Original Broadcaster Captioning (Enhanced). Treat it as a searchable index of what was broadcast, not a quotation record.
00:00:01OR NOT AN INDIVIDUAL IN
00:00:01ARGENTINA, ZIMBABWE, KAZAKHSTAN
00:00:06IS USING A U.S. DOLLAR BACKED STABLECOIN? I THINK YOUR TESTIMONY ACTUALLY EXEMPLIFIES THIS ABOUT THE
00:00:10IMPORTANCE. COULD YOU ADD SOME COLOR? IS TO WHY THAT ACTUALLY MAKES
00:00:12LIFE MORE AFFORDABLE FOR SOMEBODY IN KENOSHA, WISCONSIN,
00:00:17WHEN AN INDIVIDUAL OUTSIDE THE UNITED STATES IS USING A U.S.
00:00:20DOLLAR BACKED STABLECOIN OR U.S. REGULATORY REGIME?
00:00:24WELL, FIRST OF ALL, THANK YOU. THANK YOU SO MUCH FOR YOUR
00:00:26LEADERSHIP, CONGRESSMAN STYLE ON ALL OF THESE ISSUES.
00:00:29AND IN SOME WAYS, THIS HITS A LITTLE CLOSE TO HOME, BECAUSE AS
00:00:33IT TURNS OUT, MY BROTHER AND SISTER IN LAW AND THEIR TWO YOUNG DAUGHTERS LIVE IN KENOSHA,
00:00:38WISCONSIN. AND THE REASON, OF COURSE, IS THAT THE MORE DOLLARS WE HAVE
00:00:41OUT THERE IN THE WORLD, THE MORE PEOPLE ARE USING THE U.S. DOLLAR
00:00:45IN THE GLOBAL SOUTH AND IN ASIAN FINANCIAL MARKETS.
00:00:48THE MORE THE DOLLAR IS THE
00:00:51WORLD'S RESERVE CURRENCY AND
00:00:55THEREFORE BORROWING COSTS ARE LOW, BORROWING COSTS ARE LOW HERE FOR THE UNITED STATES.
00:00:59BUT THAT IS PASSED ON TO CONSUMERS.
00:01:01SO THE PRICE OF GAS IN KENOSHA AND IT ACTUALLY IS MUCH CHEAPER,
00:01:04BY THE WAY, OVER THE BORDER IN WISCONSIN THAN IN ILLINOIS,
00:01:08WHERE I LIVE. THAT IT'S NEVER TOO LATE TO MOVE NORTH.
00:01:12I THAT THAT THAT IS RELATED TO
00:01:14THE FACT THAT, AGAIN, THE DOLLAR IS THE WORLD'S RESERVE CURRENCY.
00:01:17AND SO ALL OF THE BORROWING RATES THE FACT THAT THE UNITED
00:01:20STATES ENJOYS THAT BECAUSE THERE'S DEMAND FOR THE DOLLAR,
00:01:22ALL OF THAT COMES TO CITIZENS EVERYWHERE, INCLUDING THERE IN
00:01:25KENOSHA, THAT SHOWS UP IN THE PRICE OF OIL. WHAT DOES THAT DO IF SOMEBODY
00:01:29GOES TO BUY TO GET A HOME LOAN? THE TEN YEAR TREASURY OBVIOUSLY
00:01:32CONNECTED TO TO A 30 YEAR HOME LOAN. SO SOMEBODY WANTS TO GO BUY A HOUSE, YOU WISE UP, YOU MOVE
00:01:36FROM ILLINOIS TO WISCONSIN, JUST NORTH YOU GO AND YOU GET A HOME
00:01:40LOAN OR A REGULAR PERSON DOES WHO'S EMPLOYED IN THE GREAT
00:01:44STATE OF WISCONSIN. WHAT IS THE IMPACT ON SOMEBODY GETTING A HOME LOAN IF MORE AND
00:01:48MORE PEOPLE ARE ENGAGED IN IN U.S. DOLLAR BANKS, PEOPLE GOING
00:01:51AGAIN OUTSIDE THE UNITED STATES, ALL THINGS BEING EQUAL, THAT RATE IS LOWER. YOU CAN'T SEE IT.
00:01:55BUT WHAT YOU WOULD SEE IS THAT IF WE LOST THE RESERVE STATUS,
00:01:58IF WE LOSE THE DOLLAR AND THAT'S WHY DOLLAR STATE CRAFT IS SO
00:02:02IMPORTANT, THE CONSEQUENCES WOULD GO THROUGHOUT OUR ECONOMY
00:02:05AND BE BORNE BY AMERICAN FAMILIES AND WORKERS.
00:02:08I WANT TO STAY ON THE STABLECOIN PIECE FOR A MINUTE.
00:02:11IN PARTICULAR, JEN, TAKE I THIS IS SOMETHING THAT COULD BE
00:02:15TRANSFORMATIVE. WE'RE ALL KIND OF LOOKING AND EXPLORING, TRYING TO UNDERSTAND THIS.
00:02:19HOW IMPORTANT IS IT TO HAVE A
00:02:20U.S. REGULATORY REGIME WITH U.S.
00:02:24DOLLAR BACKED STABLECOIN AS ITS FOCUS?
00:02:26AS WE LOOK AT POTENTIAL GROWTH AND DEVELOPMENT AND THE AGENDA I
00:02:30SPACE, IT'S ABSOLUTELY CRITICAL,
00:02:32WHICH IS WHY THE GENIUS ACT IS CRITICAL AND WHY THE CLARITY
00:02:35WHAT WOULD HAPPEN IF WE DIDN'T HAVE IT IN PLACE. RIGHT. WE HAD A LOT OF DISCUSSION IN
00:02:39THIS ROOM ABOUT WHETHER OR NOT WE SHOULD PROVIDE RULES AND REGULATIONS IN PLACE, PROTECT
00:02:43CONSUMERS, MAKE SURE THAT THINGS ARE OPERATING UNDER A U.S.
00:02:47REGULATOR FREE FRAMEWORK. WHAT WOULD HAPPEN IF WE IF WE HAD NOT PASSED GENIUS, LET'S DO
00:02:51THE COUNTERFACTUAL AND THE AGENDA GUY BEGINS TO PICK THIS UP.
00:02:55WHAT'S THE WHAT WOULD HAVE BEEN THE RISK TO U.S. CONSUMERS? I'D SAY TWO BIG RISKS.
00:02:58THE FIRST IS THE DOLLAR COULD BE USED, BUT IT WOULDN'T BE DOLLARS
00:03:02THAT ARE HELD TO THE SAME STANDARDS OF THE GENIUS ACT. IT COULD BE OFFSHORE DOLLARS
00:03:05THAT ARE BACKED ENOUGH BY NOTHING AND ESSENTIALLY PUT THE
00:03:09GLOBAL ECONOMY AT RISK, AS WELL AS THAT UNDERMINE THE DOLLAR ITSELF.
00:03:12SECOND, BIG RISK WOULD BE ANOTHER CURRENCY.
00:03:16OTHER THAN THE DOLLAR TAKES PLACE. WE KNOW THERE ARE STRATEGIC COMPETITORS OUT THERE THAT WOULD
00:03:19BE MORE THAN HAPPY TO HAVE THEIR OWN DIGITAL CURRENCY AND ARE
00:03:23ACTIVELY PUSHING IT. DO YOU THINK THERE SHOULD BE
00:03:25MORE WORK DONE IN THIS BROADER SPACE?
00:03:29IS RELATES TO SETTLEMENT TRIGGER
00:03:31SMART CONTRACT.
00:03:34AS WE THINK ABOUT A CHANGING AI AND THE USE OF US DOLLAR BACKED STABLECOINS? ABSOLUTELY.
00:03:37WE'RE IN THE EARLY INNINGS, BUT IT'S IMPORTANT THAT WE LEAD JUST
00:03:41LIKE WE'VE LED IN PAYMENTS STABLECOINS, JUST LIKE WE'VE LED
00:03:45IN THE GLOBAL FINANCIAL SYSTEM. OF COURSE, LYN'S TESTIMONY IS REALLY IMPORTANT BECAUSE YOU
00:03:48HAVE THE NEW YORK STOCK EXCHANGE
00:03:50MOVING INTO TOKENIZATION AND SO
00:03:54ABSOLUTELY GENTING WILL COME NEXT.
00:03:57I APPRECIATE YOUR TESTIMONY. APPRECIATE EVERYBODY FOR BEING HERE.
00:03:59I THINK THERE IS REAL BENEFITS TO HAVING A U.S. REGULATORY
00:04:03REGIME AND U.S. DOLLAR BACKED STABLECOIN DOESN'T ALWAYS SHOW UP IMMEDIATELY UNTIL YOU THINK
00:04:07ABOUT IT, BUT IT DOES SHOW UP IN EVERYDAY LIVING FROM GAS PRICES
00:04:11TO HOUSING AFFORDABILITY. APPRECIATE ALL YOUR TESTIMONY, MR. CHAIRMAN. I YIELD BACK.
00:04:15THE GENTLEMAN YIELD BACK. THE CHAIR RECOGNIZES THE RANKING
00:04:17MEMBER OF OUR SUBCOMMITTEE ON FINANCIAL INSTITUTIONS, DR.
00:04:21FOSTER OF ILLINOIS, FOR FIVE MINUTES. THANK YOU.
00:04:25AND THANK YOU TO OUR WITNESSES. YOU KNOW, I THINK WHEN THEY
00:04:28WRITE THE HISTORY OF THIS CONGRESS, THE NOTABLE
00:04:31ACHIEVEMENTS WILL BE THE BIPARTISAN ONES, PRINCIPALLY THE HOUSING BILL.
00:04:34AND I THINK THAT'S IMPORTANT. IT'S OUR INTENTION.
00:04:36I HOPE TO TRY TO CARRY THAT RECORD FORWARD IN THE NEXT
00:04:41CONGRESS. MR. TARBERT, I REALLY AGREE THAT
00:04:44THE DOMINANCE OF THE US DOLLAR IS A STRATEGIC ASSET TO OUR
00:04:48NATION. YOU MENTIONED IN YOUR TESTIMONY THE DOLLAR QUOTE, STANDS LESS ON
00:04:52THE ON THE PROCLAMATION THAN ON THE QUALITY OF THE LAW AND THE
00:04:56INSTITUTIONS BEHIND IT. AND THE PROBLEM IS, OF COURSE, THAT THIS ADMINISTRATION IS
00:05:00ASSAULTING BOTH OF OUR LAWS, BOTH OUR LAWS AND OUR INSTITUTIONS.
00:05:03YOU OPERATE INTERNATIONALLY. YOU KNOW, THE INTERNATIONAL ATTITUDE TOWARD THIS
00:05:07ADMINISTRATION, THEY ARE HORRIFIED AND THEY ARE DISGUSTED.
00:05:10NOW, WHEN THE PRESIDENT PROCLAIMS THAT IN ADDITION TO
00:05:14HIS FAMILY'S PERSONAL CONFLICTS OF INTEREST, WHICH HE CLAIMS NO
00:05:18ONE CARES ABOUT, THAT HE CLAIMS HE WILL NO LONGER ENFORCE THE
00:05:20FOREIGN CORRUPT PRACTICES, HIS ACT OR THE CORPORATE
00:05:23TRANSPARENCY ACT THAT ATTEMPTS TO PREVENT ANONYMOUS SHELL
00:05:26CORPORATIONS FROM OPERATING IN THE UNITED STATES.
00:05:29DOES GUTTING THESE STATUE ROOTS SUPPORT AMERICAN ECONOMIC
00:05:33DOMINANCE AND THE RULE OF LAW?
00:05:35ULTIMATELY, IT'S A DECISION FOR
00:05:37CONGRESS AND THE PRESIDENT. THE PRESIDENT HAS DECIDED NOT TO
00:05:41ENFORCE WHAT CONGRESS PASSED. ALL RIGHT. DOES THIS HELP OR DOES THIS HURT
00:05:44THE REPUTATION OF THE UNITED STATES AND THE DOMINANCE OF THE
00:05:49DOLLAR. I THINK ALL THINGS BEING EQUAL, THE LAWS THAT CONGRESS PASSED
00:05:53SHOULD BE EXECUTED AND EXECUTED WELL. RIGHT.
00:05:55AND WHEN THAT DOESN'T HAPPEN, IT HURTS AMERICAN DOLLAR DOMINANCE.
00:05:59SO THIS IS NOT JUST ME OR NOT JUST DEMOCRATS. AND ACCORDING TO A SURVEY OF
00:06:03CENTRAL BANKERS BY THE MONETARY AND FINANCIAL INSTITUTIONS FORM
00:06:06I'M FISH, A RECORD NUMBER OF CENTRAL BANKS PLAN TO CUT THEIR
00:06:10DOLLAR ALLOCATIONS IN THE COMING DECADE.
00:06:1379% OF CENTRAL BANKS AND 60% OF PUBLIC FUNDS BELIEVE THE
00:06:17MONETARY THE GLOBAL MONETARY
00:06:19SHIFTING IS TRANSITIONING AWAY FROM A DOLLAR DOMINATED SYSTEM
00:06:23TO A MULTIPOLAR WORLD. SO THIS IS HAPPENING AND IT'S
00:06:26HAPPENING BECAUSE OF THE ACTIONS OF THIS ADMINISTRATION, AND IT
00:06:29IS A MORTAL THREAT TO THE LONG TERM ECONOMIC HEALTH OF OUR COUNTRY.
00:06:33HOW DO YOU BELIEVE WE SHOULD RESPOND TO THIS?
00:06:34MR. HAMILTON PROFESSOR HAMILTON,
00:06:38WHAT'S THE RIGHT ANSWER TO THAT? I THINK YOU'RE ABSOLUTELY RIGHT.
00:06:42I THINK MORE BROADLY, TRADE
00:06:45WARS, PHYSICAL WARS AND VULGAR DIPLOMACY IS NOT HELPING THE
00:06:49DOLLAR, BUT HURTING THE DOLLAR. I THINK THAT, YOU KNOW, I'D GO A
00:06:53STEP FURTHER AS WE THINK ABOUT STABLECOINS AND OTHER OTHER
00:06:57COMPETING FORMS WITH OUR U.S. TREASURY.
00:06:59I THINK WE NEED TO BE CAREFUL HERE AS WELL. I THINK PART OF THE REASON THE
00:07:03DOLLAR'S STRONG IS IF THERE IS A
00:07:05CASE FOR MONOPOLY WITH REGARDS
00:07:08TO CURRENCY, THAT IS WHERE THE U.S. GOVERNMENT SHOULD HAVE A MONOPOLY.
00:07:12YEAH, AND THANK YOU. WE WERE JUST TALKING EARLIER
00:07:14ABOUT A GENDER GUY, WHICH EVERYONE AGREES IS GOING TO SORT
00:07:18OF DOMINATE. AND WHEN MY AGENTS STARTS TALKING TO YOUR AGENT, THE VERY
00:07:22FIRST QUESTION THAT IT ASKS IS, WHO THE HECK ARE YOU?
00:07:26AND HOW DO WE KNOW THAT THE GENDER IDENTITY IS CRUCIAL?
00:07:28AND THAT'S ACTUALLY HOLDING UP A LOT OF PROGRESS IN GETTING THAT IN.
00:07:31BUT IF THE ANSWER FOR THIS AGENT I'M TALKING TO IS, OH, I
00:07:34REPRESENT AN ANONYMOUS SHELL CORPORATION, HOW CAN THAT
00:07:38POSSIBLY WORK? YOU NEED TO HAVE A LEGALLY TRACEABLE PERSON BEHIND EVERY
00:07:41AGENT THAT ATTEMPTING TO OPERATE AND FINANCE.
00:07:45AND SO IT'S ANOTHER THING THAT'S IS BEING HURT BY THE PRESIDENT'S
00:07:49REFUSE OR TO, YOU KNOW, OPERATE
00:07:50WITH A BASIC PRINCIPLES OF
00:07:53BUSINESS INTEGRITY IN THIS
00:07:55PERSONAL FINANCES OR IN THOSE IN THE LAWS HE'S DECIDING TO ENFORCE.
00:08:00AND THAT HURTS. NOW, LET'S MISS BARTON.
00:08:02YOU KNOW, THE INTEGRITY OF OUR MARKETS ARE CRUCIAL.
00:08:06AND WHEN THE PRESIDENT ANNOUNCES THAT HIS PRIVATE SOCIAL MEDIA
00:08:10THING IS GOING TO RELEASE
00:08:12INFORMATION BASED ON BASED ON,
00:08:14YOU KNOW, GIVE EARLY ACCESS TO SOME PLAYERS WHO ARE WILLING TO
00:08:18PAY FOR IT BASED ON HIS OFFICIAL ACTIONS THAT HE'S TAKING IN
00:08:22RETURN FOR, YOU KNOW, MANY TENS OF THOUSANDS OF DOLLARS.
00:08:25I THINK A MONTH AS SUBSCRIPTION.
00:08:27DOES THAT DO YOU THINK THAT
00:08:29GENERATES CONFIDENCE IN THE INTEGRITY OF THE US MARKETS?
00:08:33I CAN'T COMMENT ON ANY SPECIFIC PRODUCT.
00:08:37OKAY. SO YOU YOU CAN'T COMMENT THAT
00:08:39YOU HAVE AN OPINION, YOU HAVE TO GIVE IT. DO YOU HAVE AN OPINION OR DO YOU
00:08:43THINK IT'S JUST OKAY? WELL, I THINK AT THE NEW YORK
00:08:47STOCK EXCHANGE, WE TAKE OUR RULES AND THE ENFORCEMENT OF OUR
00:08:51RULES VERY SERIOUSLY.
00:08:53AND THAT EXTENDS TO NEFARIOUS
00:08:56BEHAVIOR IN MARKETS. BUT I CANNOT COMMENT ON THE
00:08:58SPECIFIC PRODUCT YOU MENTIONED. OKAY. AMAZON GRANTED, YOU KNOW, AND
00:09:02WHEN I VISIT YOU, WHEN YOU'RE RUNNING THE CPB, I THOUGHT,
00:09:05OKAY, YOU WERE A CONSERVATIVE, BUT YOU'RE DOING A DECENT JOB OF RUNNING A QUALITY ORGANIZATION
00:09:10THAT THAT REALLY HELPED A LOT OF AMERICAN CONSUMERS.
00:09:13SO HOW DID YOU FEEL WHEN YOU SAW
00:09:15THAT THE DODGERS AND RUSSELL BOTH HAD THE INTENTION TO REDUCE
00:09:18THE CAP TO FIVE PEOPLE IN A TELEPHONE?
00:09:23CONGRESSMAN, THE CFP WAS GIVEN AN IMPORTANT MISSION BY CONGRESS
00:09:26AND THE CONGRESS ALSO INSULATED IT FROM OVERSIGHT. THAT IS CRITICAL.
00:09:30LIKE THE POWER OF THE PURSE. TIME HAS EXPIRED. THE CHAIR RECOGNIZES THE
00:09:35GENTLEMAN FROM SOUTH CAROLINA, MR. TIMMONS, FOR FIVE MINUTES. THANK YOU, MR. CHAIRMAN.
00:09:39THANK YOU. THE WITNESSES FOR JOINING US TODAY. THE WORK DONE BY OUR COMMITTEE,
00:09:42THIS CONGRESS, HAS MADE CLEAR THAT REPUBLICANS AND THIS ADMINISTRATION ARE FOCUSED ON
00:09:46FINDING SOLUTIONS THAT DELIVER FOR THE AMERICAN PEOPLE, PARTICULARLY IN FINANCIAL SERVICES.
00:09:50OUR WORK ON INNOVATION AND DIGITAL ASSETS IS HELPING ENSURE
00:09:53THAT AMERICA REMAINS THE GLOBAL LEADER IN FINANCIAL TECHNOLOGY
00:09:56BY PROVIDING GREATER CLARITY AND EMBRACING EMERGING TECHNOLOGIES.
00:09:59WE ARE CREATING AN ENVIRONMENT WHERE BUSINESSES CAN INVEST,
00:10:03GROW AND CREATE JOBS HERE AT HOME. THIS IS ABOUT KEEPING AMERICA
00:10:06COMPETITIVE, STRENGTHENING OUR FINANCIAL MARKETS, AND MAKING SURE THE NEXT GENERATION OF
00:10:10FINANCIAL INNOVATION HAPPENS HERE IN THE UNITED STATES.
