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tv   Varney Company  FOX Business  February 27, 2018 9:00am-12:00pm EST

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everybody republican and democrat should be if you're proposing greater gun safety rules give me the evidence that they work. that your ideas will make us a favorite. >> we know with background check work. >> improved background checks did a lot from '94 to 2002. vfnlgt a great day everybody. this is stuart in "varney & company." >> thank you indeed this is fed day please do not turn your tv u off. we will make this entertaining and that's a promise. good morning everyone. jerome powell he's the new guy in one hour he makes his first public appearance. here's what he's going to say. we know already. he's painting rosy picture of the economy. spending, incomes, welt, all rising -- jobless rate falling for all demographic groups housing slowly improving most importantly, inflation is low and stable. all right, now the fed watches take over reading the tea level the how far and how fast interest rates will rise. for almost ten years rates have
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been near 0 and feds been printing money like never before jay powell has to unweekend that without damaging the economy. let's see how that opening statement is being received on the stock market. fairly well, dow industrials and the s&p 500 and the nasdaq they will all open ever so slielgtly lower. remember, this follows two day of gigantic tbains. there's other news, fedex will not join the boycott nra movement that is intimidated several other big companies and the state of georgia threatens to take away a sales tax benefit from delta if that airline continues its nra boycott. the state to play is this, boycott that will be hashtagged boycott nra as politicized business. and it is trying to silence anyone who supports second amendment rights. and then there's the nfl. commissioner roger goodell will reportedly demand $2 million from cowboys oiner jerry jones
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for his activities during last season's anthem protests. that is not over. but "varney & company" we're about to begin. stay there please. >> all right let's start breaking news, why not? president trump say he's reefed a deal with boeing for a new air force one plane. ashley. >> this was supposed to be a $5 billion deal it initially for two new planes now it is used been in sfts for some 27 years. they're actually ordered by ronald reagan they immediate to be upgraded apparently now deal is struck with boeing through the trump administration to come many 3.9 billion. basically saying that the taxpayer going to save 1.4 billion on this deal the new plane have a new mission communication system a medical facility and executive interior and probably a really big wet bar probably.
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but anyway others on plane probably do. >> he was short -- a huge win and a big success. >> 1.4 billion less than estimates. >> what are you doing? >> laughing at the wet bar cracks. not even noon and we're talking ab wet bar i think that's thrilling. >> president has a deal with boeing, saving money on air force one planes. got it. next case look at this futures again please -- we're going to open ever so slightly on wall street remember we've received opening statement from the new fed chair we know what he's going to say fairly rosy picture about the economies and those small losses today follow two days of gigantic gains. let's see about macy's. they have posted higher profits and look at that stock go. this is a brick-and-mortar retailer and they're up nearly 9% on good earnings. 29 bucks assure. amazon holding above $1500 still way with out there in record territory. and going to stay on amazon
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perhaps the most amazing company in america today but burt is here a man who coined term retail ice agelet get right at it. amazon did you say recently on this program, that amazon goes to 2,000 a share by the summer? >> they said they could and sell a quarter of one amazon position and tboaz to 1770 which is the next stop so another quarter of the position keep half because your listeners have been buying from 500 to 900 a share so still make money. but wall plater is coming on strong with macy's rebunged and macy's stock that's tough too. >> i want a bit more on the strategy for amazon shareholders. a lot of people are now in our audience have a sliver of amazon done extremely well. you're say hag it does go to what, 17, 70, possibly 2,000 so as it goes up, you sell some of your hold physician -- one quarter of the --
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one quarter each time it goes up because you don't think a 1770 or $2,000 price could hold? >> it can't it hold because aman is doing well on web services but failing with whole foods costing them a lot of money, and everyone is figured out amazon so wal-mart combining and wal-mart adding fulfillment centers and costly and amazon doesn't have balance sheet to get into the price war that amazon started. >> i want more on wal-mart. because last week, their stock went from like 108 down to 9192. it is struggled back to 93 we're told they reduced it their -- investment in online sales. that's not true? >> not true they're consolidating their investment between and >> same. so -- biggest investments in and 20 years so wal-mart investing in the future. best time to buy wal-mart in
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years because they're going to be ultimate winners 10,000 more stories go out of business in the retail ice age sadly in 2018. >> so your strategy is if you're an amazon holder, hold it but sell little bits of it as stock keep ruing and put that money that you've liberated into wal-mart because that's where the growth is beginning to be in online and in the retail business. tfntle not a full position in wal-mart but establish half a position. >> we got it. thanks very much indeed. and who could -- go on. kudos to macy's blowout earnings. more jobs, more income, people gaining more way macy's is selling more apparel comp up 1.4% new dream team international business is on fire. their u.s. business and gateway cities great merchants ashley, brent, argyle nelson and new executive team macey become to be winner for a while. >> never gave him up for dead. macy's they're benefiting from a
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lot of their competitors filing for bankruptcy and lick liquidation so comcast they have made a 30 billion dollar offer for sky. challenging the parent of this network, tell me all about it. simply lees -- >> this is a ferocious battle for who is going to own the living rooms and tv sets in europe. icord cutting considered still kicking kids out of the house but nobody knows what it means over there. but this is a big push between comcast disney and -- and basically you know fox. so what's happening now is you watch the price action sky is up nearly 20% disney and fox are under pressure premarket. this is a bit for the 23 million customers that sky dominates paid tv in europe and english premier soccer league. rupert wanted 61% that does not own 25.8 bachelor's degree bid there we have a 31 billion deal
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an now comcast brian roberts is saying i would offer to co-own o sky so long as comcast owns majority it have. >> there's a titanic battle between rupert and brian roberts for control of sky tv. >> that's correct. the door way to pay tv in europe. and that you're here, these titans opportunity of massive growth there. >> there you go. so -- but the u.k. regulated a block box of support. and guns, president trump says, he will get rid of bump stocks himself if congress doesn't come in. fox news contributor charles is with us with washington 250eu78s as well how's the -- president handling the aftermath of the shooting? seems like he's turned, turned this -- situation into an ongoing if i say tv reality show that's wrong
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it's a town hall but a town hall held in the white house. isn't it? >> it really is. stew, i think that it's one of the things that i find most appealing about the president. you know, he sits there. he saw the town hall that cnn held which turned into just a embarrassing debacle for a lot of people. it -- this president refuses to feed grungd to anybody he wants to control and have some part in -- in shepherding this debate through. and so he doesn't see control of these things but brings them into the white house for every one of those cnn things that we've seen that ting went horribly off the rails you see one of the things in the white house where you've got reasonable people not to say they're very passionate about it. they have their beliefs and they're -- some of the parents are absolutely stricken. they want to do something and they want to do something practical and do something. they want to do anything to prevent something -- this horrible if from ever happening again.
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and i say kudos to the president. but one with of the things i don't agree with him on everything that he's said about what he wants to do. you know, banning bump stocks whatever. these are rudimentary devices that evil people will be able to recreate. in home workshops very easily. so -- i don't agree with all of the particular. but in terms of showing the left and showing -- supporters as well, that he's not the caricature that the left makes him out to be -- instead he's -- very reasonable. he's very practical he's not partisan. he really does want to come up he wantses to fix they thinks. and that's how what got him elected i think it will bode very well for him going forward. >> not ideological but what can can we do? >> for the first time -- in my memory of covering politics, you have somebody coming to a situation and we see it with immigration as well. he comes to it from a completely nonpartisan --
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practical approach and again, with immigration i don't agree with what he's proposing with immigration. but it's just so refreshing to have somebody that breaks the mold of all of the idiotic yammer back and forth in washington where everybody tries to politicize everything. and nothing ever gets done. >> exactly. exactly. it's entirely politicized and nothing is done along comes a nonpolitical nonideological president and we get something done. what a contrast what a difference that is charlie so sorry a big news day so cutting you short but we'll see you again real soon. that you think, sir. check those futures again we already know what jerome powell will say with his opening public statements today in about -- 50 minutes time. he's going to paint a picture of a rosy economy we don't know how far, how fast interest ritz are going to rise. but market hads responding thus -- minor declines for all three indicators. new york state quietly working on a plan to stop a cyberattack that could cripple wall street.
