:14:18] HOW THEN, TO CHART A BETTER PATH
[01:14:20] TO POLICY IN THE BALANCE OF MY REMARKS?
[01:14:24] I WILL SHARE WITH YOU SOME KEY PRINCIPLES THAT GUIDE MY
[01:14:27] THINKING ON THE APPROPRIATE CONDUCT OF MONETARY POLICY.
[01:14:31] AND THEN I'LL OFFER MY PROMISE ASSESSMENT OF THE ECONOMY.
[01:14:36] SO LET'S TURN FIRST TO PRINCIPLES.
[01:14:39] FIRST, I'VE NOTICED IN THIS LINE
[01:14:41] OF WORK, YESTERDAY'S NEWS HAS A
[01:14:44] WAY OF GETTING MISTAKEN FOR WHAT'S HAPPENING RIGHT NOW.
[01:14:48] THE CHALLENGE IS TO KNOW THE DIFFERENCE.
[01:14:50] IN OTHER WORDS, WE MUST
[01:14:52] INTERROGATE REALITY, MAKE SURE
[01:14:56] WE'RE NOT SETTING FORWARD
[01:14:57] LOOKING POLICY BASED ON STALE OR
[01:15:01] INACCURATE DATA.
[01:15:03] NOR SHOULD WE RELY ON ISOLÉ TWO
[01:15:06] DATA POINTS TRENDS MATTER MOST.
[01:15:09] THE FED'S DECISION MAKING AGENCY.
[01:15:12] WE MAKE CHOICES AMID UNCERTAINTY AND THE DATA UPON WHICH WE DRAW
[01:15:16] MUST BE RELEVANT,
[01:15:20] CONTEMPORANEOUS, ACCURATE AND AS
[01:15:22] ACTIONABLE AS POSSIBLE.
[01:15:26] SECOND PRINCIPLE THE FED'S ACTIONS ARE INTENDED TO ENSURE
[01:15:29] THAT THE AGGREGATE DEMAND SIDE OF THE ECONOMY IS BROADLY
[01:15:33] CONSISTENT WITH AGGREGATES SUPPLY.
[01:15:37] HOWEVER, ALL WE OBSERVE DIRECTLY IS ACTIVITY.
[01:15:39] WE NEVER SEE AND CAN ONLY INFER
[01:15:43] WHAT'S REALLY HAPPENING ON THE SUPPLY SIDE.
[01:15:47] HENCE, EVALUATING THE CURRENT AND EXPECTED BALANCE BETWEEN
[01:15:52] AGGREGATE SUPPLY AND AGGREGATE
[01:15:52] DEMAND IS IMPRECISE.
[01:15:57] THIRD PRINCIPLE THERE SHOULD BE
[01:15:59] NO MISUNDERSTANDING THE FED'S
[01:16:01] PRICE STABILITY OBJECTIVE OF 2%,
[01:16:04] AS MEASURED BY THE PC PRICE
[01:16:08] INDEX, IS A FIRM FIXED TARGET
[01:16:10] THAT MAY BE EQUALLY CLEAR ABOUT
[01:16:13] ANOTHER ASPECT OF THIS
[01:16:15] SUBJECTIVE PRICE STABILITY IS
[01:16:17] NOT SELF-EXECUTING, NOR IS
[01:16:21] INFLATION NECESSARILY MEAN REVERTING.
[01:16:24] IT'S THE FED'S JOB TO DELIVER STABLE PRICES.
[01:16:28] NO EXCUSES. FOURTH PRINCIPLE.
[01:16:31] THE FED ALSO BEARS RESPONSIBILITY FOR MAXIMUM
[01:16:36] EMPLOYMENT, ACHIEVING BOTH SIDES OF OUR MANDATE OVER THE MEDIUM
[01:16:39] TERM IS NOT AN EITHER OR PROPOSITION.
[01:16:42] I DO NOT BELIEVE THE FED'S DUAL
[01:16:45] MANDATE WORKS ACROSS PURPOSES.