00:10:13MR. TARBERT, LET'S START WITH YOU. THIS CONGRESS HAS MADE
00:10:16SIGNIFICANT PROGRESS IN ESTABLISHING THE RULES NEEDED FOR THE UNITED STATES TO LEAD IN
00:10:20DIGITAL FINANCE. THE GENIUS ACT HAS ESTABLISHED A
00:10:23FEDERAL FRAMEWORK FOR PAYMENT STABLECOINS.
00:10:25AND THE HOUSE HAS PASSED THE CLARITY ACT TO PROVIDE GREATER CERTAINTY AROUND DIGITAL ASSET
00:10:29MARKETS. THESE EFFORTS ARE GIVING INNOVATORS AND FINANCIAL
00:10:33SOLUTIONS CLEAR RULES OF THE ROAD AND HELP ENSURE THE NEXT
00:10:37GENERATION OF FINANCIAL INNOVATION HAPPENS HERE IN THE UNITED STATES.
00:10:40MY QUESTION IS THIS. YOU'VE SPOKEN ABOUT THE IMPORTANCE OF STABLECOINS AND
00:10:44DIGITAL ASSETS TO THE FUTURE OF THE GLOBAL FINANCIAL SYSTEM.
00:10:46AS OTHER COUNTRIES MOVE QUICKLY TO ESTABLISH THEIR OWN DIGITAL
00:10:49ASSET FRAMEWORKS, HOW IMPORTANT IS IT FOR THE UNITED STATES TO
00:10:53PROVIDE DURABLE REGULATORY CERTAINTY SO AMERICAN COMPANIES
00:10:55CAN COMPETE GLOBALLY AND ENSURE
00:10:57THE DOLLAR REMAINS AT THE CENTER OF THE DIGITAL FINANCIAL SYSTEM?
00:11:02CONGRESSMAN TIMMONS, THANK YOU FOR YOUR LEADERSHIP.
00:11:04IT IS ABSOLUTELY CRITICAL.
00:11:06I COULDN'T AGREE MORE.
00:11:09YOU'VE SERVED AS BOTH CFTC
00:11:11CHAIRMAN AND A SENIOR TREASURY OFFICIAL, INCLUDING A TIME WHEN
00:11:15POLICY MAKERS WERE STILL WORKING THROUGH HOW DIGITAL ASSETS SHOULD FIT WITHIN OUR FINANCIAL
00:11:19SYSTEMS. FROM YOUR PERSPECTIVE, HOW DOES THE APPROACH TODAY COMPARE WITH
00:11:22WHAT YOU SAW DURING YOUR TIME AT TREASURY AND THE CFTC?
00:11:26AND HOW WOULD CLEAR LINES OF REGULATORY AUTHORITY HELP THE
00:11:29UNITED STATES COMPETE ON A GLOBAL SCALE?
00:11:31WELL, IT'S FAR BETTER THAN THE TIME WHEN WE DIDN'T HAVE THE
00:11:35GENIUS ACT, FOR EXAMPLE, THE GENIUS ACT BEING PASSED GIVES
00:11:38CONGRESS POLICY DECISIONS TO THE
00:11:41EXECUTIVE BRANCH TO EXECUTE AND
00:11:43EXECUTE FAITHFULLY AND ENDS A
00:11:45LOT OF THE CONFUSION AS TO WHAT'S CLASSIFIED AS WHAT.
00:11:49AND THAT'S WHY THE CLARITY ACT, TO YOUR POINT, IS SO IMPORTANT,
00:11:51BECAUSE THERE'S STILL CONSIDERABLE CONFUSION OUT THERE
00:11:55AS TO WHAT IS A SECURITY VERSUS WHAT IS A COMMODITY.
00:11:58THE REGULATORS ARE DOING THEIR BEST, BUT IN THE ABSENCE OF CLEAR DIRECTION FROM CONGRESS,
00:12:02IT'S PRETTY DIFFICULT. AND THE AMERICAN PEOPLE, I
00:12:05THINK, LOOK TO CONGRESS TO MAKE THESE CORE POLICY DECISIONS AND
00:12:09CREATE THE FRAMEWORK.
00:12:10IN OTHER AREAS, THEY SIMPLY DON'T HAVE THE RULEMAKING
00:12:14AUTHORITY BECAUSE THEY DON'T HAVE THE JURISDICTION. THE CFTC FOR SPOT MARKET, FOR
00:12:17DIGITAL COMMODITIES, FOR EXAMPLE. SO THERE'S NO RULEMAKING AT ALL
00:12:21TO BE DONE BECAUSE THEY SIMPLY DON'T HAVE THE JURISDICTION. WELL, IT SEEMS THAT THINGS ARE
00:12:25MOVING IN THE RIGHT DIRECTION, SO WE'VE GOT TO CONTINUE THE
00:12:28WORK THAT WE'RE DOING ON HOUSING.
00:12:32DO THE BACK AND FORTH WITH OUR SENATE COLLEAGUES. WE WERE ABLE TO ADVANCE
00:12:35BIPARTISAN LEGISLATION FOCUSED ON ONE OF THE MOST FUNDAMENTAL
00:12:38CHALLENGES FACING AMERICAN FAMILIES TODAY THE SHORTAGE OF HOUSING, THE 21ST CENTURY ROAD
00:12:42TO HOUSING ACT BECAME LAW THIS YEAR, WITH PROVISIONS FOCUSED ON
00:12:46INCREASING HOUSING SUPPLY, STREAMLINING THE DEVELOPMENT
00:12:48PROCESS, MODERNIZING FEDERAL HOUSING PROGRAMS, AND IMPROVING
00:12:52ACCESS TO MORTGAGE CREDIT. MR. POLLACK, GIVEN YOUR DECADES
00:12:55OF EXPERIENCE IN HOUSING FINANCE AND YOUR TIME AT THE TREASURY DEPARTMENT, I WOULD LIKE TO GET
00:12:59YOUR PERSPECTIVE ON THE CHALLENGES THAT REMAIN. AS WITH ANY MAJOR PIECE OF
00:13:03LEGISLATION WE WORK ON IN WASHINGTON, ONE OF OUR BIGGEST
00:13:05RESPONSIBILITIES IS EXPLORE MEANING TO THE FAMILIES IN OUR
00:13:08DISTRICT HOW THE WORK WE DO WILL ACTUALLY BENEFIT THEM.
00:13:12NOW THAT THE 21ST CENTURY ROAD TO HOUSING ACT HAS BEEN SIGNED INTO LAW, COULD YOU HIGHLIGHT
00:13:15SOME OF THE PROVISIONS IN THIS BILL THAT YOU BELIEVE WILL HAVE
00:13:19THE GREATEST IMPACT ON HOUSING AFFORDABILITY AND NEW HOME
00:13:21CONSTRUCTION, PARTICULARLY FOR FAMILIES AND COMMUNITIES IN MY
00:13:25DISTRICT BACK IN SOUTH CAROLINA? THANK YOU, CONGRESSMAN.
00:13:29WE MENTIONED BEFORE IN GENERAL
00:13:31THE ATTEMPT TO STREAMLINE AND
00:13:36APPROVALS STUDIES AND REGULATION
00:13:38WHICH WILL BENEFIT EVERYBODY. A PARTICULAR CASE ON THE
00:13:42AFFORDABLE END ARE THE
00:13:44PROVISIONS AROUND.
00:13:48AROUND MOBILE HOMES OR
00:13:50MANUFACTURED HOUSING, WHICH SHOULD I THINK, SHOULD HAVE A
00:13:54MATERIAL EFFECT.
00:13:57THERE THE THE THE BILL CONTAINS
00:13:59A LOT OF STUDIES OF INTERESTING IDEAS.
00:14:03I THINK GOING FORWARD, IT WILL BE IMPORTANT TO FOLLOW UP ON
00:14:05THOSE STUDIES AND HAVE THE
00:14:09CONGRESS EXERCISING OVERSIGHT AND ON HOW THEY'RE DOING AND HOW
00:14:13THE VARIOUS REPORTING RESPONSE
00:14:17POSSIBILITIES ON THE REGULATORS,
00:14:19WHICH ARE ARE ARE PROVIDED IN
00:14:23THE ACT, ARE FOLLOWED. ARE FOLLOWED UP ON.
00:14:28ONE THING ABOUT HOUSING IN
00:14:30GENERAL IS, AS I SAID BEFORE, WE
00:14:33ARE STILL IN THE AFTERMATH OF THE GREAT.
00:14:36SECOND HOUSE PRICE BUBBLE OF THE UNITED STATES IN THIS CENTURY.
00:14:40AND WE'RE GOING TO HAVE TO LIVE THROUGH THAT.
00:14:42I THINK THERE'S GOING TO BE A DOWNWARD.
00:14:46GENTLEMAN'S TIME. SURE THAT I'M OUT OF TIME. I YIELD BACK.
00:14:48YOU SAID ON ON HOUSE PRICES THAT WE ALL CONFRONT.
00:14:51THANK YOU. THE GENTLEMAN YIELD BACK. THE CHAIR RECOGNIZES THE
00:14:54GENTLEMAN FROM CALIFORNIA, MR. LUCADO, FOR FIVE MINUTES.
00:14:57THANK YOU, CHAIR. MR. POLLACK, I APPRECIATE YOUR
00:15:01FOCUS ON THE BIPARTISAN EFFORTS TO ADDRESS THE HOUSING CRISIS IN OUR COUNTRY.
00:15:05AND THOSE EFFORTS WERE FAR FROM PERFECT. OBVIOUSLY, THERE'S MUCH MORE
00:15:08WORK TO BE DONE AND. BUT IN THIS VERY DIVISIVE
00:15:11POLITICAL MOMENT, IT'S NOTABLE
00:15:13THE FUNDAMENTAL ASSUMPTION, I
00:15:16THINK, OF THAT EFFORT SINCE I WAS PART OF IT AND HAD FOUR BILLS IN THE PACKAGE.
00:15:20IT WAS THAT BUILDING MORE HOUSING IS A GOOD THING TO ADDRESS. THEREFORE.
00:15:24ABILITY CHALLENGES THAT MILLIONS OF AMERICANS FACE. IS THAT IS THAT FAIR?
00:15:28THERE'S A DEFINITE EMPHASIS ON SUPPLY, YES.
00:15:30AS WE SAID BEFORE, AND NOT JUST PUMPING UP DEMAND.
00:15:34YES. CONGRESSMAN, AND YOUR THINK TANK, THE MISES INSTITUTE,
00:15:36DESCRIBES THE AUSTRIAN SCHOOL OF ECONOMICS, WHICH EMPHASIZES
00:15:40INDIVIDUAL FREEDOM.
00:15:44SOMEWHAT, SOME MIGHT REGARD AS CONSERVATIVE VALUES. IS THAT FAIR?
00:15:48THE AMAZING INSTITUTE IS NAMED AFTER LUDWIG FUND MEASLES, WHO'S
00:15:51A FOUNDER OF THE AUSTRIAN SCHOOL AND EMPHASIZES HUMAN FREEDOM.
00:15:57VOLUNTARY CHOICE TO THE ADVANTAGE OF MARKETS. YES.
00:16:00MY APOLOGIES TO HIM FOR MISPRONOUNCING HIS LAST NAME.
00:16:03I DIDN'T MEAN TO BE CORRECTING YOU THE GOOD NEWS IS THERE ARE
00:16:05ISSUES ACROSS THE IDEOLOGICAL SPECTRUM THAT MANY ECONOMISTS
00:16:08AGREE UPON. FOR EXAMPLE, HIGHER COSTS FOR CONSTRUCTION MATERIALS COULD
00:16:13HURT HOUSING AFFORDABILITY. IS THAT FAIR?
00:16:15IT SOUNDS FAIR TO ME, YES.
00:16:18HOUSING, HIGHER FUEL PRICES COULD ALSO UNDERMINE HOUSING.
00:16:22AFFORDABLE. BECAUSE OF THAT, COSTS ARE BORN THROUGH CONSTRUCTION. THAT FOR A CONGRESSMAN.
00:16:26I'M NOT SURE WHERE YOU'RE GOING WITH HIGHER PRICES IN GENERAL
00:16:29AND INFLATION HURT THE FUNCTIONING OF THE ECONOMY,
00:16:33WHICH IS WHY WE NEED TO WORK FOR SOUND MONEY. MAYBE WE CAN AGREE ON THAT ONE.
00:16:37AND HIGH INTEREST RATES ALSO
00:16:39UNDERMINE HOUSING, AFFORDABLE INTEREST RATES ARE A MARKET
00:16:43EFFECT. INTEREST RATES GO UP AND DOWN
00:16:45WITH SUPPLY AND DEMAND, THERE
00:16:48ARE PRICE AND PRICES NEED TO BE ADJUSTABLE.
00:16:50AND SO HIGHER INTEREST RATES WILL UNDERMINE HOUSING
00:16:54AFFORDABILITY, HIGHER INTEREST
00:16:56RATES MAKE MORTGAGES MORE. EXPENSIVE, YES, BUT LOWER
00:17:01INTEREST RATES CAN ALSO CAUSE HOUSING TO BE MORE EXPENSIVE
00:17:06THROUGH THE PROCESS. YES. THROUGH. WHEN THERE WHEN THEY'RE
00:17:08ABNORMALLY SUPPRESSED, AS THEY WERE RIGHT FOR A DECADE.
00:17:12THE RESULT IRONIC. TOTALLY.
00:17:15YOU'RE TRYING TO MAKE THINGS CHEAPER. YOU END UP MAKING THEM MORE EXPENSIVE.
00:17:18AND HOUSES IN PARTICULAR. YES.
00:17:21AND SHORTAGES OF CONSTRUCTION. LABOR ALSO UNDERMINES HOUSING AFFORDABILITY.
00:17:24THAT FOR SURE.
00:17:26AND SO WE HAVE AN EFFORT BY THIS
00:17:30CONGRESS IN A BIPARTISAN WAY TO ADDRESS HOUSING AFFORDABILITY.
00:17:33AND WE HAVE AN ADMINISTRATION
00:17:35THAT HAS DRIVEN UP TARIFFS ON
00:17:37MATERIALS LIKE STEEL AND CANADIAN WOULD.
00:17:41HAS DRIVEN UP COSTS FOR FUEL
00:17:43WITH A WAR WITHOUT ANY CLEARLY
00:17:45DEFINED STRATEGIC, ACHIEVABLE OBJECTIVE.
00:17:48AND THOSE COSTS UNDOUBTEDLY HAVE
00:17:51BORNE SOME PAIN THROUGH HIGHER CONSTRUCTION COSTS.
00:17:54IS THAT FAIR, CONGRESSMAN?
00:17:58AS IS THE AUSTRIAN SCHOOL, AND
00:18:03LUDWIG VON MISES WOULD SAY THE CLOSER WE CAN GET TO COMPETITIVE
00:18:07FREE MARKETS, THE BETTER.
00:18:09RESOURCE ALLOCATION AND THE BETTER THE PEOPLE ARE BETTER
00:18:13OFF. THE PEOPLE WILL BE. AND TARIFFS AND WARS PROBABLY ARE NOT AS YET.
00:18:17THAT EFFORT TARIFFS ARE NOT THAT. YES.
00:18:21AND RUNNING LARGE FEDERAL BUDGET
00:18:23DEFICITS COULD CROWD OUT PRIVATE SECTOR BORROWING. THAT COULD ALSO DRIVE UP
00:18:27INTEREST RATES.
00:18:31BARELY. UNCONTROVERTED? YEAH. AS I SAID BEFORE, THE INTEREST
00:18:34RATES ARE A PRICE THEY REFLECT SUPPLY AND DEMAND.
00:18:37AND THIS CONGRESS, WITH THIS ADMINISTRATION, JUST ADDED MORE
00:18:41THAN $4 TRILLION TO OUR DEBT.
00:18:43BY ACCELERATING THAT, THE THE DEBT IS A.
00:18:46THE DEBT IS RISING, BUT THE DEBT
00:18:48IS A HERITAGE OF VERY MANY
00:18:52ADMINISTRATIONS, A GREEDY, MANY AND VERY MANY CONGRESS AND
00:18:55CERTAINLY THIS SITUATION THAT HAS BEEN A BIPARTISAN EFFORT,
00:18:58CONGRESSMAN, BUT THAT DEBT HAS DOUBLED SINCE DONALD TRUMP TOOK
00:19:01OFFICE IN 20 1716. EXCUSE 17. THANK YOU.
00:19:06AND AND THE SHORTAGES IN CONSTRUCTION, LABOR, I THINK
00:19:09CERTAINLY YOU'VE SEEN PLENTY OF NEWS REPORTING FROM STATES LIKE
00:19:13TEXAS WHERE THE CONSTRUCTION
00:19:15INDUSTRY COMPLAINS THAT THEY ARE
00:19:19SUFFERING SUBSTANTIALLY AROUND A
00:19:20LACK OF LABOR BECAUSE OF CHAOTIC
00:19:25IMMIGRATION ENFORCEMENT.
00:19:28WELL, THE CHAOTIC IMMIGRATION LAWS WERE DEFINITELY A
00:19:32BIPARTISAN. AND I HAVE TO SAY, PRINCIPALLY DEMOCRAT. I UNDERSTAND.
00:19:35BUT I SAID ENFORCEMENT SPECIFICALLY, WE COULD ALL AGREE THERE ARE PLENTY OF LAWS TO FIX,
00:19:39BUT WE'VE SEEN UNIQUELY CHAOTIC ICE ENFORCEMENT.
00:19:43IS THAT FAIR TO SAY? WE HAVE CERTAINLY SEEN
00:19:46ENFORCEMENT OF THE LAW, FOLLOWED BY AN ENFORCEMENT OF THE LAW.
00:19:49WELL, I WOULD SAY THAT WE HAVE A
00:19:51PRETTY STRONG RECORD FOR THIS ADMINISTRATION IN. UNDERMINING HOUSING
00:19:57AFFORDABILITY ON VIRTUALLY EVERY SCORE. THANK YOU.
00:20:00YIELD GENTLEMAN YIELDS BACK.
00:20:02I RECOGNIZE MYSELF NOW FOR FIVE MINUTES.
00:20:05THANK YOU ALL FOR BEING HERE TODAY.
00:20:09AND I WANT TO JUMP IN TO SOMETHING THAT I THINK IS
00:20:12IMPORTANT FOR EXPANDING THE INVESTOR BASE, AND THAT'S THE
00:20:16INVEST ACT. THIS COMMITTEE HAS BEEN CLEAR THAT THE CURRENT ACCREDITED
00:20:19INVESTOR DEFINITION. GATEKEEPERS, PRIVATE MARKETS BY
00:20:23WEALTH AND NOT BY KNOWLEDGE. AND I'D LIKE TO ASK MS. MARTIN AND ALSO, MR. HAMILTON,
00:20:30YOU'RE. YOUR OPINION AS WELL. BUT BY LETTING INVESTORS QUALIFY
00:20:33ON A FINANCIAL EXPERTISE INSTEAD OF NET WORTH, HOW DOES THE
00:20:37INVEST ACT GIVE QUALIFIED
00:20:39AMERICANS A REAL SHOT AT HIGH
00:20:41GROWTH PRIVATE COMPANIES AND LET
00:20:44THEIR RETIREMENT SAVINGS GROW ALONGSIDE INSTITUTIONAL INVESTORS?
00:20:48MS. MARTIN, START WITH YOU. UNFORTUNATELY, I DON'T HAVE THE
00:20:50DETAILS OF THE ACT BECAUSE IT'S NOT JUST ABOUT THE IDEA.
00:20:54IT'S ABOUT THE MECHANISM IN WHICH YOU ACHIEVE THAT IDEA.
00:20:58BUT FROM OUR PERSPECTIVE,
00:21:00EXPANDING ACCESS TO COMPANIES,
00:21:02PUBLIC COMPANIES, PRIVATE COMPANIES INVEST ABILITY AS LONG
00:21:06AS IT'S COUPLED WITH TRANSPARENCY.
00:21:09C IS A GOOD THING BECAUSE. OUR NORTH STAR AT THE NEW YORK
00:21:12STOCK EXCHANGE IS TO ENABLE
00:21:15PEOPLE TO INVEST, TO INVEST IN
00:21:19COMPANIES AT VARIOUS STAGES.