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we'll tell you what they're doing to prevent a massive hack on our financial system. news on apple, there are reports that is getting ready to lawfnlg three new iphone model it is this year. all based on the 10 our favorite tech watcher gene coming up later this hour on that. and unmanned aircraft not just for the military one aerospace trade group says pilotless passenger and cargo planes could become a $30 billion business in 20 years time. they're talking mammoth drones. after this --
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>> toipght repeat interesting news we broke right at the top of the hour. president trump has made a deal with boeing two new air force one planes which will cost a taxpayer $3.9 billion that's a savings of 4 billion this -- come up during the transition
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then president-elect trump call thed the cost of air force one program out of control. a little gee wiz tech for you. the explosive growth in the drone industry in next ten years joining us no is chief eric banning, eric, are we talking about -- giant 747s that take off, they fly without a pilot nobody onboard the huge drones. is that what you're talking about? >> we're talking about that. we'll get there eventually. what we just issued a market analysis first of its kind that looks 20 years into the future and shows how much innovation and technology is -- coming out of the or after aerospace industry today and a thousand jobs not even in 20 years expect to be 30 billion a year and 60,000 new jobs. the big players in this will be the existing aircraft companies
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i take it beauings of this world. right? >> they'll be a part of that but a lot of new companies that are in this space it's a tremendous boom in technology and innovation and what we're seeing in aerospace. >> not so much of the building of the plane that's going to get the businesses. it's the writing of the software code that runs the planes computers. that's where the growth is. that's where the opportunities and small or companies right? >> there's plenty of opportunity for smaller companies you're right it is not just plans themselves but technology that goes into these vehicle. the report points out the potential road blocks the innovation that's coming out of the industries, is about to outpace the regulatory or structure we've got even the infrastructure and so we have to as a country -- and think about how we regulate differently. currently the regulation regulatory system is focused on safety as it should always be. but it's not designed to deal with the amount of craft that are going to be in the air space
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even today. or o the pace of innovation that we're seeing coming out of the industry. >> do you deal in commercial drones are you looking at that? i mean, i have property out in rural america i can see getting fedex amazon u delivery by drone that will be very easy and very -- cheap i think. you're looking at that kind of thing as well? >> that's what this report is focused on. commercial, large scale is uaf. unmanned aerial systems. >> can't you fly a jet liner now without the pilot? you have to take off and land with a pilot i got that. but if i'm traveling new york to california, doesn't a computer take over soon after i've taken off? >> you have a pilot in the cockpit, and for a long time even with these unmanned aerial systems -- safety concerns i think they'll still be a human somehow in the vehicle. but i suspect by the 2040 wool be seeing large vehicles carrying cargo and carrying
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passengers without pilots onboard. >> with the 2040 so you're looking at 20 years from now you're going to have giant drones with no pilot onboard. interesting. it would be a slow replacement but it will happen. >> okay. eric thanks for joining us sir, we appreciate it. interesting story to the future. got it our real drama, as nfl -- commissioner roger goodell reported to getting ready to hit the cowboys on at jerry jones for a multimillion dollar fine for conduct detrimental to the league yes we will have that story for you. it's a good one too. back in a second.
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attention homeowners age sixty-two and older. one reverse mortgage has a great way for you to live a better retirement... it's called a reverse mortgage. call right now to receive your free information kit with no obligation. it answers questions like... how a reverse mortgage works, how much you qualify for, the ways to receive your money and more. plus, when you call now, you'll get this magnifier with led light absolutely free! when you call the experts at one reverse mortgage today you'll learn the benefits of a government-insured reverse mortgage. it will eliminate your monthly mortgage payments and give you tax-free cash from the equity in your home... and here's the best part... you still own yohome.
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call now! take control of your retirement today! >> you better take a look at oil. this just coming to us from the international energy agency. they say we, that is america, we are set to become the world's largest oil producer as early as this year. that mean, with we'll produce more than saudi arabia there already and more than russia biggest output of oil in the world from america more on that couple of minutes. 63 box barrel is the price now this. nfl commissioner roger goodell reportedly wants millions of dollars from dallas cowboys owner jerry jones spell it out m >> so league's team owners goodell saying jerry jones crossed line when he threatened to sue six members of the nfl's
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compensation committee to given goodell a five-year 200 million contract. jones at the time said, hey wait a minute this guy very best deserves maybe incentive based contract because time don't forget ratings were dropping. nfl had this huge controversy with players kneeling during the national an they will and jones was also upset that he's runningback to dallas cowboys has been given a six game suspension for domestic abuse charmings. so he was furious. he since back down from suing but in the aftermath of all of this the owners pressuring to say look we immediate to get money become to legal charges imposed bids jerry jones. fng all right liz who do you think really damaged football? >> i think it's roger goodell is critics say because he didn't stop the onfield protest. he could have said to football player you can protest that in my kroo phone we'll supply you outside the stadium or off the field don't bring it on your work place which is the field.
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so lew holtz said that so roger a contract -- he's now saying you have to cover our two million dollars in legal cost for this fight with you. but really the, this -- this football protest not come at the worst possible time for the nfl league when streaming is coming on full bore. people cutting the cord. >> what a mess absolutely mess. extraordinary thing for goodell to do. i want two million dollars off you because you are -- he's gaining in the year from the other team owners who didn't like what jones did. that's the the problem for him. football suffers case closed. what happens next season going to do this begun? >> good question. ad lib what prompter said ab lid future and opening bell i can do that. down about 20 odd points the dow industrials. down 4 from the s&p. 4 for the nasdaq i think it is going it a pretty flat opening to the market this morning. even though i think we've gone up 7800 points opt do you in the
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last two trading sessions how about that. stay with us please, that bell is a coming.
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[applause] >> ladies and gentlemen if i say this is fed day, please do not turn your television sets u off.
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it is fed cay, it is porpght for the market and believe me, we're going to make fed day entertaining. just wait until you hear from maxine waters. [laughter] believe me it is going to be fun. boom here we go. it is 9:30 eastern time on this tuesday morning. whatever, i can't remember and we're and we're running mildly -- okay. two points up 6 points up. it is an even split winners and losers on the could dow 30 but m line we did not open lower as the futures indicated with actually opened just a fraction higher. is it the same story on the s&p? he asks -- show me please. yes it is. we're up .04%s that one point how about the nasdaq i said that's the home of the tech companies down -- i say flat. yes. down two points three poins for that down .05%. you better look at the tenure treasury bond yes this is the fed day. they are concerned about
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interest rates and so -- >> coming don down it goes it was 287 a moment ago now it's 286. you have to check amazon that's a first thing you to every single day and yet again, an all time high for the most amazing company in the world. 1522 is your price. up 19 cents. now it is down 19 i should have said -- [laughter] we told you earler with two new air force one planes to build them for 1.4 billion less savings to the taxpayer that is. now boeing has a statement what do they say? let's be honest boeing saying, it is proud to build a new generation of air forces one providing american presidents with a fine white house and outstanding value to taxpayer president trump negotiated a good deal on behalf of the american people just as president wrote it. >> love that. [laughter] boeing stock is really doing very well i have to say.
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now this -- new fed chair he testifies on the hill. very is shortly -- in advance of that, who is with us on this fed day? ashley webster -- [laughter] ashley webster elizabeth and mike murphy and d very okay dr you first we already know that mr. powell is going say the economy is fairly strong. jobless rate falling, income wealth spending all rising low stable inflation. what do you think that means for interest rates about how far and how fast he's going to raise them? >> i think he is going to be firmly in the don't rock the boat camp stuart. he's going to -- he's going to try to maintain a good thing. the unwinding of that balance sheet we've talked about he's going to try to do that very gently, and i think we've talked about the fact could it be a four, five interest rates hikes we're not sure where that you are going but he might be damping that a little bit. >> market agrees with you
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because we're up if the market right if the market thought his opening statement that we wouldn't get four or five interest rates quickly that would tank. >> what the market doesn't like stuart is unserpght. the market doesn't want to be guessing on how quickly they're going to -- remember weeks ago in the middle that have selloff are they going to have to raise 50 basis poins that's got a lot of people concerned. as long as he does a good job of laying out his plan for the market, still it is data depend we have to see how numbers cool in quarter oh quarter month over month as long as he lays out a clear concise plan, we're in good shape. >> interest comes in the q and a, when politician get to ask in questions -- but i suspect he's going to get a lot of questions on the tax cuts and get questions on gun control for evens sakes. >> if ben questioned from the maxine waters about fiscal policy and get more money to buy this bridge in pennsylvania or whatever. so those are -- that's where the fun times will
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come in this -- >> we did promise it will be entertaining and i have to promise it will be entertaining down nine by the way on the dow industrials as of right now fourmens in. the tenure treasury get back to that 286. now, goldman sachs says, if that yield you see on your screen now if it went to 4.5% bit end of the year. this market would -- tank down 20 to 25%. but that's -- stock prices. it takes that wings they could fly. >> think of like tenure. you can say. if it goes up 70% -- over the next seven, ten months yeah a lot of could happen but i don't see anything tell megait's going to. >> it's nothing -- a statement. really -- >> a little bit in materials of we're trying to influence the fed and public opinion with this -- with this coming out. here's my favorite story of the day. this is called energy dominance and energy independence international agency says that
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we, america are about to become world largest oil producer more than the saudi more than the russians. what's the implication of that? >> well i'm going to let my inner engineer come out here stuart. we are doing this because we're getting better and better every day. at getting oil out of the ground the same number of wells we haded when we were talking about how many wells are out there remember when we're talking about every day. producing a lot more oil and what it means for prices, however, is sort of the opposite is of optimism if to you love high oil price this is going to put a cap on oil prices if we get up to as a the ice -- said 11, 11 million barrels per day rate by the end of the year. >> that's a big deal. you know the interpret was not the only game changer it is horizontal drill and tracking a big skill. game change, i mean this is putting a check on russia in the middle east. no shots fired. no people killed. no tanks deployed wow this could
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really reset the go political balance for the world if u.s. is become a dominance supplier of oil. j if you keep a lid on prices you keep a lid on inflations too. check the big board up 23 points the score basically is 25,733 that's where we are. so we're within a thousand points about 800 points away from the all time high. comcast makes a 30 billion dollar off. 31 billion offer, for sky -- challenge the parent of this network we'll have more on that in a second don't ever forget ge we with try to but you are can't $14 a share and overhauled their board of directors dropped some of the longest serving people and they've named outsiders not done the stock that much good. but it is close to 15. netflix record territory, ordered first air bike original series called gin launches next year. netflix really close to $300 a share.