[01:16:47] AFTER ALL, HIGH INFLATION ITSELF
[01:16:51] IS VERY HARMFUL TO ECONOMIC PROSPERITY.
[01:16:55] FIFTH PRINCIPLE SHORT TERM INTEREST RATES ARE THE
[01:17:00] PREDOMINANT TOOL TO ACHIEVE THE DUAL MANDATE.
[01:17:04] UNCONVENTIONAL POLICIES TO SPUR ECONOMIC ACTIVITY MAY SUIT
[01:17:07] GENUINE CRISES, OF WHICH WE ALL
[01:17:10] HAVE MUCH EXPERIENCE. BUT THEY SHOULD OTHERWISE BE
[01:17:14] USED SPARINGLY, IF AT ALL.
[01:17:18] SIXTH, MONEY MATTERS.
[01:17:21] I KNOW IT'S NOT FASHIONABLE
[01:17:24] THESE DAYS, BUT MY VIEW IS THAT
[01:17:26] MONEY HAS SOMETHING IMPORTANT TO
[01:17:28] DO WITH MONETARY POLICY.
[01:17:30] WE SHOULD PAY ATTENTION TO MONEY
[01:17:33] CREATED BY THE CENTRAL BANK AND
[01:17:35] MONEY THAT COMES FROM THE
[01:17:37] BANKING AND FINANCIAL SYSTEM.
[01:17:39] IT'S TRUE THAT FINANCIAL
[01:17:41] INNOVATIONS SUBJECT OF THIS
[01:17:44] CONFERENCE AND OTHER FACTORS
[01:17:46] ALTER THE MECHANICS THAT LINK
[01:17:48] THE MONETARY BASE, THE VELOCITY
[01:17:50] OF MONEY AND THE BROADER ECONOMY.
[01:17:53] BUT THAT IS SCARCELY A REASON TO
[01:17:55] IGNORE THE ULTIMATE EFFECTS OF
[01:17:57] MONEY ON FINANCIAL CONDITIONS AND PRICES.
[01:18:02] FINALLY, A QUIETER FED, A MORE
[01:18:07] PURPOSEFUL FED IN ITS COMMUNICATIONS IS BETTER ABLE TO
[01:18:11] MEET ITS OBJECTIVES, AND WE CAN
[01:18:13] BE HELD ACCOUNTABLE FOR DELIVERING ON OUR REMIT.
[01:18:17] THE ONLY TRUE TEST OF OUR
[01:18:20] CREDIBILITY, TO BORROW A LINE FROM GENERAL CHUCK YEAGER AT THE
[01:18:23] MOMENT OF TRUTH. THERE ARE EITHER REASONS OR
[01:18:28] RESULTS. SO HAVING HEARD A LITTLE BIT ABOUT A.I. AND GENERAL PURPOSE
[01:18:33] TECHNOLOGIES, HAVING HEARD A LITTLE BIT ABOUT THE NEXT POLICY
[01:18:36] CONJUNCTURE, LITTLE BIT ON
[01:18:38] PRINCIPLES, LET'S TURN TO THE ECONOMY TODAY.
[01:18:42] GIVEN THOSE PRINCIPLES, HOW DO I READ THE ECONOMY?
[01:18:46] WHAT'S REALLY GOING ON OUTSIDE THE WINDOW?
[01:18:48] IT'S A LITTLE IRONIC. THERE ARE NO WINDOWS IN THIS
[01:18:51] ROOM, BUT BUT THEY'RE BIG ONES
[01:18:54] THAT THE FEDERAL RESERVE AND
[01:18:56] WE'VE BEEN USING THOSE IN MY FIRST HUNDRED DAYS.
[01:19:00] AND I EXPECT WE'RE GOING TO CONTINUE TO USE THOSE IN THE
[01:19:04] PERIOD RIGHT AHEAD OF US. NOW, YOU MAY HAVE READ IN THE
[01:19:06] JULY MINUTES THE UNANIMOUS VIEW
[01:19:09] OF THE FOMC.