00:21:21WE THINK THE RIGHT MECHANISM FOR
00:21:24THAT IS OUR PUBLIC MARKETS AND
00:21:28ENSURE THAT THE COMPANIES THE MOST INNOVATE OF COMPANIES HAVE
00:21:31A CLEAR PATH TOWARDS GOING
00:21:33PUBLIC IN THE MOST TRANSPARENT
00:21:35FASHION POSSIBLE. SO ARE YOU YOU BELIEVE, THOUGH
00:21:39YOU KNOW, WITH THE RIGHT PARAMETERS?
00:21:41GUIDELINES GIVING MORE PEOPLE
00:21:44ABILITY TO PARTICIPATE IS GOOD?
00:21:48ABSOLUTELY. FROM OUR PERSPECTIVE, IT'S ALSO ABOUT INVESTOR PROTECTION.
00:21:51ONE OF OUR HALLMARK ARCS IS
00:21:53INVESTOR PROTECTION, ENSURING
00:21:56THAT IF I PLACE MY RETIREMENT
00:22:00SAVINGS INTO THE MARKET, I WANT
00:22:03TO ENSURE THAT IT IS PROTECTED
00:22:05FROM BAD ACTORS. SURE. ABSOLUTELY.
00:22:08MR. HAMILTON.
00:22:11I'M ALSO GOING TO COMMENT THAT I DON'T HAVE ALL THE DETAILS, BUT
00:22:15THE THE BROADER PRINCIPLE OF
00:22:17EXPANDING ACCESS IN AND OF
00:22:20ITSELF IS A GOOD IDEA AS LONG AS
00:22:22WE'RE ALSO ATTUNED TO SOME OF THE LESSONS THAT THAT ACCESS CAN
00:22:26BE EXPLORED VOIDED AS WELL FOR
00:22:30THOSE THAT ARE MORE VULNERABLE. DO YOU FEEL THAT THERE ARE FOLKS
00:22:33THAT ARE BOXED OUT RIGHT NOW
00:22:35UNDER THE CURRENT GUIDELINES AND
00:22:38RULES THAT WE HAVE? YES. YES.
00:22:42IN A SIMPLE ANSWER. BUT AGAIN, I THINK WE HAVE SOME
00:22:45CLEAR LESSONS OF THE PAST WHEN WE'VE EXPANDED ACCESS WITHOUT
00:22:49THE RIGHT GUARDRAILS, AND THEN
00:22:51IT TURNED INTO EXPLOITATION. THE SUBPRIME MORTGAGE CRISIS
00:22:55WOULD BE ONE EXAMPLE. THANK YOU. I WANT TO JUMP BACK TO THE ROAD
00:22:59TO HOUSING. THIS COMMITTEE RECENTLY
00:23:02DELIVERED A MAJOR, MAJOR RELIEF
00:23:05FOR AMERICAN HOMEBUYERS BY ENACTING THE 21ST CENTURY ROAD
00:23:08TO HOUSING ACT. THIS LAW ADDRESSES SOMETHING I
00:23:10HEAR ABOUT FREQUENTLY FROM MY CONSTITUENTS IN NORTHEAST INDIANA.
00:23:14GOVERNMENT RED TAPE COMPLEX REGULATIONS.
00:23:19THAT'S, YOU KNOW, COME FROM THE ENVIRONMENTAL REVIEWS AND THE PERMITTING PROCESS.
00:23:22AND THAT'S WHY I INTRODUCED THE STREAMLINE RURAL HOUSING ACT,
00:23:25WHICH BECAME LAW PART OF THIS PACKAGE.
00:23:29MR. POLLACK, I'D LIKE TO ASK YOU, HOW WILL ROADS PERMITTING
00:23:31ENVIRONMENTAL REVIEW REFORMS
00:23:33CREATE A MEANINGFUL DIFFERENCE FOR THOSE LOOKING TO BUILD OR
00:23:37BUY A HOME? CONGRESSMAN, I'M SURE IT WILL
00:23:41HELP IN GENERAL, A LOT OF
00:23:44REGULATION STARTS OFF WITH ALL GOOD INTENTIONS OVER TIME AND
00:23:48COMPLEXITY. SIZE ITSELF GROWS MORE EXPENSIVE
00:23:52AND I THINK IT'S ESSENTIAL FOR THE CONGRESS FROM TIME TO TIME
00:23:54TO REVIEW THAT AND TAKE STEPS TO
00:23:56BRING IT INTO BALANCE. AS IN MY OPINION, THIS ACT DID
00:24:00DO IT. MR. HAMILTON, THROW THAT TO YOU AS WELL?
00:24:03I DON'T KNOW IF YOU'RE FAMILIAR WITH SOME OF THE HOUSING REFORMS
00:24:07THAT WE MADE. BUT, YOU KNOW, AGAIN, I MEAN.
00:24:09TRYING TO RELAX THE ABILITY FOR PEOPLE TO GET INTO A HOME IS
00:24:13IMPORTANT, TOO. BUT WHAT ARE YOUR THOUGHTS? I APPLAUD THE CONGRESS ON THE
00:24:16VALUES OF EXPANDING HOUSING. I WOULD ENCOURAGE THE CONGRESS
00:24:20TO DIRECT SOME MORE RESOURCES DIRECTLY, BECAUSE THE NUMBER ONE
00:24:23INGREDIENT IS CAPITAL ITSELF. IF WE DO THAT, THOUGH, DON'T WE
00:24:27PUSH PRICES HIGHER? IT DEPENDS ON TO WHOM YOU OFFER
00:24:31IT TO. SO THERE ARE WAYS IN WHICH YOU CAN MAKE IT IN TARGETED SPECIFIC
00:24:35WAYS TO PROVIDE ACCESS TO THOSE WHO OTHERWISE WOULDN'T HAVE IT.
00:24:38YEAH, I THINK YOU KNOW, TRYING TO DRIVE THE COST DOWN IS IMPORTANT BECAUSE WE'VE SEEN
00:24:43THIS INFLATION OVER THE PAST FIVE YEARS BECAUSE ALL THIS MONEY COMING FROM WASHINGTON
00:24:47KEPT COMING INTO THE SYSTEM AND JUST DROVE PRICES HIGHER.
00:24:51YOU KNOW, AND I THINK THAT WHILE THE ECONOMY WE HAVE CERTAIN
00:24:56CHALLENGES, I ALSO SEE THE FUNDAMENTALS BEING VERY GOOD.
00:24:58AND I THINK IF WE CAN, IN.
00:25:00ENABLE AMERICANS TO BUILD THEIR
00:25:03OWN AT A LOWER COST, THAT'S GOING TO BENEFIT ALL OF US.
00:25:07MY TIME HAS EXPIRED. SO AT THIS TIME, THANK YOU TO ALL OF YOU.
00:25:10THE CHAIR RECOGNIZES THE CHAIR OF OUR SUBCOMMITTEE ON OVERSIGHT
00:25:13AND INVESTIGATE MR. MUELLER OF
00:25:16PENNSYLVANIA FOR FIVE MINUTES. THANK YOU, CHAIRMAN. THANK YOU ALL.
00:25:20GREAT, GREAT PANEL. REALLY APPRECIATE IT. UNDER CHAIRMAN HILL'S
00:25:24LEADERSHIP, THE FINANCIAL SERVICES COMMITTEE, OUR COMMITTEE HAS ADVANCED MANY
00:25:26PIECES OF LEGISLATION, INCLUDING THE MAIN STREET ACCESS TO
00:25:29CAPITAL ACT, THE GENIUS ACT, THE 21ST CENTURY ROAD TO HOUSING
00:25:33ACT, AND THE INVEST ACT, WHICH SUPPORT LONG TERM ECONOMIC GROWTH, FINANCIAL STABILITY AND
00:25:37PROVIDE. A HIGHER LEVEL ANYWAY, OF CERTAINTY FOR INVESTORS AND
00:25:41CONSUMERS. TOGETHER, THESE EFFORTS REFLECT THE COMMITTEE'S COMMITMENT TO
00:25:45MOVING FINANCIAL POLICY AWAY FROM A BIASED, GOVERNMENT DRIVEN
00:25:48MARKET DISTORTION TOWARDS SUPPLY SIDE GROWTH.
00:25:51CAPITAL FORMATION, EXPANDED ACCESS TO CAPITAL AND, AS WE
00:25:55SAY, MAKE. DOING OUR BEST TO MAKE COMMUNITY BANKS GREAT AGAIN.
00:25:59SO, MR. MANAGER, MY SAFE
00:26:02GUIDANCE ACT, WHICH WAS INCLUDED IN THE MAIN STREET CAPITAL ACCESS ACT, ENSURES
00:26:06TRANSPARENCY, LIMITS ABUSE OF REGULATORY GUIDANCE BY REQUIRING
00:26:10REGULATORS TO INCLUDE A DISCLAIMER ON THE FIRST PAGE OF ANY GUIDANCE DOCUMENT THAT MAKES
00:26:14CLEAR THIS IS. GUIDANCE AND IS NOT LAW.
00:26:18HOW WILL THIS AND OTHER PROVISIONS IN THE MAINSTREAM CAPITAL ACCESS ACT TRANSLATE
00:26:21INTO RELIEF FOR LENDERS AND ALLOW THEM TO FOCUS ON
00:26:25RESPONSIBLY DEPLOYING CAPITAL? CONGRESSMAN, THANK YOU SO MUCH
00:26:28FOR YOUR LEADERSHIP IN THAT IN THAT AREA.
00:26:30AND AND ON THE BILL'S, WE WOULD CERTAINLY WELCOME SEEING THE
00:26:34MAIN STREET CAPITAL ACCESS ACT
00:26:36BECOME LAW AND PARTICULARLY FOR
00:26:38THAT REASON, IT IS, I THINK, A HUGE CHALLENGE OF RECENT YEARS
00:26:42THAT REGULATORS WERE ASSERTING
00:26:46GUIDANCE DOCUMENTS WERE. YOU KNOW, THE FOUR HAD THE FORCE
00:26:49OF LAW WHEN THOSE ARE NONBINDING DOCUMENTS BY DEFINITION. SO WE CANNOT HAVE A SITUATION
00:26:53WHERE THERE WAS EXPECTATION LIENS ARE NOT GOING THROUGH THE
00:26:57NOTICE AND COMMENT RULEMAKING PROCESS AND ARE NOT BEING
00:27:00ESTABLISHED REQUIREMENTS AS OPPOSED TO GUIDANCE.
00:27:04THANK YOU AS WELL. I'M GOING TO ASK YOU, TRAVIS
00:27:07HILL AT THE FDIC.
00:27:09THE FDIC BEGAN EFFORTS TO INDEX CERTAIN REGULATORY THRESHOLDS.
00:27:13SO THAT THEY DO NOT BECOME MORE RESTRICTIVE, I.E., YOU KNOW,
00:27:16BASED UPON INFLATION, SIMPLY BECAUSE THE ECONOMY AND BANKING
00:27:20SYSTEM GROW OVER TIME. DO YOU BELIEVE THE REGULATORS ARE MOVING IN THE RIGHT
00:27:23DIRECTION WITH SUCH PLANS? ABSOLUTELY. AND CHAIRMAN HILL, TRAVIS HILL
00:27:28HAS CERTAINLY DONE A LOT OF WORK IN THAT EFFORT. IN OTHER AREAS AS WELL.
00:27:30AND THE OTHER REGULATORS HAVE THE INDEXING.
00:27:34WE HAVE REGULATORY THRESHOLDS THAT WERE SET NOMINALLY IN THE
00:27:381970 AND REALLY DO NOT HAVE ANY
00:27:40BEARING ON A RISK BASED APPROACH TO REGULATION TODAY. SO.
00:27:44APPRECIATE THE FOCUS OF CONGRESS ON INDEXING. VERY GOOD. THANKS.
00:27:48IT'S MARTIN. ONE CONCERNING TREND WE SAW UNDER THE BIDEN ADMINISTRATION
00:27:52WAS DECLINE IN U.S. IPOS. AS YOU MENTIONED, THE TREND IS
00:27:55REVERSING. CLEARLY 65 IPOS RAISING PRACTICALLY $114 BILLION IN THE
00:28:00FIRST HALF OF 2026, NEARLY DOUBLE THE NUMBER AND MORE THAN
00:28:02SEVEN TIMES A CAPITAL RAISE DURING THE SAME PERIOD LAST YEAR.
00:28:06IN YOUR OPINION, WHAT HAS BEEN THE BIGGEST CONTRIBUTORS TO THIS
00:28:09TREND AND HOW CAN THE INVEST ACT ADDRESS THOSE ISSUES?
00:28:12WELL, THANKS SO MUCH FOR YOUR LEADERSHIP.
00:28:15AND THE QUESTION, CONGRESSMAN.
00:28:18THE BIGGEST AREA WHERE WE'VE
00:28:21SEEN, I WOULD SAY THE BIGGEST
00:28:23CATALYST THAT WE'VE SEEN FOR THE
00:28:25IPO MARKETS RETURNING HAS REALLY BEEN THE CONFIDENCE, THE
00:28:30CONFIDENCE THAT THESE COMPANIES CAN RAISE THE CAPITAL THAT THEY
00:28:33NEED TO FUND THE OPERATIONS. AND AND TO YOUR POINT, THE
00:28:37RECORDS THAT WE'RE SEEING REALLY POINT TO THE FACT POINT TO THE
00:28:41SUCCESS, DEPTH, BREADTH,
00:28:43LIQUIDITY IN THOSE MARKETS.
00:28:45AND IT'S A TREND WE CONTINUE TO
00:28:49BELIEVE WILL WILL BE SEEN FOR
00:28:51THE MEDIUM TERM HERE WHERE
00:28:55INCREDIBLY OPTIMISTIC ABOUT THIS, NOT JUST BECAUSE IT ALLOWS
00:28:59THE MOST INNOVATIVE COMPANIES TO RAISE THE CAPITAL THAT THEY
00:29:03NEED, BUT IT ALSO ALLOWS THE MAIN STREET INVESTOR TO BROADEN
00:29:06OUT THE INVESTMENT IN THESE
00:29:08INCREDIBLY INNOVATE OF COMPANIES, COMPANIES WHO ARE
00:29:12REALLY BUILDING THE FUTURE OF AMERICA.
00:29:15SO THESE TRENDS WILL CONTINUE, WE BELIEVE.
00:29:18SO WE'RE VERY OPTIMISTIC ABOUT
00:29:20THE SECOND HALF OF THIS YEAR AND
00:29:22ACTUALLY NOW MOVING INTO 2027.
00:29:24AND I THINK IT REFLECTS THE HEALTH OF THE UNDERLYING MARKETS
00:29:28IN PARTICULAR. GOOD. I AGREE.
00:29:32MR. TARBERT THE GENIUS ACT.
00:29:36HOW HAS THE GENIUS ACT BEEN A GAME CHANGER FOR STABLECOIN ISSUERS AND CAN PROVIDE SOME
00:29:40INSIGHT ON HOW IT WILL BE
00:29:43IMPACTING EVERYDAY CONSUMERS USING STABLECOINS AND THEN MAYBE
00:29:46IN LIMITED TIME COMMENTS ON THE IMPORTANCE OF PASSING THE CLARITY ACT.
00:29:50YEAH, SO THANK YOU SO MUCH, CONGRESSMAN.
00:29:52IT'S BEEN ABSOLUTE CRITICAL BECAUSE NOW YOU'RE STARTING TO
00:29:56SEE THE GENIUS ACT ENCOURAGE FOLKS TO DO THINGS THE RIGHT WAY
00:29:59THROUGH TRANSPARENT AND SEE THROUGH BACKING ONE FOR ONE.
00:30:02ALL OF THAT PROTECTS CONSUMERS, BUT IT ALSO MAKES OUR FINANCIAL
00:30:06SYSTEM STRONGER AND THEN WE'RE
00:30:08STARTING TO SEE ADOPTION OF STABLECOINS IN ALL SORTS OF
00:30:11WAYS, INCLUDING AS CREDIT CARD SETTLEMENT AND THEREFORE
00:30:14REDUCING THE FEES THAT CONSUMERS AND SMALL BUSINESSES PAY.
00:30:18BUT THAT SAID, IT'S WE GOT TO
00:30:20FINISH THE JOB CLARITY ACT IS ALL THE MARKETS ABOVE THAT
00:30:23DOLLAR LAYER AND IT'S CRITICAL THAT WE GET THAT. EXCELLENT. MY TIME HAS EXPIRED.
00:30:27I YIELD BACK. MR. CHAIRMAN. THE GENTLEMAN YIELDS BACK. THE CHAIR RECOGNIZES THE
00:30:31GENTLEMAN FROM NEW JERSEY. MR. GOTTHEIMER. THANK YOU. MINUTES THANK YOU, MR. CHAIRMAN.
00:30:34AND THANK YOU, RANKING MEMBER WATERS.
00:30:38FINDING WAYS TO MODERNIZE AND EXPAND CERTAIN ASPECTS OF FEDERAL DEPOSIT INSURANCE
00:30:42REMAINS AN IMPORTANT PRIORITY FOR ME. THIS WILL HELP ENSURE THAT SMALL
00:30:44BUSINESSES REMAIN STABLE AND MAIN STREET IS ABLE TO ECONOMICALLY THRIVE.
00:30:48IT REMAINS IMPORTANT THAT WE FIND AN EQUITABLE SOLUTION DEPOSIT INSURANCE.
00:30:52MS. CRENSHAW THE DEPOSIT INSURANCE FUND IS SUPPOSED TO MAINTAIN A
00:30:56RESERVE RATIO OF AT LEAST 1.35 1.35% OF INSURED DEPOSITS.
00:30:59AND IT'S BEEN KNOCKED BELOW TARGETS BEFORE.
00:31:02FROM YOUR MEMBERS PERSPECTIVE, IS THE FUND ON SOUND FOOTING TODAY?
00:31:06AND ARE THE ASSESSMENTS BEING CALIBRATED IN A WAY THAT KEEPS IT HEALTHY WITHOUT PENALIZING
00:31:10WELL-RUN COMMUNITY BANKS? NOW, THANK YOU, CONGRESSMAN, FOR THE QUESTION.
00:31:13DEPOSIT INSURANCE OBVIOUSLY IS
00:31:16FUNDAMENTAL TO OUR BANKING SYSTEM, AND IT HAS BEEN AN
00:31:20IMPORTANT PROTECTION THAT CONSUMERS HAVE COME TO EXPECT
00:31:23AND THAT BANKS OBVIOUSLY PAY FOR THAT THROUGH THE ASSESSMENT
00:31:27PROCESS. AS YOU NOTICED, I KNOW THAT
00:31:29CHAIRMAN HILL HAS BEEN REVIEWING
00:31:31THIS, AND I DO BELIEVE THERE WAS
00:31:33A RECENT PROPOSAL ON THE ASSESSMENT PROCESS. BUT I CAN GET BACK TO YOU ON THE
00:31:37EXACT SPECIFICS OF THAT. AT THE MOMENT, I'M NOT RECALLING
00:31:41THE DETAILS OF IT, BUT I KNOW IT IS SOMETHING THAT THAT MATTERS.
00:31:44AND WE'RE LOOKING AT IT. AND THEN ALSO, OF COURSE,
00:31:46ENSURING THAT THE ASSESSMENT IS
00:31:50APPROPRIATELY, APPROPRIATELY CALIBRATED TO THE RISK AND SIZE
00:31:53OF THE INSTITUTION. THANK YOU VERY MUCH.
00:31:57FAMILIES IN THE GREAT STATE OF JERSEY WHERE I'M FROM ARE FEELING SQUEEZED FROM A LOT OF
00:32:01DIRECTIONS AT ONCE. AND A BIG PART OF IT IS THE
00:32:03ECONOMIC UNCERTAINTY RIGHT NOW. THE NATIONAL DEBT JUST HIT $40
00:32:07TRILLION AND IT $3 BILLION A DAY IN INTEREST. THE BOND MARKET IS DONE BEING
00:32:11PATIENT. AND EVERY AMERICAN FAMILY PAYS FOR IT. AND HIGHER MORTGAGE AND CREDIT
00:32:13CARD RATES AND HIGHER INTEREST
00:32:15RATES OVERALL CAR LOANS, EVERYTHING.
00:32:18WORKING FAMILIES BORROW FOR. ON TOP OF THAT, ENERGY PRICES SWING ON EVERY GEOPOLITICAL
00:32:22HEADLINE. MS. MARTIN FROM WHERE YOU SIT, WATCHING THE BOND MARKET EVERY
00:32:26DAY, HOW MUCH OF THE BORROWING COST PRESSURE AMERICANS ARE
00:32:28FEELING TRACES BACK TO OUR FISCAL TRAJECTORY?