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weaker sales of autozone and i don't know whats trouble is there but that stock down 42 down that is 6% lower on autoa zone. seaworld lost more money ceo steps down that company is in trouble. 16 bucks per share. macy's, he's a good story. high or profits, they reported before the bell this morning. much higher profits for stock is taken off, 12% higher. $30 per share give me the story. >> do not chase macy's. >> so if you're contrary investor and it was time the tile to buy saying they could be going out of business now it's had had a 50% rally off the load has good numbers so doapght chase this. look for where there's real growth i believe the stories intact that old -- school retail reverse going to have a hard time competing with amazon. >> but big retail expert says they have a dream team in place
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to turn this around and already working. >> yes. looks like it. amazon has a bit of a dream team themselves so i just think that way -- consumers go out to get a apparel the way consumers shop has changed and it is never going back. >> all right we're going to talk guns momentarily. fedex is keeping the discount offers for nra members. delta and many other o os say no way they are keeping they're getting rid of the discount and the perk which is they used to give to nra members. fedex is up, not really affected by this news. what i don't like frankly, is the plit business. >> companies to put a smart spin on it for themselves their brands need to start talking what about they're going to do for any special interest group opposed to the era or for green piece. they need to talk about what they're going to be doing to
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discounts to generally acceptable any interest group as opposed to doing these politicized things. >> sorry it goes yongtd fedex amazon, google, apple and roku face pressure to drop the nra as a business part orer in as well. so it's not just fedex. >> that's the most i really don't like that. because that's free speech. nra streams videos on apple, netflix roku boycott nra people want to stop that. stop amazon and google and roku and apple stop them from running those videos. think that's fund mentally wrong. >> good for putting their foot down saying no. because this was a becoming giant role -- >> somebody has to stop the rot at some point. and fedex is there. it's that time 9:40 eastern got to say good-bye to dr and to mike murphy great opening to the
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day today even though it is fed day we were entertaining. [laughter] oh. check that big board we're up 52 points. 25,761. apple how about had this? getting ready to launch what -- three new iphone models this year. can they hold their own against samsung's brangd new galaxy s9 smart phone? gene is on that he's next and johnny walker has a new name change johnny is now jane -- no -- jane walker. we'll be back. [laughter]
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>> we're still up not but much 29 point higher. at 25,739 please remember we're
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up 700s points on do you and we have jpmorgan the bank, they're going make more money in the future. nicole, you've got to tell me why they're saying that. stock just hit an all time high a moment ago as well but they're came out in investor day conference they talked about the new tax plan lower tax rates. higher interest rates and that could lead to, obviously, annual pretax income giving them roughly another $10 billion in net income using 20% tax rate. so the analysts said that's pretty much on point. they also talked about stock buybacks. they're in a good place and, of course, under jam knee out of financial crisis last but not they have a card which is for millennial for younger folks with a 90% renewal rate and people are loving this card dining, federal, all kind of
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rewards so doing well. >> whatever. nicole thank you very much indeed love that story now new york state working to prevent what's tribed as a major cyberattack that could bring down a financial system. tell me. >> they've just quietly launched a new cybersecurity regular regime for all of wall street and it says if you don't have a cybersecurity officer, or you don't report a hack within 72 hours if you don't follow our rules we could find you wall street bank up to -- up to 1% of total assets now vermont and colorado may follow there could be a patchwork of different cybersecurity regimes across the country. the federal government could -- this is basically in light of the wake of egg by fax hack of 145 million plus customers. the eu is also moving forward on its cyberscut security rules for bank and companies up to 4% of sales if you don't follow the rules. >> so they're putting owners on the financial companies --
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you keep this stuff private or else. >> save or else big fines. a it will reportedly coming out with three new iphone models all based on the iphone 10. come on in. tech watcher loop ventures managerring partner gene. what is this? three new versions of the 10 what are they big, small ones. what is it? >> you're right give credit to mark from bloomberg from breaking this but stuart there are three phones but i want to zero us in on the largest of the three phones thals likely be coming out on this fall and give some quick numbers is that this tone the large etion one is going to have -- dimension of 6.5 inches versus largest iphone of 5.8 that won't understand how much that is. but credit to loop venture team here for doing good algebra 25% bigger and toipght quickly
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explain why 25% is a big deal because half of the iphone users the there. there's about 800 million used iphone is their single device they don't have a computer and based on that. that is a very appealing phone. so this is going to have an impact on the growth rate stuart. >> i agree with that look yopght have a computer in house i've got this. this is what i use and if you are -- say -- if you offer a screen i'll take it because it's like a computer that you walk around with. and it is much easier to use so -- are you like me in favor of this new and bigger version of the iphone 10? >> yeah, i think consumers are going to love this. it is going to investors will like it too. apple has all time high right now. but investors always thinking about what's going to happen next year and big bear story on apple sears was that there's not going to be a fall through in growth in 19 and i think kiewrl
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lts like this but investors will like what it is going to do to the street estimates for counter19. >> okay how does it stack up to the galaxy s9 they came out with this just a couple of days ago their new to of the line smart phone stack them up to 10 and versus galaxy s9. >> so this is going to be about a 10% bigger screen. so -- think of this as the monster monsters this new iphone that will come out in the fall. so in screen size this is important for people for the reasons that we talked about. as far as from a feature to feature basis what the new iphone is going to really be playing up is still this augmented reality team i know we've talked a lot about that. but this ability to take the virtual world in overlay it. something that sam sunk is still struggling with to kind of integrate with most of their tones. back to the new bigger version of the 10 that the a is is beginning to come out with any idea on the price? >> it is going to be higher than
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the current ieg phone 10 the largest capacity is 1200 right now. my best guess is this is probably a 1300 phone for the lower capacity and maybe 1400 per the higher capacity. >> wow. wow who would have thought? i mean that's right up there with -- desktop just about. would you go for the bigger iphone 10? >> i will. probably not right person to ask because aisle try is it stay current with a apple product but you're seeing areas like china for example is -- stabilized for apple. i think that market in particular which is 15% of apple sales you're going to see a spike in demand for larger factor. >> tim tim cook is doing very well in china over there a lot i understand. all right gene thanks for joining us sir appreciate it. good information we'll take it. check the dow 30 where are we? we're up 34 point on the dow
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industrial and a majority of the dow stocks are 30 of them a majority are in the green. dozens of florida lawmakers now calling on governor rick scott to suspend scott israel. they say he failed to act on tips that could have prevented the florida shooting. sheriff israel says he's not going anywhere. judge napolitano coming up next on that.
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attention homeowners age sixty-two and older. one reverse mortgage has a great way for you to live a better retirement... it's called a reverse mortgage. call right now to receive your free information kit with no obligation. it answers questions like... how a reverse mortgage works, how much you qualify for, the ways to receive your money and more. plus, when you call now, you'll get this magnifier with led light absolutely free! when you call the experts at one reverse mortgage today you'll learn the benefits of a government-insured reverse mortgage. it will eliminate your monthly mortgage payments and give you tax-free cash from the equity in your home... and here's the best part... you still own yohome. call now! take control of your retirement today!
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>> fitbit says it is newly launched smart watch not doing quell. raising some concerns about the company's ability to make a profit again. the stock is down 9%. $5 a share. three dow stocks jpmorgan boeing and nicki they're all breaking out to new all time highs. two of them have pulled bag a little boeing still going strong 366 on boeing now this. the retired florida florida deputy, criticized for his performance during the florida high school shooting is defending his actions. and separately, there are more calls for sheriff israel to resign. all rise judge andrew napolitano is here. judge, this these cause for the sheriff to resign scott israel. it's not a legal problem there's no legality involved here. this is whotion got the
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authority to fire this guy isn't it? >> well the governor has the authority to suspend them i don't know if governor has the authority to fire him but he certainly has authority to suspend him and a lot of pressure in governor scott to do it. but here's the issue, the -- the school resource officer fancy praise to present the school said he was not a coward but he was instructed, do not rush into an active shooter without backup. he rifed at the school he was not sure where the shooter was. he heard the sounds of gunshot and he immediately radioed for backup and waited for backup to arrive. if that's the protocol, then he is -- he's an improperly maligned person in some states like new york and new jersey that's not the protocol in new york and new jersey first fern at the scene rushes. risks his or her life to get at the shooter that you do not wait for backup. but in florida if -- if the lawyer for former deputy
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is correct, the protocol is to wait. now we don't know what the protocol is yet. and we have to take a look at it should sheriff israel redesmine resign it depends on what the the facts are. people were poorly trained if the protocol is to rush in, and this guy thought the protocol was to wait -- that is the sheriff's fault. that he had somebody who was poorly trained there. >> and governor has legal right to do that does the sheriff get his day in court? does he get due process? >> yes he will get a due process state law would have to give anymore court. yes. the governor couldn't just fire him like that but a hearing as to whether or not he misconducted in office or whether he was. for example, was he in charge of the training of this person? was this person trained properly? were the three qhor who arrived first properly did they do what protocol said even though some
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of us it seems it was wrong if it says we. it sounds like a legalistic mess. but -- the truth will emerge and changes will be made because of what happened. am i right? >> yes. i mean i'm on target here. >> you are on target now you're not talking about the young people lobbying congress to change gun laws. you are talking basic street level exercise of law enforcement authority and broward county florida. who does it? and how are they trained to do it? that's what you're talking about. and what protocol for their actions. >> absolutely. judge good stuff appreciate it. now this. we're indeed seeing the politicize of business because of the hashtag boycott nra movement. i don't like it. my take on that, top of the hour.