[01:19:11] LABOR MARKETS WERE STABLE.
[01:19:13] OUTPUT SOLID, BUT INFLATION REMAINED TOO HIGH.
[01:19:17] A GOOD MAJORITY OF MY COLLEAGUES AND I THOUGHT THE WISER COURSE
[01:19:21] WAS TO AWAIT NEW INFORMATION IN
[01:19:24] THE INTERMEETING PERIOD,
[01:19:25] ESPECIALLY GIVEN POSSIBLE DEVELOPMENTS IN SUPPLY CHAINS.
[01:19:30] INVESTOR FLOWS AND GEOPOLITICS
[01:19:32] BEFORE DECIDING WHETHER CHANGE IN INTEREST RATE POLICY WAS
[01:19:37] ADVISABLE. AND WE EXPRESSED OUR JOINT
[01:19:39] READINESS TO ACT AS
[01:19:42] CIRCUMSTANCES EXCUSE ME, REQUIRE.
[01:19:45] FOR MY PART TODAY, AS WE SIT
[01:19:48] HERE, I'M IMPRESSED BY THE OVERALL PERFORMANCE OF THE
[01:19:51] ECONOMY, WHICH APPEARS TO HAVE STRENGTHENED.
[01:19:55] ONE INDICATOR OF STRENGTH IS HOW WELL AN ECONOMY HOLDS UP UNDER
[01:19:59] STRESS, HOW WELL IT HOLDS UP UNDER SHOCKS.
[01:20:01] ON THAT SCORE, BOTH MAIN STREET
[01:20:05] AND WALL STREET HAVE BEEN REMARKABLY RESILIENT.
[01:20:07] SEVERAL OTHER OBSERVATIONS.
[01:20:11] BUSINESS CAPEX IS RISING RAPIDLY.
[01:20:15] THE FOURTH QUARTER CHANGE AND INVESTMENT IN EQUIPMENT AND
[01:20:18] INTANGIBLES HAS BEEN AROUND 9%.
[01:20:20] ITS HIGHEST GROWTH RATE SINCE
[01:20:23] 2021, AND MORE THAN HALF OF THE
[01:20:25] CAPEX GROWTH LIKELY BE ASCRIBED
[01:20:27] TO THE BUILDOUT RELATED TO A.I.
[01:20:31] WHAT ABOUT PROFITS FOR THE FIRMS
[01:20:33] IN THE S&P? PROFITS HAVE GROWN MORE THAN 20%
[01:20:37] OVER THE PAST YEAR ALONE. PROFIT MARGINS ARE QUITE
[01:20:41] ELEVATED RELATIVE TO HISTORY.
[01:20:43] OVERALL EQUITY MARKET VOLATILITY BE QUITE LOW.
[01:20:48] WE'RE STAYING KEENLY FOCUSED ON MARKET INTERNALS, WATCHING
[01:20:52] PERFORMANCE ACROSS SECTORS.
[01:20:54] EXPECTATIONS FOR BOTH GROWTH AND CAPEX AND CORPORATE EARNINGS ARE
[01:20:57] RUNNING QUITE HIGH. I CONTINUE TO WATCH THE CHANGE
[01:21:01] IN THE GROWTH RATES. SECOND DERIVATIVE, THE FOLLOW ON
[01:21:06] EFFECTS ON ASSET PRICES, BUSINESS CONFIDENCE, CONSUMER
[01:21:08] INCOMES AND SPENDING ARE EQUALLY
[01:21:11] IMPORTANT TO GAUGE CREDIT
[01:21:15] SPREADS ON CORPORATE BONDS AND LEVERAGED LOANS ARE NEAR THE LOW
[01:21:17] END OF THEIR HISTORICAL AVERAGES.