00:32:30AND WHAT DOES CONTINUED DEFICIT SPENDING COMBINED WITH VOLATILE
00:32:34ENERGY PRICES, MEAN FOR MARKET STABILITY AND FOR THE COST OF EVERYDAY LIFE? OVER THE NEXT FEW YEARS?
00:32:40FROM OUR PERSPECTIVE, OUR JOB IS TO ENSURE THAT THE MARKETS
00:32:43REMAIN OPEN AND AS EFFICIENT AS
00:32:45POSSIBLE TO ALLOW INDIVIDUAL OIL
00:32:50INVESTORS, INSTITUTIONAL INVESTORS, TO MANAGE WHATEVER
00:32:52RISK, WHATEVER MACROECONOMIC RISK THEY HAVE ON THEIR BOOKS AS
00:32:58EFFICIENTLY AS POSSIBLE. SO TRADE CERTAINTY, EFFICIENT
00:33:01RISK MANAGEMENT ARE INCREDIBLY IMPORTANT.
00:33:03IT'S ACTUALLY WHY WE'VE INVESTED
00:33:07SO MUCH IN OUR INFRASTRUCTURE
00:33:09BECAUSE VOLATILITY HITS AT A
00:33:12MOMENT'S NOTICE AND OUR JOB IS
00:33:14TO ENSURE THAT MARKETS REMAIN
00:33:16OPEN AND TRANSPARENT BECAUSE WE
00:33:19BELIEVE FOR THE MEDIUM TO LONG
00:33:21TERM, THE VALUE OF YOUR INVESTMENT WILL CONTINUE TO
00:33:25ACCELERATE. THANK YOU.
00:33:28IT IS CLEAR AND SWITCHING TOPICS
00:33:30HERE THAT AI IS ADVANCING AT A RAPID PACE.
00:33:33IF WE GET IT RIGHT, IT CAN BE A NET BENEFIT FOR ALL AMERICANS
00:33:36AND HELP ENSURE THE U.S. STAYS AHEAD OF CHINA.
00:33:39BUT I BELIEVE WE NEED PROPER GUARDRAILS TO PROTECT WORKERS
00:33:42AND OUR ECONOMY. SO THAT SERVES AS A TOOL TO MAKE PEOPLE MORE EFFICIENT AND SAFER.
00:33:45AND, OF COURSE, LOOKS OUT FOR OUR NATIONAL SECURITY.
00:33:48DR. HAMILTON, WE'RE ALREADY SEEING ABUSE ON THE FACTORY
00:33:52FLOOR TO CATCH HAZARDS BEFORE THEY CAUSE INJURIES. TAKE THE MOST DANGEROUS AND
00:33:55REPETITIVE TASKS OFF WORKERS PLATES AND TRY TO BOOST
00:34:00PRODUCTIVITY. WHERE'S THE AFL-CIO SEEING AI DEPLOYED IN WAYS THAT BENEFIT
00:34:04WORKERS? AND HOW DO WE ENSURE THAT WORKERS ACTUALLY DO BENEFIT
00:34:06ACROSS INDUSTRIES FROM THIS
00:34:08TECHNOLOGY AND DON'T JUST FIND
00:34:11THEMSELVES OUT OF WORK OR HAVE THEIR PROTECTIONS EXPOSED?
00:34:15AND I WANT TO BE CAREFUL THAT I'M NOT GIVEN THE OFFICIAL AFL-CIO STANCE.
00:34:19I'M OFFERING FROM MY
00:34:21PERSPECTIVE, AND I THINK AFL CIO, ALONG WITH WORKERS IN
00:34:25GENERAL, ARE VERY ACTIVE IN TRYING TO DO JUST THAT, TO
00:34:29UTILIZE A.I. AS THE TOOL TO FACILITATE BETTER WORKPLACE,
00:34:32MORE PRODUCTIVE WORKPLACE AND NOT EXPLOITIVE WORKPLACES.
00:34:36ARE YOU FINDING THAT IT'S OTHER PLACES WHERE YOUR THINKING IS
00:34:40HELPFUL AND ARE MORE THE MORE RISKS AT THIS POINT THAN BENEFITS? HOW ARE YOU ALL SEEING IT?
00:34:44WELL, I THINK RIGHT NOW WE DON'T HAVE THE RIGHT GOVERNING
00:34:48STRUCTURE TO REDEFINE A.I. IN
00:34:50WAYS TO FACILITATE PEOPLE RIGHT NOW.
00:34:52WE HAVE LIKE A BULL APPROACH OF
00:34:56FACILITATING A.I. IN POWER WITHOUT THE PROPER GUARDRAILS,
00:34:59BUT WITH GOOD REGULATIONS, WITH
00:35:01A REDEFINITION. AND I'M WITH YOU IN THE SENSE
00:35:05THAT A.I. IS NOT DOOM AND GLOOM.
00:35:07A I CAN FACILITATE THE
00:35:10CAPABILITIES OF US TO THRIVE. THANK YOU.
00:35:13WITH TARIFFS, WITH THE 50% TARIFF ON CERTAIN CANADIAN PRODUCTS.
00:35:17MS. MARTIN FROM YOUR SEAT AT THE NEW YORK STOCK EXCHANGE, YOU'VE A REAL TIME VIEW OF HOW THIS IS
00:35:21AFFECTING COMPANIES. WHEN A COMPANY FACES A SUDDEN COST INCREASE LIKE A 50% TARIFF.
00:35:26WHAT DO YOU SEE THAN THEM ABSORBING IT OR PASSING IT ON TO
00:35:29CONSUMERS OR WHAT ARE YOU SEEING RIGHT NOW WITH GIVEN ALL THESE TARIFFS?
00:35:32I CAN'T REALLY COMMENT ON HOW
00:35:34ANY ONE COMPANY IS TREATING THIS. I'D BE MORE THAN HAPPY TO FOLLOW
00:35:38UP WITH YOU SEPARATELY. I'D LOVE TO TALK TO YOU ABOUT THAT, IF THAT'S OKAY. PLEASE. THANKS.
00:35:41YIELD BACK. THANK YOU. GENTLEMAN YIELDS BACK. THE CHAIR RECOGNIZES THE GENTLE
00:35:45LADY FROM CALIFORNIA, MRS. KIM, FOR FIVE MINUTES.
00:35:47THANK YOU, CHAIRMAN AND RANKING
00:35:50MEMBER, FOR TODAY'S HEARING. AND I WANT TO THANK ALL OUR WITNESSES FOR JOINING US.
00:35:54YOU KNOW, EARLY THIS YEAR, 150
00:35:57CALIFORNIANS VOICED SHOCKED WHEN
00:35:59THEY RECEIVED MAIL FROM THE
00:36:03COUNTY SAYING THEIR PROPERTY TAX PAYMENTS HAD NOT BEEN RECEIVED,
00:36:06EVEN THOUGH THEY HAD BEEN MAILED ON TIME.
00:36:10IT WAS EVENTUALLY REVEALED THAT
00:36:12FRAUDSTERS HAD STOLEN THEIR CHECKS.
00:36:15THEY WASH THEM AND THEY STOLE THEIR HARD EARNED MONEY. AND LEAVING THEM WITH LATE
00:36:19NOTICES ON THEIR PROPERTY TAXES.
00:36:23THANKFULLY, MY CONSTITUENTS IN ORANGE RIVERSIDE AND SAN BERNARDINO COUNTIES WERE
00:36:28UNAFFECTED BY THESE FRAUDSTERS.
00:36:30THEY GET BOLDER AND WE NEED TO
00:36:33TAKE PROACTIVE ACTION AS A RESULT TO PREVENT THESE KINDS OF
00:36:37SCAMS. SO THAT'S WHY I INTRODUCED STOP
00:36:41PAYMENTS FRAUD ACT TO EMPOWER
00:36:43BANKS TO BE ABLE TO IDENTIFY
00:36:45THOSE CHECK IN WHILE FRAUD TO
00:36:47STOP AMERICANS HARD EARNED MONEY FROM BEING STOLEN FROM THEM.
00:36:51NOT SURE IF YOU HAD A CHANCE TO REVIEW THE BILL, BUT WE WERE
00:36:53TRYING TO GIVE THE FINANCIAL INSTITUTIONS ADDITIONAL TIME.
00:36:57WHEN THERE IS A RED FLAG TO BE ABLE TO GO AFTER THESE TO
00:37:01PROTECT OUR HARD EARNED DOLLARS. SO, MS.
00:37:05GRANGER, HOW DOES GIVING BANKS
00:37:07MORE FLEXIBILITY TO IDENTIFY CHECK AND WIRE FRAUD BETTER
00:37:10PROTECT CONSUMERS? AND MAYBE YOU CAN ALSO TALK ABOUT, YOU KNOW, LIKE WE HAVE
00:37:14NOVEL TECHNOLOGY E.G., LIKE
00:37:16DIGITAL ASSETS, BLOCKCHAIN AND PAYMENT RAILS.
00:37:19SO WHY AREN'T FRAUDSTERS TARGETING CHECKS AND WILES?
00:37:23I THANK YOU, CONGRESSWOMAN, FOR YOUR LEADERSHIP IN THIS ISSUE.
00:37:26WE FIGHTING FRAUD AND SCAMS IS A SIGNIFICANT ISSUE FOR THE
00:37:31FINANCIAL SERVICES INDUSTRY AND AND CONSUMERS.
00:37:34AND FRANKLY, ALL INDUSTRIES. THEY'RE ALL BEING IMPLICATED IN
00:37:38THE FRAUD THAT'S UNDERTAKEN TODAY. AND WE'RE SEEING IT IN MANY
00:37:42DIFFERENT VECTORS, AS YOU NOTED. GOING BACK TO WHAT PEOPLE ARE
00:37:45SURPRISED BY, CHECK WASHING,
00:37:47SOMETHING THAT WE HAVE DEALT WITH PERIODICALLY OVER TIME,
00:37:51FRAUDSTERS ARE GOING TO GO AT WHATEVER THEY CAN.
00:37:55MOST EASILY AND CHEAPLY DO, LIKE ANYTHING ELSE, THEY LIKE TO RUN
00:37:58AN EFFICIENT OPERATION. AND SO WE NEED TO MAKE THAT HARDER.
00:38:02WE NEED TO RAISE THE BAR, IN FACT, THE LEADERSHIP, TO TRY TO
00:38:05PHASE OUT CHECK PAYMENTS IS ALSO
00:38:09SOMETHING THAT THAT WE WELCOME. I MEAN, WE RECOGNIZE THERE ARE MANY CONSUMERS WHO STILL USE
00:38:12THEM, BUT WE NEED TO TO PHASE THAT OUT. SO IT IS IMPORTANT.
00:38:16AND AS YOU LOOK AT THE WE'VE TALKED A LITTLE BIT ABOUT A.I. AT THIS HEARING TO THE CHANGES
00:38:20IN TECHNOLOGY ARE GOING TO MAKE THAT FRAUD EVEN GREATER.
00:38:22SO YOUR BILL IS HUGELY IMPORTANT
00:38:24HOLDS WORK AND THE ABILITY FOR FINANCIAL INSTITUTIONS TO PAUSE
00:38:28AND TAKE A LOOK AT THOSE TRANSACTIONS. BUT A LOT OF OTHER THINGS THAT
00:38:31NEED TO HAPPEN TO INCLUDING TRYING TO STOP THOSE FRAUDSTERS
00:38:35FROM EVEN ACCESSING CONSUMERS TO BEGIN WITH. AND IT'S PRETTY MUCH THE
00:38:39VULNERABLE POPULATION, ESPECIALLY THOSE SENIOR CITIZENS
00:38:41WHO CONTINUE TO STILL RECEIVE
00:38:43THEIR SOCIAL SECURITY CHECKS
00:38:46THROUGH, YOU KNOW, REGULAR HARD
00:38:48CHECKS VERSUS MANY OF THEM, EVEN THOUGH THEY TRANSITION TO
00:38:52RECEIVING THEIR CHECKS, YOU KNOW, DIRECT BANKS DEPOSITS.
00:38:56SO AS THEY CONTINUE TO USE THOSE
00:38:59CHECKS AND WIRES, WE DEFINITELY NEED TO ADVANCE LEGISLATION LIKE
00:39:03MINE TO PROTECT THOSE COMMUNITIES AND PREVENT THOSE
00:39:06FRAUDSTERS FROM CONTINUING TO STORE, STEAL THEIR HARD EARNED
00:39:11DOLLARS. I WANT TO FOCUS ON THE IMPACTS
00:39:13OF THE GENIUS ACT AND THE WORK THAT THIS COMMITTEE HAS DONE TO
00:39:17UNLOCK THE BENEFITS OF DIGITAL ASSETS.
00:39:20SO MR. OCTOBER, I WANT TO SPEAK TO YOU AS WE CONTINUE TO UNPLUG,
00:39:24GIVE HIM OVATION. IT IS CRITICAL THAT THIS INNOVATION IS CENTERED ON
00:39:29MAINTAINING THE DOMINANCE OF U.S. DOLLAR. SO ALMOST EVERY SINGLE
00:39:33STABLECOIN IS MINTED IN U.S. DOLLARS.
00:39:36SO WHAT ARE THE DAMAGES IF WE FAIL TO CONTINUE TO UNPLUG
00:39:40INNOVATION IN A FOREIGN ALTERNATIVE TAKES OVER THE
00:39:44STABLE COIN ISSUANCE? WELL, THANK YOU FOR YOUR LEADERSHIP ON ALL OF THESE
00:39:48ISSUES. IT COULD BE POTENTIALLY VERY
00:39:51DAMAGING TO THIS NATION IF THE
00:39:53DOLLAR AND GENIUS STABLECOINS DO
00:39:57NOT RISE AND BECOME, YOU KNOW,
00:39:59THE DOMINANT CURRENCY ON WHAT WE CALL THE INTERNET FINANCIAL
00:40:04SYSTEM. SO NUMBER ONE, GENIUS ACT SETS
00:40:07THAT GLOBAL STANDARD. SO THE DOLLAR IS STRONG. EVERYTHING IS BACK ONE FOR ONE.
00:40:11AND IT ALSO ENSURES THAT THE
00:40:13DOLLAR WILL BE MAINTAINED AND
00:40:16U.S. LAW WILL FOLLOW THAT DOLLAR EVERYWHERE IT GOES.
00:40:18CAN YOU JUST TALK ABOUT SOME OF
00:40:20THE THE BENEFITS STABLECOINS
00:40:23GIVE TO THE AMERICAN BUSINESSES
00:40:26IN TERMS OF MAKING PAYMENTS AND SETTLING TRANSACTIONS MORE
00:40:30EFFICIENTLY? STABLECOIN ALLOWS YOU TO SEND A
00:40:33DOLLAR IS EASILY AS YOU SEND AN
00:40:35EMAIL SAFE, SECURE AND INSTANTANEOUSLY.
00:40:39AND SO WHAT THAT DOES IS IT REDUCES THE FRICTION OF SENDING
00:40:43MONEY. NUMBER ONE, THE TIME BUSINESS IS DON'T HAVE TO WAIT 2 TO 3 DAYS
00:40:46TO GET THEIR MONEY AND CONSUMERS.
00:40:49AND SECONDLY, VIRTUALLY NO FEES. SO ALL OF THOSE INTERCHANGE
00:40:53FEES, TWO, 3% THAT CAN REALLY EAT INTO A SMALL BUSINESS'S
00:40:56PROFITS GO AWAY WHEN YOU USE STABLECOINS. THANK YOU VERY MUCH.
00:41:00MY TIME IS UP. I YIELD BACK. THE GENTLELADY YIELDS BACK.
00:41:04THE CHAIR RECOGNIZES THE GENTLE LADY FROM GEORGIA. MS. WILLIAMS, FOR FIVE MINUTES.
00:41:08THANK YOU, CHAIRMAN HILL AND RANKING MEMBER WATERS FOR
00:41:11CONVENING TODAY'S HEARING. STRENGTHENING THE AMERICAN ECONOMY.
00:41:14SO LET'S TALK ABOUT IT. PROFESSOR HAMILTON, I'M GOING TO
00:41:18HAVE A FEW QUESTIONS FOR YOU. SO LET ME START WITH THREE NUMBERS.
00:41:21IN METRO ATLANTA, MEDIAN RENT IS NOW OVER $1,700 A MONTH.
00:41:24AND I KNOW SOME OF YOU'RE THINKING THAT'S NOT THAT MUCH.
00:41:28BUT COME TO THE SOUTH AND YOU'RE EXPECTING LOW RENT.
00:41:30Y'ALL, YOU'RE EXPECTING TO LIVE IN AFFORDABLE LIFE.
00:41:34GAS IS PUSHING TOWARDS $5 A
00:41:36GALLON AND THIS YEAR, FOR THE FIRST TIME IN THREE YEARS, REAL
00:41:41WAGES ACTUALLY FELL. THAT MEANS PAYCHECKS BUY LESS
00:41:44THAN THEY DID 12 MONTHS AGO. AND MORE AMERICANS ARE
00:41:47CONTINUING TO EXPERIENCE MORE
00:41:49MONEY THAN MONEY WRAPPED CHICKENS.
00:41:52MY COLLEAGUES HERE, THEY WANT TO PAT THEMSELVES ON THE BACK FOR
00:41:54THIS ECONOMY. AND SURE, IF YOU'RE IN THE FINANCIAL DISTRICT IN NEW YORK
00:41:58CITY OR SILICON VALLEY, IT'S BEEN A GREAT RUN.
00:42:02BUT THAT'S NOT WHO I'M THINKING
00:42:05ABOUT WHEN I'M MAKING DECISIONS EVERY DAY. AS A MEMBER OF THE UNITED STATES
00:42:09CONGRESS, I'M THINKING ABOUT THOSE FAMILIES THAT CALL DEKALB COUNTY HOME.
00:42:13RIVERDALE OR ATLANTA, WHERE FAMILIES ARE WORKING FULL TIME
00:42:16AND STILL FALLING BEHIND. WHERE FAMILIES ARE CHOOSING
00:42:20BETWEEN GAS, MONEY, GROCERIES,
00:42:22SCHOOL SUPPLIES AND USING BUY
00:42:24NOW PAY LATER PRODUCTS JUST TO FLOAT THEM FROM ONE PAYCHECK TO THE NEXT.
00:42:29WHY? WELL, PRESIDENT TRUMP'S NATIONAL
00:42:32SECURITY ADVISER SAID CONSUMER
00:42:34PAIN OVER THE IRAN WAR IS THE LAST OF THEIR CONCERNS.
00:42:38SO MY QUESTIONS ARE KIND OF SIMPLE.
00:42:41HOW HAS THIS ECONOMY THAT MY REPUBLICAN COLLEAGUES ARE
00:42:45BRAGGING ABOUT ACTUALLY HELPED MAKE AND STITCH ONCE AND THE
00:42:48GREATER BROADLY, AMERICAN PEOPLE? I LIKE TO KNOW FROM YOU,
00:42:52PROFESSOR, WHETHER THE DATA ACTUALLY BACKS UP THEIR
00:42:55ASSERTIONS. PROFESSOR HAMILTON, THE ADMINISTRATION'S TERRORISTS HAVE
00:42:59ADDED ABOUT $2,500 A YEAR TO THE AVERAGE HOUSEHOLD'S GROCERY
00:43:02BILL, HITTING STAPLES LIKE BEEF
00:43:04COFFEE AND PRODUCE IS FOR A MOM IN MY DISTRICT DOING QUICK
00:43:07MENTAL MATH IN THE CHECKOUT LINE. SHE'S NOT THINKING ABOUT TRADE
00:43:11POLICY, BUT WHETHER SHE CAN AFFORD GROCERIES. THIS WEEK.
00:43:14WHAT DOES THE SUSTAINED POLICY DRIVEN INCREASE IN THE COST OF
00:43:17JUST FEEDING YOUR FAMILY DUE TO A HOUSEHOLD? THE ABILITY TO SAVE ANYTHING AT
00:43:23ALL.
00:43:25THINK THE ECONOMY IS TRENDING DOWN. WITHOUT A DOUBT.