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stuart: the left has organized a boycott of the nra. businesses are being pressured to cut any ties. business is being politicized. this is not good. regardless of where you stand on guns you should be able to patronize a business because you like its product or service. it is your money. it is your choice but the left is going after any and all businesses that have anything to do with the nra. it is a shame and shut-down operation. it is intimidation, pure and simple. advocates of the #boycottnra movement have had some success. delta was offering discounts to nra members attending their annual convention. delta has discount deals with hundreds of groups but the nra discount has now been withdrawn. same story at united airlines, at best western, metlife and many other businesses. businesses not allowed to do business with a group that supports the constitution's second amendment. they're not alone.
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they're not done i should say. the boycotteers, so to speak, they're pressuring apple, google, roku, amazon, which stream nra videos. they are highly effective and free speech. the open expression of opinion, essence of our democracy. the left says, shut them up. there has been response to boycott challenge. fedex will keep relationship with nra. in georgia, delta's home, lawmakers threaten to withdraw a 50 million-dollar sales tax exemption if the airline doesn't reverse course. that is it. boycott people are winning. regardless of your position on guns, that is not good. we have the freedom to associate with any legal company or group we choose. we have the freedom to choose which products and services we buy. #boycottnra does not want us to have those freedoms. they don't like guns. they limited freedoms of everybody else to get their way.
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our universities have caved. i think it is time american business took a stand. get up and say, we serve everyone, and apple, google, roku, amazon, they should stand up and say we serve everyone with free speech because that's what is at stake. that is what is under attack, free speech, and our constitutional republic. the second hour of "varney & company" ask about to begin. ♪ stuart: there is a lot happening at this hour and we're on it all. jerome powell, the new fed guy testifying on capitol hill. first time we'll hear from him. we'll bring you the question and answer section which should be entertaining. republicans leadership, they hold the weekly news conference. they could be talking about gun control. we'll certainly be watching for
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that. first breaking economic news or data i should say. consumer confidence numbers. what have we got. ashley: blowout number, 130.8. what does that mean? not much to anybody but 130.8 means stronger than january. this area has been already historically strong. people optimistic about the job market, the wage growth and impacts of tax cuts on their paychecks. put that together, consumer confidence extremely strong in february. stuart: very strong economy. ashley: very strong economy being reflected in optimism. stuart: very much so. got it. check some individual stocks. will start with the big tech names. look at them go. facebook is down. amazon, actually down five bucks. microsoft up 17 cents. alphabet down $8. apple is up 57 cents. am sop earlier hit another record high. look at netflix. that is the third day in a row that stocks has gone up and hit new record highs. it is pretty close to $300 a
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share. there are three dow components which earlier today hit all-time highs. jpmorgan, boeing, and nike. by the way, boeing announced a deal with president trump for new air force one planes, which will save the taxpayer $1.6 billion. is it 1.4 billion. $1.4 billion in savings. mark the likes it. macy's posting better profits and better sales. more on that in a moment. stock is up 31 cents. comcast making a 30 billion-dollar bid for sky. that is challenge for the parent of this network. more on that too. more on the markets, school shellady, tjm senior vice presidents. what are you wearing, for heaven's sake, where are you? >> back in london. here we are. stuart: you look like a canary in a coal mine. i won't say a word. are you still with me? >> all right. stuart: the market wants to go up. are you with me on this?
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>> well, we haven't changed any behavior, stuart. yeah, you're right. the behaviors should have changed but this selloff or slash collection or rebound will not scare anybody out of any bad positions unless those were in vix volatility selling positions. looks like we're back the way it used to be but i still think that is a little bit too early, that the market will slowly, surely wake up because some yields in the treasury markets will begin to go against dividends and the stocks. so for once there is some competition for that money. stuart: goldman sachs says, that yield on the 10-year treasury goes to 4 1/2% by the end of this year, the stock market will really come down 20, 25%. what do you say to that? >> yeah, we've seen actually other research that said, maybe even 3 1/2 to 4% could cost a 25% move lower. that could cause 25% move lower if we have one. not the actual number, stuart.
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how quickly we get to the interest rate. if we go surely over six-month period of time, the market has a chance to digest that, that is a different story. if we suddenly go there, that is what made the market wobble last time. it is velocity of the move, not the actual number. keep in mind the velocity, no the actual 3 or 4%. stuart: jerome powell is talking about trims and state of the economy. the market is pretty much dead flat. we're up nine points on the dow industrials. scott, stay there for a second. bow tie and all. we'll be back momentarily. want to get back to my editorial, businesses being pressured politically by the #boycottnra movement in the florida shooting. delta once offered discounts to nra members. those discounts are withdrawn. georgia is threatening to block a new tax break if they don't
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withdraw the protests. i say businesses are being pressured and politicized. i don't like it. what say you? >> who is doing the pressuring and bullying quite frankly of these private businesss who have been doing not only business with the nra but a number of other organizations like planned parenthood for example. they offer a number of discounts to a number of political groups by not taking sides n this case we've seen this online mob led by groups like think proggeese to go after private businesses to sever ties. they are not just stopping there. they want to go after all the banks funding this gun violence problem in america, but on the other side of it, boycotts work both ways. a lot of people i talked to members of nra, thank you for handy list of businesses i will no longer patronize as a result of them caving to this mob and treating me like i'm the problem. the nra made up of people. it is not a big bogeyman pulling strings on capitol hill. it is made up of millions of
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people who have a say when it comes to fred comes in this country. stuart: i think a greater threat to free speech. >> of course. stuart: because these groups you mentioned. #boycottnra, as you said, liz, they're going after roku, amazon, apple, because they stream nra videos. >> right. stuart: they want to shut them down. >> right. stuart: i'm sorry, that's wrong. you don't shut down free speech. >> absolutely wrong. we see it all over the country, see it on college campuses this is the playbook. don't want a real debate. they want to shut you up, act like you don't have argument as american citizen on equal playing field in terms of your civil rights. they don't want to talk about the real issues here. they don't want to talk about the failures of the sheriff's department, dozens and dozens of times. they don't want to talk about the fbi's failure. they want to scapegoat the rights of american citizens with government officials backing them. they're going after private businesses. they will see the consequences. delta will make a decision
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around 3:00, whether they join this online mob to go after nra meetings. stuart: delta has already withdrawn the discount which they offered to nra members. >> they will make a decision whether they reimplement the discount because their tax break is on the line. stuart: really? that is fascinating. that is fascinating. >> ceo is panicking right now. having a hard time. stuart: stand up. take the heat. come on. liz: tax break in georgia is worth $40,348. stuart: that will be drawn if delta doesn't reverse. >> we'll see what they have to say. stuart: one last word on the president's handling of the shooting in florida. i thought he brought everybody together in the white house, on several occasions. ashley: yeah. stuart: you heard from everybody. there were impassioned speeches from both sides here. he listened to the whole lot and in a non-idealogical way he is taking what action he can. i approve. what do you say? >> he is setting the example for
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listening to all of the ideas. that doesn't mean all the ideas will be followed. doesn't mean they hold up to scrutiny in terms of facts or constitutionality. instead of acting like the left, shutting people out, damaging their livelihoods and businesses he is listening. that is what the left should be doing. this is the way they operate. they want to shut fellow citizens out because what they think is not allowed to be heard by rest of the country. liz: president said you could fight the nra. you could fight them. and question is, what can he do by executive order, right, with the bum stock ban and the like. stuart: what politician, what gop person said you can disagree with the nra. you can't fight with them occasionally. ashley: can't think of. liz: the fight is being non-prolit sized. either democrat or republicans but stepping into d.c. with new way of doing things. >> one more note. you talk the about backfiring
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this. might work with businesses pulling out of nra. people don't join the nra to get discount at hertz. i seen more people sign up or renew memberships in the nra than i have in last cowell of years. so people who are not gun owners signing up to be nra members for sake of liberty about and civil rights. they are not gun owners. they're still sighing up saying this lynch mob on line has to end when it comes to people with different perspective and exercising second amendment rights. stuart: katie pavlich, with you. >> good to hear. good to be with you. stuart: talk about macy's, the department store chain. they reported really good sales and profits. that stock has gone up 11%. come back in again, scott shellady. what do you make of that? this is bricks and mortar company doing well. what is going on? >> we're doing a little bit of a rebound with some of those with wherewithal. obviously still amazon's space