[01:21:20] IN ISSUE VOLUMES THIS YEAR QUITE
[01:21:24] STRONG. LOOKING BEYOND FIXED INCOME
[01:21:26] MARKETS TO THE BANKING BUSINESS IN THE JULY SO-CALLED SLEW
[01:21:30] SURVEY, BANKS TELL US THAT STANDARDS FOR CNI LOANS ON THE
[01:21:34] EASIER END OF THEIR HISTORICAL
[01:21:38] RANGES HELPS EXPLAIN THEIR GROWTH. THAT WE'VE SEEN THIS YEAR ON
[01:21:41] THESE LOANS. IN MY VIEW, CREDIT AND LOAN
[01:21:45] MARKETS ARE SHOWING FEW SIGNS OF POLICY RESTRAINT.
[01:21:49] NOW, CERTAIN SECTORS LIKE HOUSING AND AGRICULTURE ARE
[01:21:51] SHOWING STRAINS.
[01:21:53] BUT ON BALANCE, I WOULD BE HARD
[01:21:56] PRESSED TO DESCRIBE BROAD FINANCIAL CONDITIONS AS
[01:22:01] RESTRICTIVE. REAL CONSUMER SPENDING HAS BEEN HEALTHY DESPITE THESE SHOCKS.
[01:22:06] INCREASE IN MORE THAN 2% OVER THE PAST FOUR QUARTERS. IF YOU COMBINE CONSUMPTION WITH
[01:22:10] A BRISK INVESTMENT, AS WE TALKED
[01:22:12] ABOUT EARLIER, PRIVATE DOMESTIC FINANCIAL PURCHASES HAVE ALSO
[01:22:16] RISEN. THESE PURCHASES HAVE INCREASED
[01:22:19] TO THE PACE OF NEARLY 3% OR SO SO FAR THIS YEAR.
[01:22:23] THAT'S A MEASURE THAT TYPICALLY
[01:22:25] CAROLS MORE SIGNAL THAN GDP.
[01:22:27] THE TREND HERE TO PUZZLE LIVE.
[01:22:30] SO ON THE EMPLOYMENT SIDE OF THE
[01:22:32] FED'S DUAL MANDATE, A COUNTRIES
[01:22:34] DOING WELL, LABOR MARKETS ARE QUITE STABLE.
[01:22:38] THE JOBLESS RATE AT 4.1% REMAINS
[01:22:41] LOW BY HISTORICAL STANDARDS AND
[01:22:43] HASN'T CHANGED MUCH IN A COUPLE OF YEARS.
[01:22:47] UNEMPLOYMENT CLAIMS ON A FOUR WEEK MOVING AVERAGE, AN
[01:22:50] EMPIRICALLY ROBUST REAL TIME
[01:22:53] INDICATOR, ARE NEAR THEIR LOWEST LEVEL IN DECADES.
[01:22:56] IN MY VIEW, THE RELATIVELY LOW
[01:22:59] TURNOVER IN TODAY'S LABOR MARKET IS PARTLY A RESULT OF THE
[01:23:03] SIGNIFICANT REMATCH BETWEEN EMPLOYERS AND EMPLOYEES THAT
[01:23:07] HAPPENED AFTER THE POST.
[01:23:09] IN THE POST-PANDEMIC ENVIRONMENT.
[01:23:11] BUT WHEN LABOR SUPPLY IS BARELY GROWING MONTHLY JOB GAINS ARE
[01:23:15] NATURALLY GOING TO RUN LOW.
[01:23:19] THEY'RE ALWAYS AREA OF CONCERNS IN THE LABOR MARKET. FOR EXAMPLE, AMONG RECENT
[01:23:23] GRADUATES IN GENERAL, THOUGH, PEOPLE WANT TO WORK, BY AND
[01:23:27] LARGE, ARE HOLDING OR FINDING JOBS.
[01:23:30] THEY MAY WELL BE CONCERNED ABOUT
[01:23:33] FUTURE LABOR DISRUPTIONS. BUT AS OF NOW, I BELIEVE THE
[01:23:37] LABOR MARKETS ARE BROADLY
[01:23:39] CONSISTENT WITH FULL EMPLOYMENT.