00:43:28PARTICULARLY FOR YOUR CONSTITUENTS, IT'S ALSO A MISSED
00:43:32OPPORTUNITY. IT IS CAPTURED IN OUR GROWTH
00:43:35STATISTICS, BUT ALSO HIDDEN
00:43:37BECAUSE WE DON'T THIS AGGREGATE BY DISTRIBUTION.
00:43:40THOSE THAT ARE NOT DOING SO WELL.
00:43:42FOR EXAMPLE, NEW YORK CITY GOES WELL BEYOND WALL STREET.
00:43:46THERE ARE A LOT OF PEOPLE IN NEW YORK CITY THAT COULD BE DOING A
00:43:49LOT BETTER IF WE HAD GREATER INVESTMENTS IN DIFFERENT
00:43:54PRIORITIES. IF WE HAD PRIORITIES WHERE WE
00:43:56WOULD LITERALLY PUT THE AMERICAN PEOPLE FIRST.
00:43:59PROFESSOR, SINCE THIS AN
00:44:03AUTHORIZE RUN WAR BEGAN, GAS PRICES HAVE JUMPED MORE THAN 50%.
00:44:06AND PRESIDENT TRUMP HAS TOLD AMERICANS PAYING MORE AT THE
00:44:09PUMP JUST REMEMBER WHY HE'S ALSO KEPT TARIFFS IN PLACE THAT
00:44:13ECONOMISTS SAY ARE ADDING TO FUEL AND SHIPPING COSTS. FOR A WORKING MOM IN MY
00:44:17DISTRICT, DRIVING 30 OR 40 MINUTES EACH WAY TO THEIR JOB.
00:44:20THAT'S A REAL MONEY OUT OF THEIR POCKETS EVERY SINGLE WEEK.
00:44:24CAN YOU SPEAK TO WHAT THIS CONSISTENT PRICE SHOCK IS LIKE TO A FAMILY?
00:44:29THERE'S INSTABILITY WITH REGARDS TO WHETHER WE HAVE TARIFFS ON OR
00:44:34OFF. BUT BROADLY SPEAKING, AMERICANS
00:44:36ARE FACING HIGH PRICES.
00:44:38AND AS YOU POINTED OUT, WAGES AREN'T KEEPING UP.
00:44:42AND THAT INSTABILITY ISN'T JUST ON FAMILIES.
00:44:45I'VE HEARD FROM I REPRESENT A LOT OF LARGE CORPORATIONS BASED
00:44:49IN HEADQUARTERS RIGHT IN ATLANTA.
00:44:51AND IT'S NOT ABOUT IF THEY WANT
00:44:53TO PAY TARIFFS, BUT LET'S HAVE SOME STABILITY SO THAT PEOPLE
00:44:57CAN PLAN AND MAKE PROJECTIONS.
00:44:59AND THAT GOES ACROSS THE BOARD.
00:45:01BUT FINALLY, PROFESSOR, WHILE FAMILIES DEAL WITH ALL OF THIS,
00:45:04MY REPUBLICAN COLLEAGUES MARKED UP LEGISLATION TO STRIP THE
00:45:08FEDERAL RESERVE OF ITS OBLIGATION TO FOCUS ON JOBS.
00:45:10CUT THE CFP FUNDING NEARLY IN
00:45:12HALF AND MOVE TO CUT ITS STAFF.
00:45:15THIS IS THE VERY AGENCY THAT'S SUPPOSED TO STOP PEOPLE FROM
00:45:19GETTING SCAMMED. AND THROUGH IT ALL, PRESIDENT TRUMP HAS CALLED AFFORDABILITY
00:45:23CONCERNS A HOAX. THAT DOESN'T MEAN ANYTHING TO ANYBODY.
00:45:26WELL, LET ME TELL YOU, IT MEANS A LOT TO THE PEOPLE THAT OUR
00:45:30REPRESENT. PROFESSOR, WHEN PEOPLE ARE WRITING THE RULES.
00:45:32WHEN PEOPLE WRITING THE RULES TAKE THE POSITION THAT THIS
00:45:36ISN'T A REAL PROBLEM, WHAT HAPPENS TO FAMILIES?
00:45:39YEAH, I THINK A BIG BROAD POINT
00:45:41IS WE DON'T ASK THAT QUESTION. FOR WHOM WE NEED TO THINK ABOUT
00:45:45THE FOR WHOM AND MAKE SURE THAT IT IS INCLUSIVE. AND AS YOU POINTED OUT, IT ISN'T
00:45:49JUST FAMILIES, CORPORATIONS THEMSELVES, WHEN THEY HAVE
00:45:53INSTABILITY, WHEN THEY HAVE
00:45:57INSTABILITY AND HIGH PRICES, IT REVERBERATES. THANK YOU SO MUCH.
00:46:00WHAT I HEAR FROM YOU IS WHAT I HEAR FROM MY CONSTITUENTS EVERY DAY.
00:46:04THIS ISN'T ABOUT NUMBERS ON A CHART. IT'S ABOUT WHETHER A FAMILY CAN
00:46:07KEEP THEIR HEAD ABOVE WATER. THANK YOU. AND I YIELD BACK. THE GENTLELADY YIELDS BACK.
00:46:11THE CHAIR RECOGNIZES THE GENTLEMAN FROM WISCONSIN, MR.
00:46:14FITZGERALD, FOR FIVE MINUTES. THANK YOU, CHAIRMAN, AND THANK YOU FOR BEING HERE TODAY.
00:46:18I KNOW YOU'VE BEEN HERE FOR THREE HOURS, SO AND I KNOW THERE'S SOME REDUNDANCY IN THE
00:46:22QUESTIONS WHEN YOU GET TO THIS POINT.
00:46:25BUT TO PRESIDENT HER, I JUST
00:46:29WANTED TO DIG A LITTLE BIT DEEPER IN TO THE THE IDEA THAT
00:46:33THE REGULATORS HAVE ALREADY TAKEN SOME STEPS TO KIND OF TAILOR THE SUPERVISION OF
00:46:37COMMUNITY BANKS.
00:46:40CAN YOU JUST EXPLAIN WHY IT'S
00:46:42IMPORTANT FOR CONGRESS TO GO IN AND CODIFY THOSE REFORMS IN LAW
00:46:48RATHER THAN LEAVE THEM SUBJECT TO CHANGE FROM ONE ADMINISTRATION TO THE NEXT?
00:46:52I THINK SOMETIMES WE LOSE KIND
00:46:54OF THAT BACK AND FORTH.
00:46:56WE'RE NOT WATCHING IT CLOSELY.
00:46:58AND AS A RESULT OF THAT, IT'S
00:47:02HARD TO REALLY JUDGE WHAT'S HAPPENING KIND OF IN THE PRIVATE SECTOR.
00:47:06CONGRESSMAN, THANK YOU SO MUCH FOR THAT QUESTION AND HIGHLIGHTING THAT IMPORTANT ISSUE.
00:47:09AND IT REALLY IS TRUE. WHAT WE NEED FOR THE BANKING
00:47:15INDUSTRY, THAT IS TO SERVE OUR CUSTOMERS AND OUR COMMUNITIES IS
00:47:17THAT CERTAINTY AND DURABILITY.
00:47:19AND AS MUCH AS THE REGULATORS
00:47:22CAN GO IN AND I DO BELIEVE THEY'RE DOING A LOT OF THE RIGHT
00:47:26THINGS TO TRY TO RECALIBRATE AND
00:47:28RIGHT SIZE REGULATORY THRESHOLD,
00:47:31THE ONES THAT THEY CAN AND THE NEXT PERSON COMING INTO THAT SEAT CAN MAKE A CHANGE.
00:47:36AND SO HAVING CONGRESS WEIGHING IN AND RECOGNIZING THE
00:47:39IMPORTANCE OF HAVING BANKS OF
00:47:41ALL SIZES OPERATING, OF TAYLORS
00:47:43IN THE REGULATORY REGIME SO THAT THE LOCAL COMMUNITIES CAN BE
00:47:48SERVED BY BANKERS WHO UNDERSTAND
00:47:50THEM AND CAN REALLY DRIVE LOCAL DECISION MAKING AND PROVIDING
00:47:54THE CREDIT NEEDS OF FARMERS AND FAMILIES AND SMALL BUSINESSES LOCALLY.
00:47:58IT'S A HUGE BENEFIT OF THE AMERICAN SYSTEM AND ONE THAT,
00:48:01AGAIN, CONGRESS RIGHTFULLY CAN CAN WEIGH IN ON.
00:48:04AND THANKFULLY HAS IN SEVERAL
00:48:06PROVISIONS IN THE BIPARTISAN
00:48:08PLAN ROAD TO HOUSING ACT AND CERTAINLY THAT IN THE MAIN STREET CAPITAL ACCESS BILL.
00:48:12SO WE ENCOURAGE CONTINUED ACTION ON THOSE ON THOSE BILLS.
00:48:16THANK YOU VERY MUCH, CHAIRMAN. I'M GOING TO YIELD BACK THE BALANCE OF MY TIME.
00:48:20GENTLEMAN YIELDS BACK. I RECOGNIZE MYSELF NOW FOR FIVE MINUTES.
00:48:24I FIRST WANT TO THANK YOU AND EVERYBODY HERE FOR BEING HERE TODAY.
00:48:27I THINK IT IS CLEAR THERE'S NOT A COMMITTEE IN CONGRESS THAT HAS DONE MORE TO ADDRESS
00:48:32AFFORDABILITY IN THE 119TH CONGRESS THAN THE HOUSE FINANCIAL SERVICES COMMITTEE.
00:48:36AND WE'VE DONE IT IN A
00:48:38BIPARTISAN FASHION BETWEEN THE WORKING FAMILIES, TAX CUTS IN
00:48:41THE 21ST CENTURY, ROAD TO HOUSING ACT. WE HAVE DELIVERED REAL RESULTS FOR THE AMERICAN PEOPLE.
00:48:45I'M ESPECIALLY PROUD OF THE WORK
00:48:48WE PASSED WITH THE 21ST CENTURY ROAD TO HOUSING ACT, WHICH WAS
00:48:51THE MOST TRANSFORMATIVE PIECE OF HOUSING LEGISLATION IN DECADES.
00:48:54THIS BILL WAS ONLY PASSED INTO LAW BECAUSE OF STRONG BIPARTISAN
00:48:58COLLABORATION. IT'S THE WAY CONGRESS IS
00:49:01SUPPOSED TO WORK.
00:49:02MR. POLLACK, IN YOUR TESTIMONY,
00:49:05YOU ALSO SHOWCASE JUST HOW MUCH THIS BILL I'M TALKING ABOUT WILL
00:49:09IMPACT HOUSING AFFORDABILITY AND HOW IT HAS REFLECTED, QUOTE,
00:49:12YEARS OF BIPARTISAN, BICAMERAL COLLABORATION, END QUOTE.
00:49:15HOWEVER, THERE IS MORE TO BE DONE TO ADDRESS FEDERAL
00:49:18GOVERNMENT BARRIERS TO GREATER HOUSING DEVELOPMENT.
00:49:20FOR EXAMPLE, MY LEGISLATION WITH REP GOODLANDER AND THE BUILD
00:49:26HOUSING AFFORDABILITY ACT WOULD TEMPORARILY PAUSE THE
00:49:29IMPLEMENTATION OF BUILD AMERICA,
00:49:31BUY AMERICA ACT ON AFFORDABLE HOUSING UNTIL A STUDY IS
00:49:33COMPLETED ON ITS EFFECTS.
00:49:35THEN ONCE THOSE REQUIREMENTS ARE RETURNED, HUD WOULD BE ON THE
00:49:39CLOCK TO APPROVE OR DENY WAIVERS IN 90 DAYS.
00:49:41IN YOUR OPINION, HOW WOULD
00:49:43POLICY CHANGES LIKE THIS INFLUENCE AFFORDABILITY?
00:49:46AND ARE THERE OTHER REFORMS YOU CAN THINK OF THAT WE STILL NEED TO ADDRESS?
00:49:50THANKS, CONGRESSMAN. I THINK, OF COURSE, IT'S RIGHT
00:49:53TO KEEP WORKING ON THIS. IT'S NEVER DONE.
00:49:56WE HAVE A LONG WAY TO GO TO A
00:49:57REALLY VIBRANT.
00:50:01SYSTEM WITH WITH THE MAXIMUM AFFORDABILITY.
00:50:04I DO HAVE ONE PARTICULAR ITEM, AND IT'S SOMETHING YOU AND I
00:50:08HAVE TALKED ABOUT IN THE PAST,
00:50:10AND THAT IS THE ABILITY OF
00:50:14BORROWERS WITH OLD CHEAP
00:50:16MORTGAGES WHO ARE NOW SITTING ON HOUSES SO THEY DON'T COME ON THE
00:50:21MARKET AND IT SUPPRESSES SUPPLY
00:50:23IN AND HURTS AFFORDABILITY. WHETHER THOSE BORROWERS COULD,
00:50:26IN FACT YOU FEES THOSE MORTGAGES. I DON'T KNOW IF YOU SAW THE LAST
00:50:31PARAGRAPH IN MY WRITTEN TESTIMONY, CONGRESSMAN, BUT I
00:50:33POINT OUT THAT THAT CONCEPT WHICH WE HAVE DISCUSSED AND
00:50:37WHICH PAUL KUBIAK, MY COLLEAGUE AND I WROTE ON, WE HAVE
00:50:41DISCOVERED A COMPANY THAT'S ACTUALLY DOING THIS IN THE
00:50:44AMERICAN MARKET PRINCIPALLY WITH
00:50:50MORTGAGE LENDERS WHO KEEP THE MORTGAGES IN PORTFOLIO IS A GOOD
00:50:53EXAMPLE OF THE COMMUNITY BANK IDEA AND THEREFORE CAN DO
00:50:57CREATIVE THINGS WITH THEIR CUSTOMERS. IF YOU IF YOU WANT TO BE
00:51:01INTERESTED IN THAT, I'D LOVE TO GET YOU SOME MORE INFORMATION ON. WELL, I APPRECIATE THAT BECAUSE
00:51:05I WENT DOWN A RABBIT HOLE ON THE IDEA OF DEFICITS.
00:51:09AND ONE OF THE CHALLENGE IS THAT I AM CONCERNED ABOUT BECAUSE I
00:51:11DO REALLY LIKE THE CONCEPT. AND I THINK IT'S WORKING IN
00:51:16COUNTRIES LIKE DENMARK. YES. AND I DON'T KNOW WHO THIS
00:51:18COMPANY IS OR HOW THEY'RE ACTUALLY DOING IT, BUT ARE THEY HOW DO THEY HOW DOES THAT
00:51:22RECONCILE WITH THE MORTGAGE BACKED SECURITY? I MEAN, IF YOU'RE HOLDING
00:51:26MORTGAGE BACKED SECURITIES AND SUDDENLY YOU THINK YOU'VE GOT COLLATERAL AND X, BUT YOU REALLY
00:51:29GOT COLLATERAL, AND WHY? HOW DO THEY NAVIGATE THAT?
00:51:33THE MORTGAGE BACKED SECURITY MAKES IT HARDER. THIS WORKS ACTUALLY, WITH
00:51:37LENDERS WHO HAVE THE LOAD IN PORTFOLIO SO AND WHO CAN DEAL
00:51:40WITH THEIR CUSTOMERS AND END UP
00:51:42IN A WAY WHERE THE CUSTOMER GETS
00:51:45THE VALUE OF THE MORTGAGE.
00:51:48THAT IS TO SAY, YOU BASICALLY
00:51:50CAN REFINANCE AT MARKET AS OPPOSED TO AT PAR.
00:51:54BUT THE BUT THE LENDER IS
00:51:56COMPLETELY HAS ALL THE SAME CASH FLOWS HE HAD BEFORE.
00:52:00WELL, THAT MAKES SENSE. I'D LOVE TO COME SEE AND TALK ABOUT THAT. THAT MAKES SENSE.
00:52:04IF THE IF THE LENDER IS HOLDING THE MORTGAGE AND THEY HAVEN'T
00:52:07PUT IT ON THE SECONDARY MARKET,
00:52:08WHAT PERCENTAGE OF OF MORTGAGE
00:52:11LOANS IN AMERICA AREN'T TOUCHING THE SECONDARY MARKET OR THE G
00:52:14TWO SECONDARY MARKET IS DOMINANT, BUT THERE ARE STILL A LOT OF THERE IS STILL A LOT OF
00:52:18PORTFOLIO LENDERS AND LOANS IN PORTFOLIO. THE TWO FOR WHICH THIS THIS
00:52:22COULD BE INTERESTING IS VERY NEW. IT'S JUST BEING INTRODUCED.
00:52:25BUT I THINK AS A PIECE OF
00:52:29DEVELOPMENT, IT'S QUITE INTERESTING.
00:52:31MAYBE IF YOU ARE GRANTED A FAST PASS TO COME INTO MY OFFICE AND
00:52:35EXPLAIN THIS BECAUSE I AM INTRIGUED BY THE CONCEPT.
00:52:38YOU KNOW, WHAT I THINK IS MORE IMPORTANT TO ME THAN ANYTHING
00:52:41ABOUT THIS CONGRESS IS THAT TOGETHER, THE LEADERS OF THE
00:52:44DEMOCRATS AND THE REPUBLICANS WITH THE RANKING MEMBER WHO'S SITTING TO MY RIGHT AND OUR
00:52:49CHAIRMAN, MR. CLEAVER, WE ALL WORKED WITH A SENSE OF
00:52:53CREATIVITY TO TRY AND FIND ANSWERS TO THESE QUESTIONS. AND THERE ARE MORE QUESTIONS
00:52:56THAT WE NEED ANSWERS FOR AND IT'S GOING TO BE A LONG TIME FOR
00:53:01SOME PEOPLE BEFORE THEY EVER CONSIDER SELLING THEIR HOME. WHEN YOUR CURRENT 30 YEAR FIXED
00:53:06RATE IS 2.9% AND THAT COULD HAVE A DECADE LONG PLUS PROBLEM.
00:53:11YOU KNOW, FOR US. SO I'M GLAD. MR. POLLOCK, THAT YOU ARE STILL
00:53:14INTERESTED IN DEFEASANCE, AND I LOOK FORWARD TO LEARNING MORE.
00:53:18WITH THAT, I YIELD BACK.
00:53:19THE CHAIR NOW RECOGNIZES THE GENTLEMAN FROM FLORIDA, MR.
00:53:25HARIDOPOLOS FOR FIVE MINUTES.
00:53:28WELL, THANK YOU, MR. CHAIRMAN. ALWAYS GREAT TO BE HERE AND
00:53:32APPRECIATE YOUR PATIENCE WITH ME, IF THAT'S RIGHT.
00:53:35AND AS FAR AS WANTED TO GET INTO
00:53:39SOME OF THE ISSUES AND YOUR. GOOD TO SEE YOU AGAIN.
00:53:44HOW DO EXCESSIVE OR POORLY TAILORED REGULATION TRANSLATE
00:53:47INTO FEWER LOANS AND HIGHER COST? HER MAIN STREET BUSINESSES AND
00:53:51COULD RIGHT SIZING THE REGULATORY FRAMEWORK ALLOW THOSE
00:53:54BANKS TO PUT MORE OF THEIR RESOURCES TOWARDS LENDING AND
00:53:57KEEPING PEOPLE IN HOMES? THANK YOU, CONGRESSMAN.
00:53:59A CRITICALLY IMPORTANT TOPIC AND ALWAYS GOOD TO SEE YOU.
00:54:02SO I'D SAY THAT THE WORK THAT
00:54:06THE CONGRESS HAS BEEN DOING, THAT THE REGULATORS HAVE BEEN
00:54:08DOING TO RIGHT SIZE REGULATION IS MAKING A BIG DIFFERENCE.
00:54:11I KNOW IT'S MAKING A BIG DIFFERENCE IN FLORIDA AND IN YOUR DISTRICT AS OUR BANK
00:54:14MEMBERS ARE TALKING ABOUT THE
00:54:17OPPORTUNITY TO FOCUS ON EXACTLY
00:54:20WHAT THEIR CUSTOMERS NEED AND
00:54:24ACTUALLY ABLE TO BE FOCUSED ON CUSTOMER SERVICE, ON TECHNOLOGY,
00:54:26ON INVESTMENT IN THEIR OPERATIONS, AS OPPOSED TO FOCUS
00:54:30SOLELY ON COMPLIANCE AND CHECK THE BOX EXERCISES.