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and online versus bricks and mortar will be huge, huge struggle. they have done well getting rid of some of their space. done well doing different things within the stores for the shopping experience. one quarter doesn't a season make. we still have a long way to go. it is still amazon's area but not only amazon, right? there will be room for another macy's or walmart there. one quarter does not a season make. i would like this to be a trend. good to see somebody get a bit of life and wind under their wings. stuart: general electric, they overhauled the board. they have taken out some of the longer-serving board members. they brought in some insiders. the company obviously is struggling to restructure itself. the stock this morning is up 3%. it has reached $15 a share. do you think maybe ge hit a bottom yesterday at $13? >> you know, i mean, it is hard to pick the bottoms on this one,
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but i still say this. they have seen a slow degradation in that stock price. they have a cash issue. they're trying to do what they can do with their board. what, how far is it going to go, to zero? use common sense here. it will not go to zero. but at end of the day you will not risk 15 bucks. not risk 13 bucks. at some point in time enough is enough, a low is a low. this is once they get their things together we'll see common sense come to the table again and slowly but surely they get their legs underneath them as well. neil: when are you coming back to the united states of america, scott shellady? >> i will come back next week if you want me to stuart. i will come to new york. stuart: are you attempting to establish a identity with the bright yellow bow tie, skiing sunglasses in london, for heaven's sake and a cow jacket? >> stuart, i had a black tie, i started looking too bland, black and white. i thought i would spruce it up a
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little bit. maybe i spruced it up a little bit, who knows. stuart: no, you stand out. in television that good. like a brit i can accent, stand out it is good, sometimes. scott, you're done. come back see us real soon. >> all right. stuart: let's get to by the way put up the big board because this is important. we're up 65 points. you're looking at u.s. debt. now looking at the big board. 67 points higher. a backdrop story here. jerome powell is testifying before congress about the strength of the economy and the low level of inflation. at top of the hour we received blowout numbers on consumer confidence i think it was. ashley: yeah, exactly right. stuart: and now we're up 72 points. 25,700 is the number. please remember, we're up 700 points in the last two trading sessions. we're up again this morning, as jerome powell talks about interest rates and the dollar. liz: just about wiped out that correction. we're 2% off, off the record
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highs. stuart: correct. 26,600 was the record. now we're pretty close. come in iowa congressman rod blum. congressman, great to see you. i want to share your news with our audience. do you have that $300,000 check with you, please explain to our audience what you're doing? >> good to be it with you this morning, stuart. i'm from iowa, but my cow print jacket is at dry cleaners. i apologize for that. >> no, you need a corn jacket. >> i have a check for $275,000, payable back to the taxpayers of this country. we underspent our $1.3 million budget by 20%. we had 20% savings, stuart. this is the amount of money we saved in 12 months in our congressional office. and i know a lot of the career politicians and a lot of career bureaucrats in this town would laugh at this kind of money. that is exactly the reason we
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have $20 trillion in debt, because a billion here, a billion there adds up. stuart: far be it from me, a mere tv guy, sir, to lecture someone like you on government spending. do you know in government, if you're alloy indicated certain amount of money, if you don't spend it, you don't get the next year. >> absolutely correct, stuart. one of the things i bemoaned about washington, d.c., since i got here three years ago. i'm a career small businessman, stuart, one of the reasons that drive me crazy, no incentives in the federal government to save the taxpayer money. there is only incentives to spend every dime plus 10% of what your budget is. we're trying to lead by example. i computed this number, 275,000, stuart, we could buy metal detectors with this money for he have single high school in my district in iowa. stuart: okay. that is a pretty good message. i'm glad you delivered on this show because our audience
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appreciate that kind of thing, sir. one more for you. president trump while meeting with state governors. the federal government will provide funding for school safety. what do you say to that? where is that money coming from? >> i have, great question, stuart. over last two weeks we need to protect the high school students the same way we're protected in congress. you can not get into my office building in washington without going through metal detector is manned by an armed guard. we should have an armed guard with a metal detector in every high school in the united states. this would end school shootings inside school buildings oh night. i could buy a metal detector for every school in my district with savings in my budget one year. stuart: congressman, thank you for joining us. >> thank you, stuart. appreciate it. stuart: fed chair jerome powell, he is now testifying before the house financial services committee. he is actually testifying at this moment. we know what he is saying because the transcript of his
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speech was released earlier. he is basically saying that the economy is fairly strong, jobless rate going down for all demographic groups. consumer spending rising, incomes up, wealth up, housing improving slowly. inflation is low and stable. come on in, peter morici, university of maryland, tenured professor joining us this morning. >> coming to me? stuart: yes i'm coming to you right now. i'm not coming to actually visit but -- >> producer was talking in my ear. stuart: happens all the time. >> yes. stuart: i actually hear voices in my head all the time. that is terrible sign. don't make me cough. now then, jerome powell, a rosy picture of the economy. low and stable inflation. so why is the market up 40 odd points when there is you know, possibly a series of rate hikes coming, if you have got such a
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rosy economy? >> well the message in the statement was that the rate hikes would continue to be as expected when janet was in the helm. that is basically they would be gradual. i read the statement to mean three increases, not four. the only thing disconcerting in the statement was the last paragraph where he made a bow to the taylor rule. i find rules like that to be very unsettling. they imply a fed not going to be keeping its pulse on the data. i think that was a bow. i don't know why he made it. it is kind of cryptic. stuart: okay. for 10 years we've had virtually zero as our interest rate, cost of borrowing money. it almost at zero for 10 years at the same time we've been printing trillions and trillions of dollars. well that has come to an end and it is jerome powell's job to unwind those two positions. what's your judgment about how he can do it successfully without damaging the economy? >> well he is really not going
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to do a great deal of damaging by unwinding. a good deal of money sitting on books from the banks. bernanke made observation when the unwinding is done, the fed will have much larger balance sheet, $3 trillions than they did before. the banks themselves are holding a lot of money on deposit at the fed. as a consequence it is not out there causing trouble. my feeling a lot of this is taking up some slack in the system. we will emerge from this very well. also with the economy growing more rapidly and getting a little bit more inflation, i think a little more than his statement would indicate, the real rate of interest will still be very moderate. going into the tax cuts, the corporations had trillions of dollars on their books. well now they have more trillions of dollars on their books. so my feeling is that we have lots of liquidity around. cost of capital is fairly low. we'll continue to see business investment. bringing interest rates up to moderate level, federal funds rate over three years to 3% is
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hardly threatening to anybody. stuart: peter, do you remember what we used to call the goldilocks economy at the end of the 1990s? very little inflation, relatively strong economic growth, very strong profitability and a stock market that went straight up, certainly nasdaq went straight up? are we kind of close to those goldilocks scenarios again? >> close, not there. you know, the u.s. economy, for 200 years grew at 3% a year. and then came along barack obama. we're gradually unshackling ourself, what basically the pessimists. you hear in the bias in the economics profession. if you read the syndicate, for example, where all the establishment economists from places like harvard, they call the president a demagogue and all this business. they're terribly pessimistic. they're moaning and groaning as he unshackles the economy but the reality is the u.s. economy is starting to move into a very favorable posture.
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and now we're going to see the great awakening of technology. all this artificial intelligence and so forth, the automation that will follow, is going to be very profound. it is almost like the mechanization of agriculture, building of the transcontinental railway, the industrial revolution, all those kinds of things were epic-making events. we're witnessing that right now. stuart: give me an example of the introduction of artificial intelligence in whatever manner you care to choose, give me an example how it really changes our society and gives a huge boost to productivity and the economy? >> you carry this around everywhere. 10 years ago, you were chained to your desk. you left your desk, you were disconnected. now you can access all manner of information and basically work extraordinarily productively. it is very much what happened with word processing.