[01:23:41] BUT ON THE PRICE STABILITY SIDE
[01:23:43] OF OUR MANDATE, THE NUMBERS ARE MORE CONCERNING.
[01:23:47] THE FED'S PREFERRED MEASURE OF INFLATION, WHEN I TALKED ABOUT
[01:23:51] EARLIER, THE 12 MONTH CHANGE IN
[01:23:52] THE PC PRICE INDEX STANDS AT
[01:23:56] 3.7%. THE SIX MONTH CHANGE A LITTLE
[01:24:00] ABOVE FOR THE COMPARABLE MEASURES FROM THE CPI INDEX ARE
[01:24:04] ALSO ELEVATED AS OUR CORE MEASURES BOTH A PC AND CPI
[01:24:08] INFLATION. NONE OF THESE MEASURES ARE
[01:24:11] PERFECT, BUT THEY ALL TELL A SIMILAR STORY.
[01:24:14] INFLATION IS RUNNING ABOVE OUR 2% TARGET.
[01:24:17] THE FED'S PREDOMINANT FOCUS
[01:24:21] RIGHT NOW SHOULD BE ON PRICES.
[01:24:25] SO WHAT'S OUR JOB? THE JOB FOR POLICYMAKERS IS TO
[01:24:29] CAPTURE UNDERLYING TREND INFLATION.
[01:24:32] EASIER SAID THAN DONE. WE WANT TO GAUGE WHETHER
[01:24:36] UNDERLYING INFLATION IS RISING
[01:24:38] OR FALLING OR SEEMS TO BE STUCK IN PLACE.
[01:24:42] WE ALSO WANT TO UNDERSTAND NOT JUST THE DIRECTION OF TRAVEL,
[01:24:46] BUT THE SPEED. EACH OF THESE BROAD INFLATION
[01:24:48] MEASURES HAVE FALLEN SIGNIFICANTLY FROM THEIR HIGHS
[01:24:52] OF A FEW YEARS AGO. BUT PROGRESS OF THE LAST COUPLE
[01:24:55] OF YEARS HAS BEEN MORE MODEST.
[01:24:57] AND WHILE THIS SUMMER'S PC AND
[01:24:59] CPI READINGS WERE BETTER THAN EXPECTED, THEY DO NOT TELL ME
[01:25:04] THAT UNDERLYING TRENDS HAVE
[01:25:06] MEANINGFULLY IMPROVED. THE DATA ALSO SHOW MODERATE WAGE
[01:25:10] GROWTH. BUT IN MY VIEW, TRACKING
[01:25:12] UNDERLYING INFLATION WAGE GROWTH
[01:25:15] HAS NOT PROVEN A RELIABLE
[01:25:17] INDICATOR OF FUTURE INFLATION FOR A VERY LONG TIME.
[01:25:22] SO TO TRY TO GAUGE UNDERLYING
[01:25:25] INFLATION, I WANT TO TELL YOU ABOUT A COUPLE OF THINGS. I'VE ALWAYS LOOKED TO.
[01:25:29] I FIND IT INSTRUCTIVE TO DISAGREE RELEGATE THE HUNDRED
[01:25:33] AND 99 INDIVIDUAL COMPONENTS OF
[01:25:35] THE PC PRICE MEASURE OVER THE
[01:25:38] LAST 12 MONTHS, 5,454% OF GOODS
[01:25:41] AND SERVICES IN THE BASKET
[01:25:43] SHOWED PRICE INCREASES ABOVE 3%.