00:54:34SOME KEY REGULATORY CHANGES THAT
00:54:37WERE SO OUTDATED.
00:54:39AND THEY WERE SET IN THE 1970S,
00:54:42ONE IN PARTICULAR THAT I KNOW WOULD RESONATE TO FOR COMMUNITY
00:54:45BANK IN YOUR DISTRICT IS THAT
00:54:48YOU THERE WERE LIMITS UNDER REGO
00:54:50APPROPRIATELY SO ON INSIDER
00:54:52LENDING SO BANKS LEADERSHIP
00:54:55BEING ABLE TO USE THE PRODUCTS AND SERVICES THAT THEIR BANK SELLS BUT WHEN THEY CAN'T
00:54:59ACTUALLY EVEN HAVE A CREDIT CARD
00:55:01FROM THEIR BANK BECAUSE THEY'RE LENDING LIMITS $2,500, ALL OF
00:55:04THEIR CUSTOMERS ARE SAYING, WHY DON'T YOU USE THE CREDIT CARD
00:55:08THAT YOU ACTUALLY YOU'RE TRYING TO SELL TO ME?
00:55:10SO REGO CHANGES WHERE A SIGNIFICANT IN THAT AREA TOO SO
00:55:13A LOT OF THINGS THAT JUST DON'T MAKE SENSE THAT ARE BEING
00:55:17ADDRESSED TODAY THANKFULLY. AND GETTING BACK TO YOUR
00:55:21QUESTION ABOUT BANKING, WHAT ARE WHAT ARE THE YOUR CUSTOMERS
00:55:23TELLING YOU RIGHT NOW IS THE BIGGEST CHALLENGE THEY'RE FACING
00:55:27AS THEY COME IN AND LOOK FOR A BUSINESS LOAN, A HOME LOAN, A PERSONAL LOAN? WHAT ARE THEY TELLING YOU RIGHT
00:55:31NOW? YES.
00:55:31IN TERMS OF WHERE THE ACTIVITY
00:55:36AND WHERE THE ECONOMY IS IN THEIR MIND AND WHAT WE COULD DO,
00:55:39CAN YOU DO SOME OF THE GOOD WORK THAT OUR CHAIRMAN OR OUR SUB
00:55:41CHAIRMAN TODAY DID ON AFFORDABLE HOUSING OTHERWISE? YES, I KNOW.
00:55:45I'D SAY THEY'RE SAYING AGAIN THAT THE ACTIVITY IS IS
00:55:49POSITIVE, THAT GENERALLY THERE'S
00:55:52A LOT OF OPTIMISM FROM THEIR CLIENTS AND CUSTOMERS COMING TO
00:55:55SEE THEM AND THEIR TAKING ADVANTAGE OF THE PRODUCTS AND
00:55:59SERVICES THAT THE BANKS ARE OFFERING. I THINK WE ARE EXCITED, TOO,
00:56:02ABOUT THE CHANGES WHEN IT COMES TO THE DIGITAL ASSET SPACE TOO.
00:56:06AN INNOVATION. AND IN TERMS OF WHAT THAT CAN
00:56:10OFFER TO BANK CUSTOMERS GOING FORWARD. GREAT. THANK YOU.
00:56:14WHAT ARE THE ISSUES THAT I WORKED ON LAST YEAR?
00:56:16WAS THE IS THE GREEN LIGHTING GROWTH ACTIVITIES? THAT IS PART OF THE COMMITTEE'S
00:56:20INVEST ACT AND MAKING SURE THAT SOME OF THOSE SMALLER COMPANIES
00:56:24HAVE HAD THE ABILITY TO MOVE UP, WHETHER IT BE BY PURCHASING
00:56:27OTHER COMPANIES OR NOT HAVING SO MUCH PAPERWORK SO THEY CAN
00:56:31COMPETE WITH THE BIGGER COMPANIES ALONG THE WAY. WHERE DO YOU ALL SEE THE INVEST
00:56:36THAT GOING IN THE FUTURE? I'M NOT SURE I WOULD ANSWER THAT
00:56:40BEST.
00:56:40MAYBE LEND I THINK WE AGAIN
00:56:46APPLAUD THE THE FACT THAT THE
00:56:48INVEST ACT WAS ADDRESSING A
00:56:50COUPLE OF ISSUES THAT WE AGREE WITH IN MARKETS AND ONE
00:56:54BROADENING OF ACCESS FROM AN INVESTMENT STANDPOINT TO
00:56:58INVESTORS OF ALL SHAPES AND SIZES, BUT THEN ALSO PAVING THE
00:57:01WAY FOR COMPANIES TO TAP OUR
00:57:03PUBLIC MARKETS A LOT QUICKER.
00:57:06SO WHERE INCREDIBLY OPTIMISTIC
00:57:08ABOUT THE PRINCIPLES THAT ARE
00:57:11SET FORTH, I CAN'T SPECIFICALLY GO INTO ANY ONE PROVISION, BUT
00:57:14I'D LOVE TO TALK TO YOU ABOUT IT MORE. WELL, IT'S DIFFERENT.
00:57:18I THANK YOU FOR YOUR TIME TODAY AND WE ARE EXCITED THAT THIS
00:57:22COMMITTEE HAS DONE SOME PRODUCTIVE WORK, ESPECIALLY WITH AFFORDABLE HOUSING AND OF COURSE, ON SOME OF THE CRYPTO
00:57:27LEGISLATION AND THROUGHOUT. AND IT'S IT'S IT'S NICE TO SEE THAT THOSE SMALLER COMMUNITY
00:57:30BANKS HAVE THE ABILITY TO COMPETE NOW WITH THIS ENERGY SIMPLY DIDN'T HAVE IN THE PAST
00:57:34BECAUSE THIS VISION IS MADE BY DODD FRANK AND OTHERS. AND I HOPE WE CAN CONTINUE THIS
00:57:39TREND WHERE WE MAKE THIS MORE COMPETITIVE FIELD IN THE WAY WE
00:57:41REDUCE PRICES SIMPLY BY OFFERING MORE COMPETITORS. AND WITH THAT, MR. CHAIRMAN, I
00:57:45APPRECIATE THE OPPORTUNITY TO SPEAK TODAY AND I YIELD BACK. GENTLEMAN YIELDS BACK.
00:57:49THE CHAIR NOW RECOGNIZES MY QUESTIONS.
00:57:54I WOULD LIKE TO THANK ALL THE WITNESSES FOR THEIR TESTIMONY TODAY. WITHOUT OBJECTION, ALL MEMBERS
00:57:58WILL HAVE FIVE LEGISLATIVE DAYS TO SUBMIT ADDITIONAL WRITTEN QUESTIONS FOR THE WITNESSES TO
00:58:01THE CHAIR. THE QUESTIONS WILL BE FORWARDED TO THE WITNESSES FOR THEIR RESPONSE.
00:58:06WITNESSES, PLEASE RESPOND. NO LATER THAN OCTOBER 7TH, 2026.
00:58:11I ASK UNANIMOUS CONSENT TO ENTER INTO THE RECORD.
00:58:14SEVERAL STATEMENTS WERE RECEIVED OUTLINING MAJOR CONCERNS WITH
00:58:17THE REPUBLICAN BILL POSTED FOR
00:58:19THIS HEARING AND A NEW ONE THAT WOULD UNDERMINE THE CONSUMER
00:58:23FINANCIAL PROTECTION BUREAU. THESE TO MR. FROM THE NATIONAL
00:58:27CONSUMER LAW CENTER. THE CONSUMER FEDERATION OF
00:58:30AMERICA, THE ACP, THE CENTER FOR
00:58:32RESPONSIBLE LENDING, AND MORE. WITHOUT OBJECTION, THE
00:58:37SERIOUSNESS NOW ADJOURNED FOR
00:58:39THE DAY.
00:58:48I. TUESDAY LIVE AT 9 A.M. EASTERN ON C-SPAN THREE.
00:58:52THE SENATE JUDICIARY COMMITTEE HEARS FROM FBI DIRECTOR CASH
00:58:56PATEL DURING A HEARING ON OVERSIGHT OF THE FEDERAL BUREAU OF INVESTIGATION.
00:59:00WATCH IT LIVE TUESDAY MORNING AT NINE EASTERN ON C-SPAN, THREE C-SPAN.
00:59:04NOW OUR FREE MOBILE VIDEO APP,
00:59:05OR ONLINE AT C-SPAN DOT ORG.
00:59:11THERE ARE MANY WAYS TO LISTEN TO
00:59:13C-SPAN RADIO ANYTIME, ANYWHERE
00:59:15IN THE WASHINGTON, D.C. AREA. LISTEN ON 90.1 FM.
00:59:19USE OUR FREE C-SPAN NOW APP OR GO ONLINE TO C-SPAN DOT ORG,
00:59:22SLASH RADIO ON SIRIUS XM RADIO ON CHANNEL 455.
00:59:26THE TUNE IN APP AND ON YOUR SMART SPEAKER BY SIMPLY SAYING
00:59:30PLAY C-SPAN RADIO. HERE ARE LIVE CALL IN PROGRAM
00:59:33WASHINGTON JOURNAL DAILY AT 7 P.M. EASTERN. LISTEN TO HOUSE AND SENATE
00:59:36PROCEEDINGS COMMITTEE HEARINGS, NEWS CONFERENCES, AND OTHER
00:59:40PUBLIC AFFAIRS EVENTS LIVE THROUGHOUT THE DAY. AND FOR THE BEST WAY TO HEAR
00:59:44WHAT'S HAPPENING IN WASHINGTON WITH FAST PACED REPORTS, LIVE
00:59:46INTERVIEWS AND ANALYSIS OF THE DAY.
00:59:48CATCH WASHINGTON TODAY, WEEKDAYS AT 5 P.M. AND 9 P.M. EASTER.
00:59:53LISTEN TO C-SPAN PROGRAMS ON
00:59:55C-SPAN RADIO ANYTIME, ANYWHERE.
00:59:58C-SPAN DEMOCRACY UNFILTERED.
01:00:04AND NOW KEVIN WARSH GIVES HIS FIRST KEYNOTE AS THE FEDERAL
01:00:08RESERVE CHAIR AT THE ANNUAL JACKSON HOLE ECONOMIC POLICY SYMPOSIUM IN WYOMING.
01:00:12HE SAID, QUOTE, I'M IMPRESSED BY THE OVERALL APPEARANCE OF THE
01:00:15ECONOMY, WHICH APPEARS TO HAVE STRENGTHENED.
01:00:17HE ALSO ACKNOWLEDGED RISING COSTS FROM INFLATION.
01:00:20THIS IS ABOUT 30 MINUTES.
01:00:29GOOD MORNING, KRISTIN.
01:00:31THANK YOU FOR THAT SUPER KIND INTRODUCTION. I WAS 25 YEARS AGO THAT WE WERE
01:00:37COLLEAGUES. IT'S AN HONOR TO SHARE THE STAGE WITH YOU.
01:00:39IT'S GREAT TO BE BACK HERE IN THE VALLEY AGAIN.
01:00:42SEE SO MANY FAMILIAR FACES FROM ACADEMIA, FROM MY LAST TOUR OF
01:00:47SERVICE AND FROM MY FIRST 100 DAYS, WHICH IS JUST THIS
01:00:51WEEKEND. I'VE BEEN LOOKING FORWARD TO THIS WEEKEND.
01:00:55AND BEFORE I GO FURTHER, I WANT TO THANK JEFF SCHMIDT AND HIS
01:00:57TEAM FOR THE INCREDIBLE HOSPITAL COMMITTEE.
01:01:00EVERYBODY HERE IS IN DEBT TO YOU AND YOUR COLLEAGUES HERE AT THE FEDERAL RESERVE BANK OF KANSAS
01:01:05CITY. JEFF, OUR THANKS TO YOU AND YOUR TEAM.
01:01:08NOW, HE AND THE OTHER PLANNERS
01:01:10HERE HAVE SOME RECREATION
01:01:13OPTIONS LINED UP FOR LATER TODAY.
01:01:15I'D ADVISE YOU TO BE VERY CAREFUL WITH YOUR CHOICES.
01:01:19AS I LEARNED YEARS AGO, YOU CAN TAKE TWO DIFFERENT KINDS OF
01:01:23HIKES ON THE TRAILS AROUND JACKSON.
01:01:25I CAN SUM UP MY HIKES WITH
01:01:28FORMER VICE CHAIRMAN DON COHN
01:01:30WITH TWO WORDS I SURVIVE THESE
01:01:35DAILY MARATHON DEATH MARCHES
01:01:37REVEAL THE SIGN OF DON THAT I
01:01:39WAS NOT READY FOR. BUT THERE'S ANOTHER KIND OF HIKE.
01:01:44THIS ONE WAS WITH FORMER CHAIRMAN BEN BERNANKE, ANOTHER
01:01:47DEAR OLD COLLEAGUE.
01:01:49WITH BEN, IT WAS A MUCH MORE
01:01:52LEISURELY PACE, AN EASY STROLL
01:01:55ALONG THE WANDERING TRAILS OF THE ROCKEFELLER PRESERVE.
01:01:58SO BEFORE SETTING OUT TODAY, MY
01:02:02RECOMMENDATION IS DO A WELLNESS CHECK.
01:02:04ASK YOURSELF, IS THIS A COHN DAY
01:02:06OR A BERNANKE DAY?
01:02:08THE BEST THING ABOUT THIS GATHERING IS THAT IT HELPS US
01:02:12ALL GET OUT HERE TO THE MOUNTAINS AND CLEAR OUR MINDS
01:02:16AND THINK STRAIGHT ABOUT OUR WORLD AND OUR TIME.
01:02:20FOR ME, IT FEELS LIKE THE RIGHT
01:02:22PLACE AND THE RIGHT AUDIENCE FOR
01:02:25REAL ENGAGEMENT WITH THE IDEAS THAT MATTER MOST.
01:02:29INNOVATION, AS CHRISTINE MENTIONED, IS THE CONFERENCE THEME.
01:02:33AND I BELIEVE THE PUBLIC IN THE MARKETS UNDERSTAND THAT,
01:02:37INNOVATE ACTIONS AND THE CONDUCT OF FED POLICY WILL HELP DELIVER
01:02:40PRICE STABILITY ALONGSIDE FULL
01:02:44EMPLOYMENT. SO HERE'S A QUICK OVERVIEW OF WHAT I'LL COVER IN MY REMARKS
01:02:47THIS MORNING. YOU CAN CALL IT AN OUTLINE AND
01:02:50CALL IT A TRAIL MAP. BUT PLEASE, JUST DON'T CALL IT
01:02:54FORWARD GUIDANCE.
01:02:56FIRST, I'LL TOUCH ON A FEW OF THE LONGER TERM QUESTIONS WE'RE
01:02:59ASKING AT THE FED ABOUT THE LATEST GENERAL PURPOSE
01:03:03TECHNOLOGY AND WHERE IT MIGHT TAKE THE ECONOMY.
01:03:07THEN I'LL REFLECT A BIT ON THE PRACTICE OF FORWARD GUIDANCE AND
01:03:11THE INTERACTION BETWEEN THE CENTRAL BANK AND FINANCIAL
01:03:15MARKETS. NEXT, I'LL PRESENT SOME OF THE
01:03:17KEY PRINCIPLES THAT I BELIEVE SHOULD GUIDE THE CONDUCT OF
01:03:20MONETARY POLICY. AND FINALLY, I'LL GIVE YOU MY ASSESSMENT OF WHAT'S HAPPENING
01:03:24IN THE ECONOMY. SO FIRST, I THINK WE SHOULD TRY
01:03:28TO PREPARE A BIT FOR FUTURE
01:03:30POLICY CONJUNCTURE WITH THE
01:03:34UNCHANGING PICTURE OF THE TETONS AS OUR BACKDROP.
01:03:36WE ARE HERE TO SURVEY AN ECONOMIC LANDSCAPE THAT IS
01:03:40ANYTHING BUT STATIC.
01:03:43IT WASN'T SO LONG AGO, INCLUDING
01:03:45IN ROOMS LIKE THIS, IN THE RUN
01:03:47UP TO THE CRISIS OF 2008 AND OVER THE DECADE THAT FOLLOWED,
01:03:51WHEN ECONOMISTS AND POLICYMAKERS
01:03:53WERE SPEAKING OF SECULAR STAGNATION, SPEAKING OF A GLOBAL
01:03:57SAVINGS GLUT.
01:03:59IT'S A WIDELY HELD VIEW THAT AN EXCESS OF CAPITAL WOULD SIT ON
01:04:03THE SIDELINES FOR A VERY LONG, LONG TIME BECAUSE THERE JUST
01:04:06WOULDN'T BE ENOUGH COMPELLING INVESTMENT OPPORTUNITIES.
01:04:10ALL THE GOOD STUFF, YOU'LL RECALL, HAD BEEN INVENTED.
01:04:12SO GROWTH WOULD BE LOW AND SLOW.
01:04:16WELL, I'M SURE HAVE CHANGED.
01:04:19WE'VE COME TO A HINGE POINT IN HISTORY.
01:04:22TO BORROW A PHRASE, A FRAMING
01:04:25FROM MY FORMER MENTOR, GEORGE
01:04:27SHULTZ, TO CITE THE CLEAREST
01:04:29EXAMPLE, PROGRESS IN A.I., THE
01:04:3280 YEAR OLD NAME FOR THE NEWEST
01:04:35TECHNOLOGY HAS BEEN FASTER, EVEN THAN ITS EVANGELISTS PREDICTED.
01:04:38JUST A COUPLE OF YEARS AGO.
01:04:40THE POTENTIAL FOR SUBSTANTIALLY
01:04:42HIGHER GROWTH IS ON THE RISE.
01:04:44EVER EXPANDING POOLS OF CAPITAL
01:04:47POURING INTO AIR RELATED INFRASTRUCTURE OF ALL SORTS, A
01:04:51KIND OF SUPER MOORE'S LAW SEEMS
01:04:55TO BE PLAYING OUT. SCALING LAWS TO OR CHANGING BOTH.
01:04:58THE METHOD AND SPEED OF
01:05:01INNOVATION, CAPITAL AND LABOR HAVE COMBINED TO CREATE LARGE
01:05:05LANGUAGE MODELS. AT THE HEART OF A.I. USERS BUY
01:05:09TOKENS TO GAIN ACCESS TO THESE
01:05:11MODELS, REPORTS PUT ANNUALIZED TOKEN SALES FOR THE TWO LEADING
01:05:15LABS ALONE AT MORE THAN $100
01:05:19BILLION, AN INCREASE OF 500%
01:05:22FROM JUST 12 MONTHS AGO. WE HAVE THE FED.
01:05:25WE WATCH ALL THIS ATTENTIVE PLEA.
01:05:28WE RECOGNIZE THAT A.I. IS A NEW VARIABLE, POTENTIALLY A NEW
01:05:34FACTOR OF PRODUCTION THAT WILL HAVE CONSEQUENCES BOTH FOR THE
01:05:38ECONOMY AND FOR THE CONDUCT OF MONETARY POLICY.
01:05:42IT OPENS UP SOME MAJOR LINES OF
01:05:44INQUIRY WITH THE APPLICATION OF AI CAUSED A SIGNIFICANT
01:05:48SUSTAINED RISE IN PRODUCTIVITY ACROSS THE ECONOMY.
01:05:52IF SO, WHEN WILL TOKEN USAGE BE
01:05:57COMPLEMENTARY OR COMPETITIVE TO LABOR?
01:06:00WILL THE NEXT GENERATION OF A.I.
01:06:03MODELS DEMAND EVEN GREATER CAPITAL INTENSITY TO OR WILL THE
01:06:06MODELS THEMSELVES HELP DEVISE A
01:06:09CAPITAL LIGHT SOLUTION?
01:06:11AMONG THE OTHER YET UNKNOWNS IS THE RESULTING MARKET STRUCTURE.
01:06:17WHO GETS TO MAKE THE MONEY? IT'S NOT OBVIOUS WHEN THE WHERE
01:06:19THE RETURNS ON CAPITAL WILL LAND
01:06:22OR ON WHAT TIME SCALE.
01:06:25EARLY ON, HOW MUCH OF THE SURPLUS GOES TO OWNERS OF SCARCE ASSETS.
01:06:30THE AND LABS OR CHIPMAKERS OR
01:06:32ENERGY PRODUCERS OR CLOUD PROVIDERS.
01:06:35OVER TIME, HOW MUCH OF THAT
01:06:37VALUE ACCRUES TO BUSINESSES AND CONSUMERS?