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you know back in the '90s the pessimists in my profession, they call us the dismal science for a reason. we're saying there has been no productivity growth. i had a friend who run as small law firm here in town, basically, he says, gee whiz, peter, 10 years ago we had four lawyers and 11 clerical people. now we have 11 lawyers and four clerical people. i call that productivity growth. but yet nobody can find it in the statistics. you have to remember that economists are essentially people that live in little cubicles at universities where they either live off of taxpayer's money, they spend every nickel that is allocated or places like harvard where they live off dead people's money. their connections to the realities of economy about as essential to mine are to figure skating. i can not set on a stand of blades and neither can most economists think effectively about the future. stuart: are you going back to
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the university of maryland after your statements here? >> i'm already persona non grata any way. stuart: i knew it. >> i used to teach. i'm emeritus now, they used to put my classroom next to the door, sneak in, go into the classroom, half hour early, hold my office hours there. if i was ever allowed out into the general population of professors, they were afraid a felony and scandal would happen. stuart: that is pretty good story. i'm inclined to keep you on the air for another couple hours. that was pretty good. >> go ahead. stuart: hold on. i think we still have scott shellady bow tie guy, ski cow scabbing yet and skiing glasses in london. we have low inflation. we have low interest rates. we have soaring stock market. is this a return to the goldilocks in the late 1990s,
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scott shellady? >> not quite, stuart, because there are a few things a little bit disconcerting. i'm not trying to put a black cloud on things. we have situation, lowest day of the year volumewise on friday, second slowest day, but we were up 2.75%, which 170% of our feign. stuart: sorry to got to go to the hearing. >> what should our expectation? >> interest on excess reserves is currently the principle policy tool that we use to keep the federal fund in range that we designate. we have not made a decision in the longer run whether that will continue to be our framework or whether we return to something more like what we did before the crisis. i don't have a schedule for, i don't expect to be returning to that decision in the near term. i would just say that our current approach seems to be working very well.
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it gives us control over rates and market seems to understand it. >> so it remains an open question? >> in the long run, the long run framework, operating framework does remain open, yes. >> as you heard in my opening statement it still remains a concern. you would be hard-pressed to find in the congressional record or any testimony from members of the federal reserve at the time congress granted this power that it would be used to supplant open market operations of the fomc. so i trust we'll have further discussions about that. with respect to normalization, i think you had said publicly that you expect the new normal with respect to the size of the balance sheet to be roughly 2 1/2 to three trillion, get there over three it four years, do i understand that correctly, mr. chairman? >> yes. >> as i understand it though i've not been able to see in the public record the expectation with respect to the composition of the balance sheet. and i believe that currently you're carrying 2.4 trillion of
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treasurys, 1.8 of mortgage-backed securities, is our expectation that is roughly back of the envelope, 1/3, two third ratio. it yours intention to keep the same ratio of mortgage-backed securities? many of us are concerned about the possibility of the fed involved in credit allocation decisions because right now i don't really see a flood path to treasury's only balance sheet? >> no, sir. our intention over the long term is that the balance sheet would be no larger than it needs to be to implement monetary policy and it would exist promerrillly of treasury securities. we purchased mortgage-backed securities in the aftermath of the crisis. that was an unusual practice and it was something that we did in unusual circumstances and those will run off over time and i don't expect that we would use that tool again other than in a very severe situation.
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>> the monetary policy report that came out days ago shows the balance sheet role-off caps. when i'm having a little trouble with, as i look at the charts in the report, mr. chairman, i don't know, you don't seem to have sufficient mbs redemptions that allow you to reach your 20 billion-dollar runoff pace. as i read the charts i think the expectation is by the end of the year we're looking at a 50 billion-dollar balance sheet roleoff but as of today i don't think you have sufficient treasurys and mbs to do that so how do you achieve it? >> in the case of mortgage-backed securities the roleoff is less predictable. with treasurys you know when they mature, you will see the when the roleoff will be. with mortgage-backed securities will depend on level of interest rates and level of people refinancing mortgages.
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as rates go up, refi's go down. you will see slower roleoff. >> should the public expect by year's end a 50 billion-dollar roleoff? >> i would say that the public should expect there will be a consistent, substantial roleoff this year and next year. over the period of maybe four years will get us back to something approaching a new normal. i don't know that you -- >> we don't know the exact pace? >> i don't think the caps are binding in the case of the mba. >> my time is starting to wind down. i would like to explore inflation targeting. so in your testimony it appears the fed is keeping to 2% inflation target. i'm still trying, i struggle with how this is commensurate with statutory mandate for achieving price stability but i also saw from the fomc minutes the most recent minutes, that there was at least discussion about moving from the 2% target to a target range. at least 2% is a linear
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function. a range obviously is not. so i'm really struggling with, how is this commensurate with price stability and also, as you know, some commentators are calling for 3%, 4% target. so two questions, number one, do we have an expectation that the fed will move from its 2% target? at some point, at 3%, 4%, 5%, inflation targeting, have you violated your price stability mandate? >> i'm, our current framework says that the committee would be concerned with sustained or persistent deviations of inflation above or below 2%. so we understand that inflation is going to be buffetted by various factors and that it may not be exactly at 2%. it will be above and it will be below. we see it as symmetric objective. would i say that framework is working. market understands it. we've been trying to get up to
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2% but generally speaking inflation has been low and stable for 15 or 20 years now. >> my time long since expired. the chair now recognizes the ranking member for five minutes. >> thank you very much. chairman powell with permanent voting seat on the fomc and role in supervising some of the most largest and complex financial institutions in the country, the president of new york federal reserve has one of the most important economic policy-making roles in the nation. as you know bill dudley will step down this year and the search for his replacement is underway. historically the new york fed's close proximity to wall street has led to the selection of an individual with close ties to the financial sector. in your view how important is it that the individual chosen is a diverse candidate with demonstrated independence from
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wall street and a strong commitment to the fed's maximum employment mandate and regulatory responsiblities? what steps is the board taking to insure that candidates from diverse gender, racial and ethnic background are given due consideration? if diverse candidates are not important, due consideration are you prepared to exercise your power as chair to reject such candidates to serve as the next president of the new york fed? i know you have a lot on your plate but i have to put this question to you because we've got to do better about diversity, particularly at the highest level. not only am i looking what is happening with the new york fed and the possibility there, we have to look at our own fed and think about how diverse is it at the top management levels. help me out. what do you think about this. >> thank you, ranking member
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waters. i've been involved, this is the seventh process to select a reserve bank president i've been involved with at the fed since 2012. i'm very familiar with the way the process works. so we always insist that the search committee, which is, consists of the bnc directors of the reserve bank hire a national search firm and we always insist and they don't need to be pushed that this, this is something they want to do, we always insist there is highly diverse candidate pool and that diverse candidates are given serious consideration and every chance to become the successful participant in that process. so i can absolutely guarranty you that will continue to be the case. we will always have diverse candidates. we will always have a fair shot. i can not in any individual case guarranty there will be diverse out come but i can guarranty the process will always be working in that direction. >> i appreciate that and i'm sure that you're committed to that but the diverse candidate
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question is a question that many of us have and we don't know there has been consideration for diverse candidates with these very, very important positions and i'm wondering, where do the recommendations come from? how is the outreach done? and what, how can you insure that there are diverse candidates to be considered? >> different reserve banks have done new and different things. we've really raised our game in this area. so, for example, the new york fed has done extensive outreach to community groups and, you know, of that nature, universities, all sorts of things around the new york region and around the nation. in addition the national search firms have a very large presence in the condition date population and know who is out there, know who will be a good candidate. we're always trying to find new candidates and we are too.
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something we work very hard at. we're always interested in having new ideas for qualified candidates as well. so we invite the general public generally to offer their thoughts as well as some of the interest groups. >> you know there is an organization, maybe more than one that is made up of minorities in financial services that include everything from those who are doing management in the financial services industry, working with hedge fund, with equity firms, et cetera. have you reached out to those firm, not you, but do you know if those firms have been contacted? >> i know our search committees and our headhunters reached out to many, many groups of that nature. >> how can i follow up on that? is it possible that know of us who know about these organizations can ask them if they have been contacted and if
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not, how can we refer them? >> we'll be happy to provide you with the contact person at the new york fed who is responsible for the current search. in the case of any future searches we'll be able to do the same. >> well i will follow up on that. i thank you very much, i yield back the balance of my time. >> gentlelady yields back, the chair now recognizes the gentleman from kentucky, mr. barr, chairman of monetary policy subcommittee for five minutes. for five minutes. >> thank you, mr. chairman. thank you, chairman powell for your confirmation. i appreciate your commitment in our conversations for transparency and demonstration of that commitment to date to clearly communicate the fed's monetary policy trajectory. you have noted numerous occasions that the remaining slack may exist in the labor market at least in part attributable to stagnant wage growth n your confirmation hearing a senator on the banking committee, cite ad 2016 fed
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research paper concluding that corporate tax cuts do not translate into higher wages but we have seen a wave of corporate announcements of bonuses and raises since the tax cuts were enacted, specifically over 4 million workers and counting have received over $3 billion in bonuses and raises during the last week and the labor department recently announced the largest increase in wages since the end of the recession. based on these numbers, is the senator in question and are fed researchers that he cites, are they wrong and have tax cuts in fact helped increase wages as as your testimony indicates that wages should be increasing at a faster pace as a result of a more stimulative fiscal policy? >> thank you, chairman barr. it is very hard to trace through the effects of a change in tax policy to things like wage growth and economy but let me try. so, lower corporate taxes should lead to higher investment and the effect is not easy to
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estimate but you would think, and studies find it should lead to higher investment. higher investment should lead to higher productivity over time. higher productivity should lead to higher wages over time. very hard to put your hand on exactly how much that would be. higher productivity is very welcome and will be driven by higher investment. >> clearly wave of bonuses and announcements clearly suggest there is upward pressure on wages as a result of these tax cuts n a 2015 speech you expressed concern that quantitative easing, unconventional monetary accommodation could fuel dangerous risk-taking specifically you said quote, the current extended period of very low nominal rates calls for high degree of vigilance, unquote. can you elaborate? what specific risks are created now that the fed has to watch? >> well i do think it's, this is a time when we need to be alert to a buildup of either financial imbalances or to inflation building up. we don't really see those right
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now. i think i also said that in my 2015 speech. but if you look at the financial stability situation broadly, we do see some high asset prices. what we don't see is the buildup of leverage among households. we dent see, we see banking system and financial system generally being very resilient. so i think the financial stability picture shows at most modest risk. >> if i could point out maybe a possible risk that's out there and have you react to it. that was created by the unconventional monetary policy. as you know, some have blamed the fed for contributing to the 2008 financial crisis by producing an inverted yield curve. where short-term rates exceeded long-term rates. the spread between the two year and 10-year notes was almost 3%. in the february of this year, that same spread is whittled down to half a percent that is 450% drop.