[01:25:46] THIS IS WELL BELOW THE
[01:25:49] POST-PANDEMIC HIGHS OF ABOUT 77%. BUT IT REMAINS WELL ABOVE THE
[01:25:54] LEVEL OF THREE TWO IN A COUPLE OF THE DECADES THAT PRECEDED THE
[01:25:58] PANDEMIC. LOOKING OVER JUST THE LAST SIX MONTHS, THE CONCLUSION IS
[01:26:02] SIMILAR. 49% OF GOODS AND SERVICES IN THE
[01:26:05] PC BASKET SHOWED PRICE INCREASES ABOVE 3%.
[01:26:09] AND THIS IS WELL BELOW THE POST-PANDEMIC HIGHS, BUT STILL
[01:26:13] ELEVATED QUITE ELEVATED.
[01:26:17] THE RECENT RISE IN OVERALL COMMODITY PRICES ALSO BEARS
[01:26:21] WATCHING. WHAT WE NEED TO JUDGE IS WHETHER
[01:26:23] THE TRENDS WE SEE INDICATE
[01:26:25] UPSIDE INFLATION RISKS.
[01:26:29] NOW IT MATTERS TO WHETHER THE INFLATION READINGS OF THE PAST
[01:26:33] FIVE YEARS HAVE SEEPED INTO EXPECTATION RATES.
[01:26:36] THE GOOD NEWS IS THAT MEASURES
[01:26:38] OF INFLATION EXPECTATION IN THE
[01:26:41] MEDIUM TERM BUY BY AND LARGE
[01:26:43] LOOK STABLE AND INFLATION
[01:26:47] COMPENSATION MEASURES FROM THE SWAPS MARKET SEND A STRONG AND
[01:26:51] SIMILAR MESSAGE, ESPECIALLY IN
[01:26:53] LIGHT OF RECENT DEVELOPMENTS.
[01:26:55] IT'S A CREDIT TO THE FED AS AN
[01:26:59] INSTITUTION CONSISTENT WITH THE BEST OF THE FED'S TRADITIONS
[01:27:03] THAT MARKET PRICES SHOW CONFIDENCE THAT WE WILL DELIVER
[01:27:07] PRICE STABILITY. AND I CAN ASSURE YOU THEY'RE
[01:27:12] RIGHT. THE THING ABOUT MARKET MEASURES OF INFLATION EXPECTATIONS IN
[01:27:16] ECONOMIC HISTORY, I KNOW SOME ECONOMIC HISTORIANS IN THE
[01:27:20] AUDIENCE, AS THEY ALL TEND TO LOOK REALLY STRONG AND DURABLE
[01:27:23] UNTIL THEY DON'T.
[01:27:24] THESE EXPECTATIONS ARE NOT
[01:27:27] PUSHED AROUND EASILY.
[01:27:29] AND RIGHT NOW THEY ARE VERY WELL ANCHORED, BUT THEY MUST BE
[01:27:33] CLOSELY MINDED. AND IT'S THE FED'S JOB TO MAKE
[01:27:36] SURE THAT INFLATION EXPECTATIONS
[01:27:38] DO NOT GET UNANCHORED. NOW, THERE IS ONE SIGNAL NOBODY
[01:27:42] CAN MISS.
[01:27:44] RESPONSIBILITY FOR 65 MONTHS OF
[01:27:49] SUSTAINED, ELEVATED INFLATION, SAID SQUARELY WITH THE CENTRAL BANK.
[01:27:53] AND THAT'S WHERE IT BELONGS. SO HERE IS MY STANDARD.
[01:27:57] WE MUST BE CONFIDENT THAT UNDERLYING INFLATION IS MOVING
[01:28:01] TO OUR OBJECTIVE CLEARLY, AND
[01:28:03] THAT SUFFICIENT SPEED OTHERWISE,
[01:28:07] WE HAVE WORK TO DO. THAT'S OUR JOB.
[01:28:09] THAT'S OUR MANDATE.