01:06:41AND IMPORTANTLY, WHAT ARE THE
01:06:43IMPLICATIONS FOR WORKERS AND FOR THE EMPLOYMENT SIDE OF THE FED'S MANDATE?
01:06:49LIKEWISE, WE DON'T YET KNOW THE EQUILIBRIUM PRICE OF THE TOKENS
01:06:52THAT GIVE ACCESS TO THESE MODELS.
01:06:54MIGHT THERE BE A HETEROGENEITY
01:06:56OF TOKENS SUCH THAT GROWING SUMS
01:06:59WILL BE PAID FOR THE ACCESS TO THE BEST MODELS?
01:07:03THOSE AT THE FRONTIER WILL TOKEN
01:07:06PRICES FOR OLDER MODELS FALL TO
01:07:09THE LEVEL OF THEIR MARGINAL COST
01:07:11WELL WILL BE STRENGTHENED THROUGH THESE MATTERS WITH THE
01:07:15HELP OF A TASK FORCE ON PRODUCTIVITY AND JOBS.
01:07:18MY EARLY CHECK INS WITH THE LEADERS OF THAT TASK FORCE AND
01:07:21THE REST HAVE BEEN VERY ENCOURAGING. TO BE CLEAR, THOUGH, THEY'RE
01:07:26RECOMMENDING ACTIONS WILL COME LATER AND HAVE NO BEARING ON
01:07:30DECISIONS WE MAKE IN THE CURRENT POLICY. CONJUNCTURE.
01:07:33BUT I BELIEVE THAT FOR FUTURE POLICY CHALLENGES, THIS
01:07:37INTELLECTUAL INVESTMENT TODAY WILL LEAVE US MUCH BETTER
01:07:41PREPARED FOR TOMORROW.
01:07:43NEXT, LET ME SAY A WORD ABOUT FORWARD GUIDANCE AND ITS
01:07:49SUBSTITUTES AS OUR TASK FORCES GO ABOUT THEIR WORK.
01:07:51AS YOU MIGHT KNOW, I'M NOT
01:07:54WAITING TO INTRODUCE INNOVATIONS
01:07:56AT THE FED TO HELP MAKE US FIT FOR PURPOSE.
01:08:00TO HIGHLIGHT ONE EXAMPLE, I'VE SET OUT TO CHANGE THE FORM AND
01:08:04FUNCTION OF THE FED CHAIRMAN,
01:08:06SO-CALLED FORWARD GUIDANCE. YOU MIGHT KNOW ABOUT MY LONG
01:08:10TIME DISCOMFORT WITH EARLY
01:08:12PRONOUNCEMENTS OF FUTURE POLICY DECISIONS.
01:08:15I MUCH PREFER ANOTHER PATH AND
01:08:17THAT WILL MAKE THE CASE FOR IT.
01:08:21TRANSPARENCY AND COMMUNICATION
01:08:24IS ABOUT FUTURE POLICY DECISIONS.
01:08:26IT'S NOT AN END UNTO ITSELF.
01:08:28COMMUNICATIONS MUST BE IN
01:08:30SERVICE TO THE FED'S PARAMOUNT RESPONSIBILITY.
01:08:34WHAT IS THAT? THAT'S GETTING POLICY RIGHT.
01:08:38FORWARD GUIDANCE AS A REGULAR
01:08:40PRACTICE WAS ADOPTED BY MY COLLEAGUES AND ME DURING THE
01:08:44GLOBAL FINANCIAL CRISIS. IT WAS ESSENTIAL AT THE TIME AND
01:08:48WE INTRODUCED IT WITH MUCH FANFARE.
01:08:50BUT AS WITH OTHER LEGACIES OF
01:08:53CRISES PAST, I BELIEVE THE
01:08:57PRACTICE HAS OUTSTAYED ITS WELCOME.
01:08:59IN NORMAL TIMES, THE ROLE OF FORWARD GUIDANCE SHOULD BE
01:09:03LIMITED AND CIRCUMSCRIBED.
01:09:05OTHERWISE, IT RISKS CREATING
01:09:07AMBIGUITY IN THE NAME OF CLARITY.
01:09:11OVERSHARING, POLICY DELIBERATION AND OVERCOMMITTING.
01:09:15SO FUTURE DECISIONS CAN LEAD
01:09:17MARKETS, BUSINESSES AND HOUSEHOLDS ASTRAY.
01:09:21AND I BELIEVE WHEN POLICYMAKERS
01:09:23MAKE QUASI COMMITMENTS ON INTEREST RATES THROUGHOUT THE
01:09:27CYCLE, WE INHIBIT OUR OWN
01:09:30FREEDOM TO MAKE THE RIGHT CALLS.
01:09:32WHEN IT'S TIME TO DECIDE. TO GET POLICY RIGHT, WE ALSO
01:09:36NEED TO GET THE RELATIONSHIP RIGHT BETWEEN THE CENTRAL BANK
01:09:40AND FINANCIAL MARKETS.
01:09:42THE MARKETS, THE EXCUSE ME, THE
01:09:44FED NEEDS CLEAR MARKET SIGNALS
01:09:46AS UNFILTERED AS POSSIBLE FROM
01:09:48MARKET INTERNALS, FROM THE LEVEL
01:09:52AND CHANGE IN ASSET PRICES ACROSS SECTORS.
01:09:56THE PRICES AND TRADING VOLUMES
01:09:57OF TREASURY SECURITIES, THE
01:10:01FOREIGN EXCHANGE VALUE OF THE DOLLAR, THE COST AND
01:10:05AVAILABILITY OF CREDIT ABROAD,
01:10:07SET OF COMMODITY PRICES.
01:10:09THESE AND OTHER INDICATORS SHOULD INFORM THE FED'S
01:10:12NEAR-TERM OUTLOOK ON ECONOMIC
01:10:16ACTIVITY AND INFLATION THROUGHOUT THE BUSINESS CYCLE.
01:10:19IT SHOULD ALSO REVEAL THE STATE
01:10:21OF BROADER FINANCIAL CONDITIONS
01:10:24AND THE RISKS AND UNCERTAINTIES
01:10:26OF THE FINANCIAL CYCLE.
01:10:29AT THE SAME TIME, MARKET
01:10:32PARTICIPANTS THEMSELVES SHOULD
01:10:34BE TRACKING REAL INFORMATION ABOUT THE REAL ECONOMY.
01:10:38THEY SHOULD DRAW THEIR OWN CONCLUSIONS, FORM THEIR OWN
01:10:42EXPECTATIONS ON THINGS LIKE OUTPUT AND EMPLOYMENT AND
01:10:46INFLATION. AND THEY TOO SHOULD STAY SHARPLY
01:10:49ATTUNED TO RISKS.
01:10:50IN MY VIEW, THE FED SHOULD BE
01:10:53HUMBLE AND NEVER NAIVE.
01:10:55THE FED PLAYS AN ESSENTIAL ROLE
01:10:57IN THE ECONOMY AND MARKETS.
01:10:59OUR TOOLS ARE POWERFUL.
01:11:01WE DETERMINE THE PATH OF SHORT TERM INTEREST RATES.
01:11:05AND MARKET PARTICIPANTS WILL
01:11:08ALWAYS TRY TO ANTICIPATE WHAT WE WILL DO NEXT.
01:11:12BUT WE SHOULD NOT INDULGE A
01:11:16REGIME IN WHICH MARKET PARTICIPANTS ARE LOOKING
01:11:18PRIMARILY TO THE FED FOR THEIR NEXT TRADE.
01:11:23THE ECONOMIC LITERATURE HAS LONG
01:11:24DESCRIBED THE DISTORTING
01:11:28EFFECTS, WHAT IT CALLED THE HALL OF MIRRORS PROBLEM.
01:11:30IF MARKETS RELY MATERIALLY ON
01:11:32THE FED'S GUIDANCE AND THE FED
01:11:36RELIES ON MARKET PRICES, WE'RE
01:11:38MORE LIKELY TO BE BLINDED TO NEW
01:11:42DEVELOPMENTS, MORE LIKELY TO BE CAUGHT UNPREPARED, SERVED, AND
01:11:45MORE LIKELY TO COMMIT ERRORS IN POLICYMAKING.
01:11:49NOW, PERVERSELY, MARKET
01:11:53PARTICIPANTS ARE UNLIKELY TO BEAR THE BIGGEST COSTS OF THE
01:11:55HALL OF MIRRORS PROBLEM. MOST SERIOUS HARM IS LIKELY TO
01:11:59BEFALL THOSE WITHOUT ANY
01:12:02FINANCIAL ASSETS. IF THE FED GETS INFLATION WRONG
01:12:06AND JUDGES THE ECONOMY WRONG
01:12:08GETS THE WORST OF IT, NOT THE
01:12:12FINANCIAL HIGH FLIERS HARD, HARDWORKING AMERICANS ARE THE
01:12:15ONES LEFT TO DEAL WITH INFLATION THAT'S TOO HIGH, OR JOBS THAT
01:12:18SUDDENLY APPEAR LESS SECURE.
01:12:22SO IF FORWARD GUIDANCE IS ILL
01:12:25SUITED TO NORMAL TIMES, HOW
01:12:26ABOUT THE NEW FED CHIEF COMMITS
01:12:29AT A MEETING JUST LIKE THIS TO
01:12:31SOME EXPLICIT REACTION FUNCTION?
01:12:33SURELY HE COULD TELL US HIS INTEREST RATE PATH IF, SAY, THE
01:12:37DATA WERE TO COME IN HOT OR COLD?
01:12:41WELL, I WISH OUR UNDERSTANDING
01:12:43OF THE ECONOMY WERE SO PRECISE
01:12:45AS TO PROVIDE A MECHANICAL TRIED AND TRUE ANSWER.
01:12:49THAT'S SOME SIMPLE FUNCTION,
01:12:52LIKE A TAYLOR RULE COULD BE RIGOROUSLY RELIED UPON.
01:12:56BUT OUR KNOWLEDGE JUST DOES NOT EXTEND THAT FAR.
01:12:59AT LEAST NOT YET.
01:13:01AND OTHER FACTORS MOST RELEVANT TO THE PROPER CONDUCT OF
01:13:05MONETARY POLICY.
01:13:06THEY CHANGE OVER TIME, PROVIDING
01:13:10FORECASTS TO ILLUSTRATE THE FED'S REACTION FUNCTION WORKS
01:13:13BETTER IN THEORY THAN IN PRACTICE.
01:13:17BETTER IN THE LAB THAN IN THE FIELD.
01:13:20I AM NOT ALONE IN NOTICING THAT FORWARD GUIDANCE IN 2021.
01:13:24TO CITE JUST ONE EXAMPLE MIGHT
01:13:28WELL HAVE SLOWED THE POLICY
01:13:30RESPONSE TO HIGH INFLATION. IN MY TERM AS CHAIRMAN, MY
01:13:34COLLEAGUES AND I WILL ENDEAVOR TO CONSTRUCT MORE RELIABLE
01:13:38MODELS, MORE ROBUST RULES, AND
01:13:40WILL DO THIS KNOWING THAT
01:13:42ACCURACY IN FORECASTING IS STILL
01:13:44JUST AN ASPIRATION.
01:13:46WITH SO MUCH CHANGING SO FAST IN
01:13:49OUR GEO POLITICS, GLOBAL SUPPLY
01:13:52CHAINS, TECHNOLOGY, IT'S WISE TO
01:13:55BE MODEST ABOUT WHAT WE CAN AND
01:13:57CANNOT KNOW AS WE SIT HERE TODAY.
01:14:00IN THE SAME SPIRIT, WE SHOULD
01:14:02RECEIVE THE FULL RANGE OF IDEAS
01:14:04ON MATTERS THAT MAY INFORM THE FED'S MONETARY POLICY
01:14:08DISCUSSIONS. IF THE AIM IS OPTIMAL DECISION
01:14:12MAKING AND IT SHOULD BE, WE
01:14:14SHOULD NOT CROWD OUT VIEWS ON THE ECONOMY.
01:14:18HOW THEN, TO CHART A BETTER PATH
01:14:20TO POLICY IN THE BALANCE OF MY REMARKS?
01:14:24I WILL SHARE WITH YOU SOME KEY PRINCIPLES THAT GUIDE MY
01:14:27THINKING ON THE APPROPRIATE CONDUCT OF MONETARY POLICY.
01:14:31AND THEN I'LL OFFER MY PROMISE ASSESSMENT OF THE ECONOMY.
01:14:36SO LET'S TURN FIRST TO PRINCIPLES.
01:14:39FIRST, I'VE NOTICED IN THIS LINE
01:14:41OF WORK, YESTERDAY'S NEWS HAS A
01:14:44WAY OF GETTING MISTAKEN FOR WHAT'S HAPPENING RIGHT NOW.
01:14:48THE CHALLENGE IS TO KNOW THE DIFFERENCE.
01:14:50IN OTHER WORDS, WE MUST
01:14:52INTERROGATE REALITY, MAKE SURE
01:14:56WE'RE NOT SETTING FORWARD
01:14:57LOOKING POLICY BASED ON STALE OR
01:15:01INACCURATE DATA.
01:15:03NOR SHOULD WE RELY ON ISOLÉ TWO
01:15:06DATA POINTS TRENDS MATTER MOST.
01:15:09THE FED'S DECISION MAKING AGENCY.
01:15:12WE MAKE CHOICES AMID UNCERTAINTY AND THE DATA UPON WHICH WE DRAW
01:15:16MUST BE RELEVANT,
01:15:20CONTEMPORANEOUS, ACCURATE AND AS
01:15:22ACTIONABLE AS POSSIBLE.
01:15:26SECOND PRINCIPLE THE FED'S ACTIONS ARE INTENDED TO ENSURE
01:15:29THAT THE AGGREGATE DEMAND SIDE OF THE ECONOMY IS BROADLY
01:15:33CONSISTENT WITH AGGREGATES SUPPLY.
01:15:37HOWEVER, ALL WE OBSERVE DIRECTLY IS ACTIVITY.
01:15:39WE NEVER SEE AND CAN ONLY INFER
01:15:43WHAT'S REALLY HAPPENING ON THE SUPPLY SIDE.
01:15:47HENCE, EVALUATING THE CURRENT AND EXPECTED BALANCE BETWEEN
01:15:52AGGREGATE SUPPLY AND AGGREGATE
01:15:52DEMAND IS IMPRECISE.
01:15:57THIRD PRINCIPLE THERE SHOULD BE
01:15:59NO MISUNDERSTANDING THE FED'S
01:16:01PRICE STABILITY OBJECTIVE OF 2%,
01:16:04AS MEASURED BY THE PC PRICE
01:16:08INDEX, IS A FIRM FIXED TARGET
01:16:10THAT MAY BE EQUALLY CLEAR ABOUT
01:16:13ANOTHER ASPECT OF THIS
01:16:15SUBJECTIVE PRICE STABILITY IS
01:16:17NOT SELF-EXECUTING, NOR IS
01:16:21INFLATION NECESSARILY MEAN REVERTING.
01:16:24IT'S THE FED'S JOB TO DELIVER STABLE PRICES.
01:16:28NO EXCUSES. FOURTH PRINCIPLE.
01:16:31THE FED ALSO BEARS RESPONSIBILITY FOR MAXIMUM
01:16:36EMPLOYMENT, ACHIEVING BOTH SIDES OF OUR MANDATE OVER THE MEDIUM
01:16:39TERM IS NOT AN EITHER OR PROPOSITION.
01:16:42I DO NOT BELIEVE THE FED'S DUAL
01:16:45MANDATE WORKS ACROSS PURPOSES.
01:16:47AFTER ALL, HIGH INFLATION ITSELF
01:16:51IS VERY HARMFUL TO ECONOMIC PROSPERITY.
01:16:55FIFTH PRINCIPLE SHORT TERM INTEREST RATES ARE THE
01:17:00PREDOMINANT TOOL TO ACHIEVE THE DUAL MANDATE.
01:17:04UNCONVENTIONAL POLICIES TO SPUR ECONOMIC ACTIVITY MAY SUIT
01:17:07GENUINE CRISES, OF WHICH WE ALL
01:17:10HAVE MUCH EXPERIENCE. BUT THEY SHOULD OTHERWISE BE
01:17:14USED SPARINGLY, IF AT ALL.
01:17:18SIXTH, MONEY MATTERS.
01:17:21I KNOW IT'S NOT FASHIONABLE
01:17:24THESE DAYS, BUT MY VIEW IS THAT
01:17:26MONEY HAS SOMETHING IMPORTANT TO
01:17:28DO WITH MONETARY POLICY.
01:17:30WE SHOULD PAY ATTENTION TO MONEY
01:17:33CREATED BY THE CENTRAL BANK AND
01:17:35MONEY THAT COMES FROM THE
01:17:37BANKING AND FINANCIAL SYSTEM.
01:17:39IT'S TRUE THAT FINANCIAL
01:17:41INNOVATIONS SUBJECT OF THIS
01:17:44CONFERENCE AND OTHER FACTORS
01:17:46ALTER THE MECHANICS THAT LINK
01:17:48THE MONETARY BASE, THE VELOCITY
01:17:50OF MONEY AND THE BROADER ECONOMY.
01:17:53BUT THAT IS SCARCELY A REASON TO
01:17:55IGNORE THE ULTIMATE EFFECTS OF
01:17:57MONEY ON FINANCIAL CONDITIONS AND PRICES.
01:18:02FINALLY, A QUIETER FED, A MORE
01:18:07PURPOSEFUL FED IN ITS COMMUNICATIONS IS BETTER ABLE TO
01:18:11MEET ITS OBJECTIVES, AND WE CAN
01:18:13BE HELD ACCOUNTABLE FOR DELIVERING ON OUR REMIT.
01:18:17THE ONLY TRUE TEST OF OUR
01:18:20CREDIBILITY, TO BORROW A LINE FROM GENERAL CHUCK YEAGER AT THE
01:18:23MOMENT OF TRUTH. THERE ARE EITHER REASONS OR
01:18:28RESULTS. SO HAVING HEARD A LITTLE BIT ABOUT A.I. AND GENERAL PURPOSE
01:18:33TECHNOLOGIES, HAVING HEARD A LITTLE BIT ABOUT THE NEXT POLICY
01:18:36CONJUNCTURE, LITTLE BIT ON
01:18:38PRINCIPLES, LET'S TURN TO THE ECONOMY TODAY.
01:18:42GIVEN THOSE PRINCIPLES, HOW DO I READ THE ECONOMY?
01:18:46WHAT'S REALLY GOING ON OUTSIDE THE WINDOW?
01:18:48IT'S A LITTLE IRONIC. THERE ARE NO WINDOWS IN THIS
01:18:51ROOM, BUT BUT THEY'RE BIG ONES
01:18:54THAT THE FEDERAL RESERVE AND
01:18:56WE'VE BEEN USING THOSE IN MY FIRST HUNDRED DAYS.
01:19:00AND I EXPECT WE'RE GOING TO CONTINUE TO USE THOSE IN THE
01:19:04PERIOD RIGHT AHEAD OF US. NOW, YOU MAY HAVE READ IN THE
01:19:06JULY MINUTES THE UNANIMOUS VIEW
01:19:09OF THE FOMC.
01:19:11LABOR MARKETS WERE STABLE.
01:19:13OUTPUT SOLID, BUT INFLATION REMAINED TOO HIGH.
01:19:17A GOOD MAJORITY OF MY COLLEAGUES AND I THOUGHT THE WISER COURSE
01:19:21WAS TO AWAIT NEW INFORMATION IN
01:19:24THE INTERMEETING PERIOD,
01:19:25ESPECIALLY GIVEN POSSIBLE DEVELOPMENTS IN SUPPLY CHAINS.
01:19:30INVESTOR FLOWS AND GEOPOLITICS
01:19:32BEFORE DECIDING WHETHER CHANGE IN INTEREST RATE POLICY WAS
01:19:37ADVISABLE. AND WE EXPRESSED OUR JOINT
01:19:39READINESS TO ACT AS
01:19:42CIRCUMSTANCES EXCUSE ME, REQUIRE.
01:19:45FOR MY PART TODAY, AS WE SIT
01:19:48HERE, I'M IMPRESSED BY THE OVERALL PERFORMANCE OF THE
01:19:51ECONOMY, WHICH APPEARS TO HAVE STRENGTHENED.