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given the yield curve and economic conditions call for raising fed funds rate, how will the fed avoid another inverted yield curve and are there any plans within the balance sheet normalization strategy to roll off longer term assets more quickly to counteract that flattening yield curve? >> flattening of yield curves in the past as been sort of repurse core of recessions because largely in many prior recessions the fed had to race rates quickly to hold inflation down. that is not the situation we have now. it is very typical for the yield curve to flatten as short-term rates come up, as the economy strengthens and i don't see a particularly large, there is always a risk of a recession at any given point in time. i don't see it at all high at the moment. >> i don't either but it's a risk that normalization after this unprecedented, unconventional policy has created. to dove stale off what the chairman's point was, in point was in terms of roleoff strategy
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it would be a point if there were not enough maturing mortgage-backed securities in order for the fed to hit the monetary roleoff targets. in order to avoid a inverted yield curve do you anticipate selling assets? >> no. i certainly think that i feel our balance sheet normalization plan was carefully-crafted and carefully rolled out and the markets took it without much of a reaction and i would think i would have little inclination to the change the general parameters of it. >> thank you, my time has expired. >> time of the gentleman has expired. the chair now recognizes the gentlelady from new york, miss maloney, ranking member of our capital markets subcommittee. >> thank you. chairman powell, the fed's median projection is for three interest rate increases in 2018. what would cause you to raise rates more than three times this-year? would you have to see a material increase in inflation, faster
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fdp growth, higher wage growth? what would cause you to raise rates more? >> thank you, ms. maloney. you're right, that every quarter, each participant in the fomc submit as projection of what they feel is going to happen in the economy. also their projection for appropriate monetary policy at the december meeting the median participant called for three rate increases in 2018. now since then we will submit another projection, all of us, in three weeks but since then what we've seen incoming data that suggests a strengthening in the economy. we've seen continuing strength in the labor market. we've seen data that will in my case add some confidence to my view that inflation is moving up to target. we've also seen continued strength around the globe and we've seen fiscal policy become more stimulative. so i think each of us is going to be taking the developments between, since the december
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meating into account and writing down our new rate paths as we go into the march meeting. i wouldn't want to prejudge that. >> okay. as you know the last time the fed released its projections for the pace of interest rate increases was in mid-december and since then we've had two major financial events. one was the tax reform legislation and the other was the major budget agreement. so my question is, has your outlook for how quickly the fed should tighten monetary policy changed in light of tax reform and budget agreement? >> i would say that the, my personal outlook for the economy has strengthened since december. and again, each member of the fomc will be writing down a new set of projections and a new estimate of appropriate monetary policy as we go. >> the march meeting which begins three weeks from today. and so, i wouldn't want to prejudge that new set of
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projections but we'll be taking into account everything that happened since december. >> and yesterday the fed governor quarles who is leading the fed's review of postcrisis regulations stated, and i quote, we're not looking to relax regulation, end quote. he also said, and i quote, we're not looking to reduce capital for banks, end quote. do you agree with governor quarles that your goal is either not to relax regulations or reduce banks capital requirements? mr. chairman, i ask unanimous consent to place his comments in the record? >> without objection. >> the way i think about it is this. we have several sort of primary pillars of postcrisis financial regulation that we want to strengthen and protect and those are high-risk-based capital, high liquidity stress testing and resolution. we want to make sure that we keep those strong, and by the way transparent as they apply particularly to our largest
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institutions. i think as we move down into smaller and smaller institutions down to the community banks, we want to make sure we tailored regulation that we're achieving safety and soundness goals without creating excessive burden. that is really way i think about what we're doing. >> and lastly, chairman powell, last week several academics published a paper claiming that the fed's quantitative easing programs during the great recession were largely ineffective at stimulating the economy. new york fed president dudley and boston fed president rosengren disagreed and said they thought that quantitative easing had been effective. so my question to you is, do you think the fed's quantitative easing program was effective? do you believe the fed should keep this tool in its tool box for future challenges? >> i do think our postcrisis
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policies were effective. and i haven't carefully studied that report yet. let me say what the reports try to do, they try to identify the surprise element in a particular fed announcement and isolate that from what was already priced into the market. so most things that happen on announcement day are already priced in. very hard to isolate that surprise element. this paper take as different way of doing that. it comes up with the answer that comes in. overwhelmingly, studies of the effects of asset purchase programs suggest that asset purchase programs did their job, which was to create downward pressure on longer term interest rates through the term premium and, so i would say that is very likely the case. >> thank you, my time is up. >> time for the gentlelady has expired. the chair now recognizes the gentleman from missouri, mr. luetkemeyer, chairman of the
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committee. >> nice to see the banker, actually being the chief banker of this country instead after economist. we look at different policies. i think we have a different perspective and i think that's healthy. so just want to start by talking about leverage lending a little it about. i want to follow up on the fao which determineses that agency leverage lending guidance is rule under congressional review act, therefore ineffective because it was never submitted to congress. in the past same would presumably be true for other agency guidance. i heard reports from banks many of them have outstanding matters requiring attention or mras based on such guidance and they're still being told either by examiners or compliance departments to treat guidance as binding regulations. so although no one seems to be disputing gao's conclusion the word does not appear to be getting out. would you agree that rules are rules and guidance is guidance
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and guidance is not binding? >> yes, mr. luetkemeyer, i would agrew absolutely with that in the case of average lending guidance we do accept and understand that is non-binding guidance. in fact since the gao ruling we made it a point to go out to make sure that message is getting out to supervisors of banks and we're also thinking of, we're in discussions and thinking about other ways we can underscore that. perhaps, putting it out for further comment. >> just left another meeting before i got here, group of bankers from one of the states around the country. we were discussing issues similar to this with regards to the culture within agencies and the ability of change to be taking place, even though we changed the head of the agency, sometimes the message doesn't get all the way to the bottom. when i made that comment, i saw a lot of heads nodding in the audience. there is concern while leadership is changed, good
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intentions may be there, that again, this needs to filter down all the way through the entire agency and understanding needs to take place by everybody, that this is a new way of doing business. that guidance is guidance, rules are rules. there is a big difference between how they're ajudicated and administered and enforced by the body itself. appreciate you taking that into consideration. >> it is an important point and it's a feature of our distributed federal reserve system which i'm a big supporter of the structure of our system. i think we know how to manage that problem. we do a pretty good job at it. we'll continue to try to do the best job that i can. heads of supervision at all reserve banks are in close and constant conversation and discussion with, with vice-chair quarles and others at the board. i do think, i don't sense any reluctance to engage in those discussions. i think it is on us to communicate well successfully. we'll try to do that. >> look forward to work withing
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you on that, told bankers if you see a problem, let me know, i got a chance to talk to mr. powell and myself here this morning. so we'll carry the message. thank you for that. with regards to data security and cybersecurity, this issue that we're working on right now, so my committee has a bill we're putting together, data security, cybersecurity threats have the potential to wreck our economy, wreak havoc with it. we subject financial companies to absurd maze of cybersecurity regulations. iffederal reserve examines for cybersecurity. there is zero harmonization between the agencies. financial firms spend thousands of hours with financial regulations instead of spending systems to protect our customers. do you think this is a problem? >> i think cybersecurity is one of the significant threats and we feel we never done enough to deal with it. our supervisory guidance on what we expect from firms, on
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cybersecurity issues and data safety and that kind of thing. i'm sure we can do a better job. we're committed to trying. >> i know that is an issue that financial institutions in particular are right in the cross-hairs of this because of the amount of personal data that they hold and the risks that are there. there are an easy target. we want to work on that issue and work with you. you sit in a position where you can harmonize those rules and regulations think pretty easily with different discussions and different groups of regulatory agencies that actually meet on a regular basis discusses things. is this ever discussed at all in your meetings with the fed, treasury, fdic, comptroller, any of those meetings? was this discussed at length? >> yes it is. there is a group chaired by treasury which focused on cybersecurity issues which the chair, i haven't attended one of those yet, but as chair i will attend those meetings. it is certainly very big focus
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for treasury and for us. >> my time expired. thank you, mr. chairman. i yield back. >> time of the gentleman has expired. the chair now recognizes the gentleman from california. mr. sherman. >> chairman powell, welcome. as our committee points out you're required to be independent and accountable. you are also required to be tall and short. your opening statement, as mentioned, great exports but you don't mention that our trade deficit has gone up by $60 billion in the last year. and i would point out that the entire economic establishment in this country has made it almost prohibited to discuss the trade deficit, and when, and that's why we elected, that is why the country elected donald trump president. now the chair of the subcommittee boasts that we had a good economy in 2017. he's right. we had obama's fiscal policies.