[01:28:12] AND THAT'S OUR CHARGE TO KEEP. SO I'VE COVERED QUITE A BIT OF
[01:28:16] GROUND IN THE LAST 25 MINUTES OR SO. LET ME SEE IF I CAN CONCLUDE
[01:28:20] THIS WAY. I STAND HERE TODAY COMMITTED TO
[01:28:23] A MODEST PLAN, NOT A DECISION BY
[01:28:29] FED COLLEAGUES. AND I ARE HARDLY THE FIRST TO HOLD THESE POSITIONS IN A TIME
[01:28:33] OF GREAT CONSEQUENCE. WE ARE DETERMINED TO REDEEM THE
[01:28:38] TIME BY DOING OUR VERY BEST WORK.
[01:28:41] BUT THOSE OF US, THOSE OF YOU THAT KNOW US, YOU'LL KNOW THE
[01:28:45] FOLLOWING IS TRUE.
[01:28:46] WE TAKE OUR RESPONSIBILITY
[01:28:49] SERIOUSLY WITH HUMILITY AND WITH
[01:28:53] RESOLVE. WE KNOW SO MUCH DEPENDS ON THE
[01:28:56] CHOICES WE MAKE. SOUND MONETARY POLICY HELPS
[01:29:00] HOUSEHOLDS AND BUSINESSES TO PROSPER.
[01:29:02] WHEN CARRIED OUT EFFECTIVELY, IT
[01:29:06] BROADENS AND DEEPENS THE MOMENTUM OF OUR ECONOMY AND
[01:29:09] HELPS TO SECURE AMERICA'S LEADERSHIP IN THE WORLD.
[01:29:13] AND I KNOW THAT OUR COUNTRY NEEDS US TO THINK CAREFULLY AND
[01:29:17] ACT WISELY.
[01:29:18] PERHAPS NOW MORE THAN EVER, IT'S
[01:29:22] A TREMENDOUS HONOR TO SERVE ONCE AGAIN AT THE FEDERAL RESERVE.
[01:29:24] I'M TRULY GRATEFUL FOR THE ENCOURAGEMENT.
[01:29:27] GOOD COUNSEL AND THE WARM RECEPTION I RECEIVED IN MY FIRST
[01:29:31] HUNDRED DAYS FROM MY COLLEAGUES.
[01:29:33] I'M ALSO HONORED AND GRATEFUL FOR THE VIEWS THAT I'VE GOTTEN
[01:29:37] SOLICITED UNSOLICITED FROM SO
[01:29:40] MANY OF YOU IN THIS ROOM FOR
[01:29:43] THAT AND FOR YOUR KIND ATTENTION THIS MORNING. I SAY THANK YOU.
[01:29:47] LET'S GET ON WITH THE REST OF THE PROGRAM.
[01:30:02] YOU'RE WATCHING C-SPAN THREE.
[01:30:04] DEMOCRACY ON FILTER.
[01:30:11] START YOUR DAY WITH WASHINGTON JOURNAL.
[01:30:15] YOUR WINDOW INTO THE NATION'S CAPITOL. THE ONLY NATIONALLY TELEVISED
[01:30:19] FORUM WE'RE DISCUSSING THE LATEST ISSUES IN WASHINGTON AND
[01:30:22] ACROSS THE COUNTRY. IT GIVES THE PEOPLE AN OPPORTUNITY TO SPEAK FOR
[01:30:26] THEMSELVES ON THE ISSUES THAT THEY ACTUALLY CARE ABOUT. THIS IS A GREAT FORUM AND YOU
[01:30:30] GET TO TALK TO REAL AMERICANS AND LOOK FORWARD TO THE CALLERS HAVE ALWAYS ENJOYED DOING THE
[01:30:34] PROGRAM. AND I WOULD BE REMISS AS MY FIRST TIME EVER ON C-SPAN IF I
[01:30:36] DIDN'T SAY THAT, I THINK AND ALL YOUR CALLERS.
[01:30:40] OUR COUNTRY WOULD BE A BETTER PLACE IF EVERY AMERICAN JUST
[01:30:43] WATCHED ONE HOUR A WEEK, THEY COULD PICK ONE, 2 OR 3.