01:19:55ONE INDICATOR OF STRENGTH IS HOW WELL AN ECONOMY HOLDS UP UNDER
01:19:59STRESS, HOW WELL IT HOLDS UP UNDER SHOCKS.
01:20:01ON THAT SCORE, BOTH MAIN STREET
01:20:05AND WALL STREET HAVE BEEN REMARKABLY RESILIENT.
01:20:07SEVERAL OTHER OBSERVATIONS.
01:20:11BUSINESS CAPEX IS RISING RAPIDLY.
01:20:15THE FOURTH QUARTER CHANGE AND INVESTMENT IN EQUIPMENT AND
01:20:18INTANGIBLES HAS BEEN AROUND 9%.
01:20:20ITS HIGHEST GROWTH RATE SINCE
01:20:232021, AND MORE THAN HALF OF THE
01:20:25CAPEX GROWTH LIKELY BE ASCRIBED
01:20:27TO THE BUILDOUT RELATED TO A.I.
01:20:31WHAT ABOUT PROFITS FOR THE FIRMS
01:20:33IN THE S&P? PROFITS HAVE GROWN MORE THAN 20%
01:20:37OVER THE PAST YEAR ALONE. PROFIT MARGINS ARE QUITE
01:20:41ELEVATED RELATIVE TO HISTORY.
01:20:43OVERALL EQUITY MARKET VOLATILITY BE QUITE LOW.
01:20:48WE'RE STAYING KEENLY FOCUSED ON MARKET INTERNALS, WATCHING
01:20:52PERFORMANCE ACROSS SECTORS.
01:20:54EXPECTATIONS FOR BOTH GROWTH AND CAPEX AND CORPORATE EARNINGS ARE
01:20:57RUNNING QUITE HIGH. I CONTINUE TO WATCH THE CHANGE
01:21:01IN THE GROWTH RATES. SECOND DERIVATIVE, THE FOLLOW ON
01:21:06EFFECTS ON ASSET PRICES, BUSINESS CONFIDENCE, CONSUMER
01:21:08INCOMES AND SPENDING ARE EQUALLY
01:21:11IMPORTANT TO GAUGE CREDIT
01:21:15SPREADS ON CORPORATE BONDS AND LEVERAGED LOANS ARE NEAR THE LOW
01:21:17END OF THEIR HISTORICAL AVERAGES.
01:21:20IN ISSUE VOLUMES THIS YEAR QUITE
01:21:24STRONG. LOOKING BEYOND FIXED INCOME
01:21:26MARKETS TO THE BANKING BUSINESS IN THE JULY SO-CALLED SLEW
01:21:30SURVEY, BANKS TELL US THAT STANDARDS FOR CNI LOANS ON THE
01:21:34EASIER END OF THEIR HISTORICAL
01:21:38RANGES HELPS EXPLAIN THEIR GROWTH. THAT WE'VE SEEN THIS YEAR ON
01:21:41THESE LOANS. IN MY VIEW, CREDIT AND LOAN
01:21:45MARKETS ARE SHOWING FEW SIGNS OF POLICY RESTRAINT.
01:21:49NOW, CERTAIN SECTORS LIKE HOUSING AND AGRICULTURE ARE
01:21:51SHOWING STRAINS.
01:21:53BUT ON BALANCE, I WOULD BE HARD
01:21:56PRESSED TO DESCRIBE BROAD FINANCIAL CONDITIONS AS
01:22:01RESTRICTIVE. REAL CONSUMER SPENDING HAS BEEN HEALTHY DESPITE THESE SHOCKS.
01:22:06INCREASE IN MORE THAN 2% OVER THE PAST FOUR QUARTERS. IF YOU COMBINE CONSUMPTION WITH
01:22:10A BRISK INVESTMENT, AS WE TALKED
01:22:12ABOUT EARLIER, PRIVATE DOMESTIC FINANCIAL PURCHASES HAVE ALSO
01:22:16RISEN. THESE PURCHASES HAVE INCREASED
01:22:19TO THE PACE OF NEARLY 3% OR SO SO FAR THIS YEAR.
01:22:23THAT'S A MEASURE THAT TYPICALLY
01:22:25CAROLS MORE SIGNAL THAN GDP.
01:22:27THE TREND HERE TO PUZZLE LIVE.
01:22:30SO ON THE EMPLOYMENT SIDE OF THE
01:22:32FED'S DUAL MANDATE, A COUNTRIES
01:22:34DOING WELL, LABOR MARKETS ARE QUITE STABLE.
01:22:38THE JOBLESS RATE AT 4.1% REMAINS
01:22:41LOW BY HISTORICAL STANDARDS AND
01:22:43HASN'T CHANGED MUCH IN A COUPLE OF YEARS.
01:22:47UNEMPLOYMENT CLAIMS ON A FOUR WEEK MOVING AVERAGE, AN
01:22:50EMPIRICALLY ROBUST REAL TIME
01:22:53INDICATOR, ARE NEAR THEIR LOWEST LEVEL IN DECADES.
01:22:56IN MY VIEW, THE RELATIVELY LOW
01:22:59TURNOVER IN TODAY'S LABOR MARKET IS PARTLY A RESULT OF THE
01:23:03SIGNIFICANT REMATCH BETWEEN EMPLOYERS AND EMPLOYEES THAT
01:23:07HAPPENED AFTER THE POST.
01:23:09IN THE POST-PANDEMIC ENVIRONMENT.
01:23:11BUT WHEN LABOR SUPPLY IS BARELY GROWING MONTHLY JOB GAINS ARE
01:23:15NATURALLY GOING TO RUN LOW.
01:23:19THEY'RE ALWAYS AREA OF CONCERNS IN THE LABOR MARKET. FOR EXAMPLE, AMONG RECENT
01:23:23GRADUATES IN GENERAL, THOUGH, PEOPLE WANT TO WORK, BY AND
01:23:27LARGE, ARE HOLDING OR FINDING JOBS.
01:23:30THEY MAY WELL BE CONCERNED ABOUT
01:23:33FUTURE LABOR DISRUPTIONS. BUT AS OF NOW, I BELIEVE THE
01:23:37LABOR MARKETS ARE BROADLY
01:23:39CONSISTENT WITH FULL EMPLOYMENT.
01:23:41BUT ON THE PRICE STABILITY SIDE
01:23:43OF OUR MANDATE, THE NUMBERS ARE MORE CONCERNING.
01:23:47THE FED'S PREFERRED MEASURE OF INFLATION, WHEN I TALKED ABOUT
01:23:51EARLIER, THE 12 MONTH CHANGE IN
01:23:52THE PC PRICE INDEX STANDS AT
01:23:563.7%. THE SIX MONTH CHANGE A LITTLE
01:24:00ABOVE FOR THE COMPARABLE MEASURES FROM THE CPI INDEX ARE
01:24:04ALSO ELEVATED AS OUR CORE MEASURES BOTH A PC AND CPI
01:24:08INFLATION. NONE OF THESE MEASURES ARE
01:24:11PERFECT, BUT THEY ALL TELL A SIMILAR STORY.
01:24:14INFLATION IS RUNNING ABOVE OUR 2% TARGET.
01:24:17THE FED'S PREDOMINANT FOCUS
01:24:21RIGHT NOW SHOULD BE ON PRICES.
01:24:25SO WHAT'S OUR JOB? THE JOB FOR POLICYMAKERS IS TO
01:24:29CAPTURE UNDERLYING TREND INFLATION.
01:24:32EASIER SAID THAN DONE. WE WANT TO GAUGE WHETHER
01:24:36UNDERLYING INFLATION IS RISING
01:24:38OR FALLING OR SEEMS TO BE STUCK IN PLACE.
01:24:42WE ALSO WANT TO UNDERSTAND NOT JUST THE DIRECTION OF TRAVEL,
01:24:46BUT THE SPEED. EACH OF THESE BROAD INFLATION
01:24:48MEASURES HAVE FALLEN SIGNIFICANTLY FROM THEIR HIGHS
01:24:52OF A FEW YEARS AGO. BUT PROGRESS OF THE LAST COUPLE
01:24:55OF YEARS HAS BEEN MORE MODEST.
01:24:57AND WHILE THIS SUMMER'S PC AND
01:24:59CPI READINGS WERE BETTER THAN EXPECTED, THEY DO NOT TELL ME
01:25:04THAT UNDERLYING TRENDS HAVE
01:25:06MEANINGFULLY IMPROVED. THE DATA ALSO SHOW MODERATE WAGE
01:25:10GROWTH. BUT IN MY VIEW, TRACKING
01:25:12UNDERLYING INFLATION WAGE GROWTH
01:25:15HAS NOT PROVEN A RELIABLE
01:25:17INDICATOR OF FUTURE INFLATION FOR A VERY LONG TIME.
01:25:22SO TO TRY TO GAUGE UNDERLYING
01:25:25INFLATION, I WANT TO TELL YOU ABOUT A COUPLE OF THINGS. I'VE ALWAYS LOOKED TO.
01:25:29I FIND IT INSTRUCTIVE TO DISAGREE RELEGATE THE HUNDRED
01:25:33AND 99 INDIVIDUAL COMPONENTS OF
01:25:35THE PC PRICE MEASURE OVER THE
01:25:38LAST 12 MONTHS, 5,454% OF GOODS
01:25:41AND SERVICES IN THE BASKET
01:25:43SHOWED PRICE INCREASES ABOVE 3%.
01:25:46THIS IS WELL BELOW THE
01:25:49POST-PANDEMIC HIGHS OF ABOUT 77%. BUT IT REMAINS WELL ABOVE THE
01:25:54LEVEL OF THREE TWO IN A COUPLE OF THE DECADES THAT PRECEDED THE
01:25:58PANDEMIC. LOOKING OVER JUST THE LAST SIX MONTHS, THE CONCLUSION IS
01:26:02SIMILAR. 49% OF GOODS AND SERVICES IN THE
01:26:05PC BASKET SHOWED PRICE INCREASES ABOVE 3%.
01:26:09AND THIS IS WELL BELOW THE POST-PANDEMIC HIGHS, BUT STILL
01:26:13ELEVATED QUITE ELEVATED.
01:26:17THE RECENT RISE IN OVERALL COMMODITY PRICES ALSO BEARS
01:26:21WATCHING. WHAT WE NEED TO JUDGE IS WHETHER
01:26:23THE TRENDS WE SEE INDICATE
01:26:25UPSIDE INFLATION RISKS.
01:26:29NOW IT MATTERS TO WHETHER THE INFLATION READINGS OF THE PAST
01:26:33FIVE YEARS HAVE SEEPED INTO EXPECTATION RATES.
01:26:36THE GOOD NEWS IS THAT MEASURES
01:26:38OF INFLATION EXPECTATION IN THE
01:26:41MEDIUM TERM BUY BY AND LARGE
01:26:43LOOK STABLE AND INFLATION
01:26:47COMPENSATION MEASURES FROM THE SWAPS MARKET SEND A STRONG AND
01:26:51SIMILAR MESSAGE, ESPECIALLY IN
01:26:53LIGHT OF RECENT DEVELOPMENTS.
01:26:55IT'S A CREDIT TO THE FED AS AN
01:26:59INSTITUTION CONSISTENT WITH THE BEST OF THE FED'S TRADITIONS
01:27:03THAT MARKET PRICES SHOW CONFIDENCE THAT WE WILL DELIVER
01:27:07PRICE STABILITY. AND I CAN ASSURE YOU THEY'RE
01:27:12RIGHT. THE THING ABOUT MARKET MEASURES OF INFLATION EXPECTATIONS IN
01:27:16ECONOMIC HISTORY, I KNOW SOME ECONOMIC HISTORIANS IN THE
01:27:20AUDIENCE, AS THEY ALL TEND TO LOOK REALLY STRONG AND DURABLE
01:27:23UNTIL THEY DON'T.
01:27:24THESE EXPECTATIONS ARE NOT
01:27:27PUSHED AROUND EASILY.
01:27:29AND RIGHT NOW THEY ARE VERY WELL ANCHORED, BUT THEY MUST BE
01:27:33CLOSELY MINDED. AND IT'S THE FED'S JOB TO MAKE
01:27:36SURE THAT INFLATION EXPECTATIONS
01:27:38DO NOT GET UNANCHORED. NOW, THERE IS ONE SIGNAL NOBODY
01:27:42CAN MISS.
01:27:44RESPONSIBILITY FOR 65 MONTHS OF
01:27:49SUSTAINED, ELEVATED INFLATION, SAID SQUARELY WITH THE CENTRAL BANK.
01:27:53AND THAT'S WHERE IT BELONGS. SO HERE IS MY STANDARD.
01:27:57WE MUST BE CONFIDENT THAT UNDERLYING INFLATION IS MOVING
01:28:01TO OUR OBJECTIVE CLEARLY, AND
01:28:03THAT SUFFICIENT SPEED OTHERWISE,
01:28:07WE HAVE WORK TO DO. THAT'S OUR JOB.
01:28:09THAT'S OUR MANDATE.
01:28:12AND THAT'S OUR CHARGE TO KEEP. SO I'VE COVERED QUITE A BIT OF
01:28:16GROUND IN THE LAST 25 MINUTES OR SO. LET ME SEE IF I CAN CONCLUDE
01:28:20THIS WAY. I STAND HERE TODAY COMMITTED TO
01:28:23A MODEST PLAN, NOT A DECISION BY
01:28:29FED COLLEAGUES. AND I ARE HARDLY THE FIRST TO HOLD THESE POSITIONS IN A TIME
01:28:33OF GREAT CONSEQUENCE. WE ARE DETERMINED TO REDEEM THE
01:28:38TIME BY DOING OUR VERY BEST WORK.
01:28:41BUT THOSE OF US, THOSE OF YOU THAT KNOW US, YOU'LL KNOW THE
01:28:45FOLLOWING IS TRUE.
01:28:46WE TAKE OUR RESPONSIBILITY
01:28:49SERIOUSLY WITH HUMILITY AND WITH
01:28:53RESOLVE. WE KNOW SO MUCH DEPENDS ON THE
01:28:56CHOICES WE MAKE. SOUND MONETARY POLICY HELPS
01:29:00HOUSEHOLDS AND BUSINESSES TO PROSPER.
01:29:02WHEN CARRIED OUT EFFECTIVELY, IT
01:29:06BROADENS AND DEEPENS THE MOMENTUM OF OUR ECONOMY AND
01:29:09HELPS TO SECURE AMERICA'S LEADERSHIP IN THE WORLD.
01:29:13AND I KNOW THAT OUR COUNTRY NEEDS US TO THINK CAREFULLY AND
01:29:17ACT WISELY.
01:29:18PERHAPS NOW MORE THAN EVER, IT'S
01:29:22A TREMENDOUS HONOR TO SERVE ONCE AGAIN AT THE FEDERAL RESERVE.
01:29:24I'M TRULY GRATEFUL FOR THE ENCOURAGEMENT.
01:29:27GOOD COUNSEL AND THE WARM RECEPTION I RECEIVED IN MY FIRST
01:29:31HUNDRED DAYS FROM MY COLLEAGUES.
01:29:33I'M ALSO HONORED AND GRATEFUL FOR THE VIEWS THAT I'VE GOTTEN
01:29:37SOLICITED UNSOLICITED FROM SO
01:29:40MANY OF YOU IN THIS ROOM FOR
01:29:43THAT AND FOR YOUR KIND ATTENTION THIS MORNING. I SAY THANK YOU.
01:29:47LET'S GET ON WITH THE REST OF THE PROGRAM.
01:30:02YOU'RE WATCHING C-SPAN THREE.
01:30:04DEMOCRACY ON FILTER.
01:30:11START YOUR DAY WITH WASHINGTON JOURNAL.
01:30:15YOUR WINDOW INTO THE NATION'S CAPITOL. THE ONLY NATIONALLY TELEVISED
01:30:19FORUM WE'RE DISCUSSING THE LATEST ISSUES IN WASHINGTON AND
01:30:22ACROSS THE COUNTRY. IT GIVES THE PEOPLE AN OPPORTUNITY TO SPEAK FOR
01:30:26THEMSELVES ON THE ISSUES THAT THEY ACTUALLY CARE ABOUT. THIS IS A GREAT FORUM AND YOU
01:30:30GET TO TALK TO REAL AMERICANS AND LOOK FORWARD TO THE CALLERS HAVE ALWAYS ENJOYED DOING THE
01:30:34PROGRAM. AND I WOULD BE REMISS AS MY FIRST TIME EVER ON C-SPAN IF I
01:30:36DIDN'T SAY THAT, I THINK AND ALL YOUR CALLERS.
01:30:40OUR COUNTRY WOULD BE A BETTER PLACE IF EVERY AMERICAN JUST
01:30:43WATCHED ONE HOUR A WEEK, THEY COULD PICK ONE, 2 OR 3.
01:30:46JOIN US FOR A LIVE THREE HOUR CONVERSATION WITH A VARIETY OF
01:30:51CONGRESSIONAL MEMBERS AND WASHINGTON INFLUENCERS.
01:30:54YOU CAN WATCH WASHINGTON JOURNAL
01:30:56LIVE EVERY MORNING AT 7 A.M.
01:30:58EASTERN ON C-SPAN, C-SPAN NOW OR
01:31:02ONLINE AT C-SPAN DOT ORG.
01:31:09TUESDAY LIVE AT 9 A.M. EASTERN
01:31:12ON C-SPAN, THREE. THE SENATE JUDICIARY COMMITTEE HEARS FROM FBI DIRECTOR KASH
01:31:17PATEL DURING A HEARING ON OVERSIGHT OF THE FEDERAL BUREAU OF INVESTIGATION.
01:31:22WATCH IT LIVE TUESDAY MORNING AT NINE EASTERN ON C-SPAN THREE.
01:31:24C-SPAN NOW OUR FREE MOBILE VIDEO
01:31:26APP, OR ONLINE AT C-SPAN DOT ORG.
01:31:30BEST IDEAS AND BEST PRACTICES CAN BE FOUND ANYWHERE.
01:31:32WE HAVE TO LISTEN SO WE CAN GOVERN BETTER DEMOCRACY DEPENDS
01:31:36ON HEAVY DOSES OF CIVILITY. YOU CAN FIGHT AND STILL BE
01:31:40FRIENDLY. BRIDGING THE DIVIDE IN AMERICAN POLITICS.
01:31:43YOU KNOW, YOU MAY NOT AGREE WITH IT. DON'T COUNT ON EVERYTHING, BUT YOU CAN FIND AREAS WHERE YOU DO
01:31:47AGREE. HE'S A PRETTY LIKABLE GUY AS WELL. CHRIS -- AND I ARE ACTUALLY FRIENDS.
01:31:50HE VOTES WRONG ALL THE TIME, BUT WE'RE ACTUALLY FRIENDS. SO HORRIBLE SECRET THAT SCOTT
01:31:53AND I HAVE IS THAT WE ACTUALLY RESPECT EACH OTHER. WE ALL DON'T HATE EACH OTHER.
01:31:57YOU TWO ACTUALLY KIND OF LIKE EACH OTHER. THESE ARE THE KINDS OF SECRETS
01:32:00WE'D LIKE TO EXPOSE. IT'S NICE TO BE WITH A MEMBER WHO KNOWS WHAT THEY'RE TALKING ABOUT.
01:32:04YOU GUYS DID AGREE TO THE CIVILITY, RIGHT?
01:32:07HE OWES MY SON $10 FROM THE BET. HE'S NEVER PAID FOR IT.
01:32:11THAT'S FIGHTING WORDS RIGHT NOW. GLAD I'M NOT IN CHARGE.
01:32:15I'M THRILLED TO BE ON THE SHOW WITH HIM. THEY'RE NOT SHOWS LIKE THIS, RIGHT?
01:32:18INCENTIVIZING THAT RELATIONSHIP. CEASE FIRE.
01:32:23FRIDAY NIGHTS ON C-SPAN.
01:32:28WELL, UP NEXT, HEALTH AND
01:32:30MEDICAL LEADERS JOIN POLICY ADVOCATES AND TECH INDUSTRY
01:32:34EXECUTIVES TO EXAMINE THE HARMFUL IMPACTS OF SCREEN USE BY
01:32:37CHILDREN AND CERTAIN ACTIONS THAT COULD BE TAKEN IN RESPONSE.
01:32:41THIS IS HOSTED BY THE HEALTH AND HUMAN SERVICES DEPARTMENT HERE
01:32:43IN WASHINGTON.