[01:30:46] JOIN US FOR A LIVE THREE HOUR CONVERSATION WITH A VARIETY OF
[01:30:51] CONGRESSIONAL MEMBERS AND WASHINGTON INFLUENCERS.
[01:30:54] YOU CAN WATCH WASHINGTON JOURNAL
[01:30:56] LIVE EVERY MORNING AT 7 A.M.
[01:30:58] EASTERN ON C-SPAN, C-SPAN NOW OR
[01:31:02] ONLINE AT C-SPAN DOT ORG.
[01:31:09] TUESDAY LIVE AT 9 A.M. EASTERN
[01:31:12] ON C-SPAN, THREE. THE SENATE JUDICIARY COMMITTEE HEARS FROM FBI DIRECTOR KASH
[01:31:17] PATEL DURING A HEARING ON OVERSIGHT OF THE FEDERAL BUREAU OF INVESTIGATION.
[01:31:22] WATCH IT LIVE TUESDAY MORNING AT NINE EASTERN ON C-SPAN THREE.
[01:31:24] C-SPAN NOW OUR FREE MOBILE VIDEO
[01:31:26] APP, OR ONLINE AT C-SPAN DOT ORG.
[01:31:30] BEST IDEAS AND BEST PRACTICES CAN BE FOUND ANYWHERE.
[01:31:32] WE HAVE TO LISTEN SO WE CAN GOVERN BETTER DEMOCRACY DEPENDS
[01:31:36] ON HEAVY DOSES OF CIVILITY. YOU CAN FIGHT AND STILL BE
[01:31:40] FRIENDLY. BRIDGING THE DIVIDE IN AMERICAN POLITICS.
[01:31:43] YOU KNOW, YOU MAY NOT AGREE WITH IT. DON'T COUNT ON EVERYTHING, BUT YOU CAN FIND AREAS WHERE YOU DO
[01:31:47] AGREE. HE'S A PRETTY LIKABLE GUY AS WELL. CHRIS -- AND I ARE ACTUALLY FRIENDS.
[01:31:50] HE VOTES WRONG ALL THE TIME, BUT WE'RE ACTUALLY FRIENDS. SO HORRIBLE SECRET THAT SCOTT
[01:31:53] AND I HAVE IS THAT WE ACTUALLY RESPECT EACH OTHER. WE ALL DON'T HATE EACH OTHER.
[01:31:57] YOU TWO ACTUALLY KIND OF LIKE EACH OTHER. THESE ARE THE KINDS OF SECRETS
[01:32:00] WE'D LIKE TO EXPOSE. IT'S NICE TO BE WITH A MEMBER WHO KNOWS WHAT THEY'RE TALKING ABOUT.
[01:32:04] YOU GUYS DID AGREE TO THE CIVILITY, RIGHT?
[01:32:07] HE OWES MY SON $10 FROM THE BET. HE'S NEVER PAID FOR IT.
[01:32:11] THAT'S FIGHTING WORDS RIGHT NOW. GLAD I'M NOT IN CHARGE.
[01:32:15] I'M THRILLED TO BE ON THE SHOW WITH HIM. THEY'RE NOT SHOWS LIKE THIS, RIGHT?
[01:32:18] INCENTIVIZING THAT RELATIONSHIP. CEASE FIRE.
[01:32:23] FRIDAY NIGHTS ON C-SPAN.
[01:32:28] WELL, UP NEXT, HEALTH AND
[01:32:30] MEDICAL LEADERS JOIN POLICY ADVOCATES AND TECH INDUSTRY
[01:32:34] EXECUTIVES TO EXAMINE THE HARMFUL IMPACTS OF SCREEN USE BY
[01:32:37] CHILDREN AND CERTAIN ACTIONS THAT COULD BE TAKEN IN RESPONSE.
[01:32:41] THIS IS HOSTED BY THE HEALTH AND HUMAN SERVICES DEPARTMENT HERE
[01:32:43] IN WASHINGTON.