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obama's tax policies. obamacare, dodd-frank, yellen's monetary policies and our big balance sheet, we had a great year. as a matter of fact, we have been on a roll since 2011. we were closing in on having a high enough employment rate so we would have a labor shortage and higher wages. we were going well and so instead of continuing to be on a roll, we've abandoned those policies and adopted a profligate tax-and-spending policy, throwing away the budget caps, 1.5 trillion plus interest to the debt from the tax bill. but i think that we will still do well because our scientists, our entrepreneurs, our workers are the best in the world, and they will make up for all of the mistakes we're making here in washington. i see behind you, sir, the green shirts that call for full employment and it is not enough to go with the economists definition of full employment,
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say 4%. we need real full employment that causes a labor shortage and desperate employers bidding up the price of labor. and that is also consistent with the fact that many economists are saying that you should be aiming not for 2% but 2 1/2% inflation. that is the kind of expansionary economy that will allow these folks to come back in fancy polo shirts with the! slogan on it in a couple years from now. talking about some workers getting 1000-dollar bonus. yeah, a few have but a family of five's share of the increase in the national debt from the tax bill is $26,000. what greater proof do we need of the need for financial literacy in this country that some
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charlatan can say here's the deal. i will give you a thousand dollars. it is money in your pocket and we'll slap a 26,000-dollars mortgage on your future? now, chairman powell, in your confirmation hearings you said that, i believe, that no bank is any longer too big to fail. i would point out that the biggest banks are bigger now than in 2008 when they came to us and said they were too big to fail. they would pull the entire economy down. we had to bail them out with $700 billion. i point out that the wall street prices in to the value of the bank stocks but more importantly to the value of their unsecured debt and an implicit federal guarranty, an assumption that they will be bailed out. so i have a number of questions for the record but i will actually ask one for you to respond to. we have adopted these profligate fiscal policies.
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huge tax cuts, that are leading to massive increase in the deficit number that is right behind you. then we busted the budget caps. as is, our monetary policy going to need to be more restrictive this year than it would have been had we not adopted these profligate fiscal and tax policies? >> thank you. so, of course when we're setting monetary policy we're focused on achieving stable prices and maximum employment. in doing that we consider many, many factors. all around the global economy, et cetera. fiscal policy changes can have an effect. and changes of this size can have an effect. and, and that can be seen of course in the path of policy. it is very hard to say in advance what that would be. but, the answer it your question, generally we take all those things into account.
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>> so the more profligate fiscal and tax policies the higher interest rates you need to set? all of the things being equal? >> i would just say our own job is to focus not on fiscal policy but on monetary policy. so that is our frame of question. >> thank you for evading my question. >> the time expired. chair recognizes the gentleman from california, mr. royce, chairman of the house foreign affairs committee. >> thank you, mr. chairman. and chairman powell, thank you very much for being with us here today. and i also wanted to thank you for another effort you undertook and that was in 2011, you spent a considerable amount of time with members of the house, trying to walk them through the debate that we had on raising the debt ceiling you were trying to get us focused on unintended consequences would occur if we did not raise that debt ceiling
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ing. i appreciate the time, effort and facts you put forward. you have a flue voice at the fed -- new voice at the fed and i assume consequences of raising the debt ceiling remain? i know that, in august, looks as though the federal government is going to have to borrow or have to roll over 500 billion of debt in august. and if we're in a quasi-default situation in august, then clearly it's a real questn as who would want to purchase that debt and at what cost would they purchase that debt and clearly a premium on that but 10% premium would be a 50 billion-dollar hit right there to the interest expense, but there's much more than that
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that would befall the impact on our markets and frankly corporate debt and maybe i could just give you this opportunity to explain some of the concerns about that issue. >> thank you, mr. rice. of course, we don't do fiscal policy at the fed but i will accept your invitation, it is very important that federal government and government generally be on a sustainable fiscal path, meaning, as the baby-boomer generation retires, we will need to address the significant fiscal issues that are coming to us over time and i think it's important that congress do that. at the same time, the debt ceiling should be something that we always raise in timely fashion. there's no other country in the world has a separate vote over whether to pay bills that we've
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already agreed to incurred and the united states has never defaulted on principal and interest payment and never should and doing so would be, you know, something i would reat hate to see and could bring significant consequences. >> well, i appreciate your articulating that. you've also said that raising the ceiling is afters the first step, the job that must be attacked is deficit reduction and addressing the cost associated with mandatory spending and we heard a similar thing from chairman greenspan, we heard that from chairman bernanke, chairman yellen, we are on an unsays -- unsustainable market and remarks that fed chair raised with us. as i raised with previous chairs, i don't think the american people don't understand the magnitude of the problem that we are fazing and we
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haven't galvanized the political action, what do you think we can do to raise the alarm that the biggest cause of mandatory spending must be addressed? >> well, i think as -- i will follow the path of my predecessor and not become a regular commentator on fiscal issues but rather limit myself to a couple of overarching points. >> fair enough. >> the first that we really need to get on a sustainable fiscal path and the time to really be doing that is now, so and the second thing i will say, when fiscal changes are made, it's important that to the extent possible they be directed at enhancing the capacity of the economy. we can't affect productivity other than keeping prices stable and regulation on a balance basis and productivity is the thing that allows income to rise
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per capita incomes to rise over potential time. we don't control potential long-term growth rate and you have much more authority over that. and to the extent fiscal policy can focus on ways to increase attachment to labor force and create incentives for more schools and aptitudes among labor force and greater investment and r&d, that's a healthy thing. >> thank you very much, chairman. >> the time of the gentleman has expired. chairman recognizes the gentleman from new york, mr. meeks. >> mr. powell, thank welcome, au know the we are going through cra, community regulations and will recommend changes to banking agencies including the federal reserve, my question to you, mr. powell, do you believe that financial firms with
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pattern of discrimination and lending should be considered during cra examination? >> thank you, mr. meeks, so i'm familiar with that process and i think take the point of it to be what i'm understanding about it is to inquire into whether or not cra policies are, in fact, providing benefits to their intended beneficiaries and i think we are part of that, we are providing our own input into that process. in terms -- the answer to your question, i think it is currently the practice that those -- that such consideration are considered in cra exams. >> it is currently but i am concerned that some want to defame cra and take away as part of the process the history as far as discrimination practices and patterns, that's why i'm asking you since the fed --
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since the treasury will be looking at a new -- and i'm a fan, i think we need update cra, but i believe that in looking at cra, you should take into consideration one practice of racial discrimination, and i'm asking you your position on that? >> i haven't taken a position on that. i want to see the overall work that comes out of this and evaluate it on basis. i may welcome to the view that you have but i haven't thought carefully enough about it. >> all right, i want to remind you, sir, that the cra was congress' response to widespread racial discrimination and in the form of red-lining, that was one of the primary reasons of the implementation of cra. if you are even thinking about stripping out practice and patterns of discrimination, you are thereby gutting the reason congress did cra in the first place.
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so it seems to me that that should not even be a part of the dialogue. in fact, as if given to me by the ranking member, we have an article lending discrimination readlining still plaguing st. louis that all the new data shows and we can go from city to city across america, so i have real concerns about your answer just now because to even think about removing that from the cra as much as i am a advocate of renewing because i think that, you know, when you look at where we are now and how banking is done, financial services are rendered, it's completely different than what we initiated but the essence of it was to stop red-lining and racial discrimination. >> let me say that we take a very serious view of any kind of racial discrimination in lending and we look at it through our variety of consumer affairs
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tools and something we take very seriously. >> now, i also, let me ask this question and i will have some follow-ups, i will like to follow up on this matter particularly. but let me ask you this and we can talk about tax cuts, how much of corporate tax savings do you think will actually will go toward wages as opposed to stock buybacks, capital investments and wages? and i want to say this because before you answer, morgan stanley announced estimated that 43% of corporate tax savings will go to buybacks and dividends which enriches just the top 1% of those major investors, 19% would go to merges and acquisitions, 17% toward investments and only the crumbs, 13% to one-time bonuses and scant raises. there's nine pharmaceutical
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companies that have announced over $50 billion in buybacks since the tax law was passed, so how much of this taxes will go into salaries and wages or how much of it will really help the income disparity to increase and grow wider? >> we have particular responsibilities, stable prices, we don't have estimates of that kind of thing. there are many other estimates out there. but honestly we don't have a fed estimate for what the number would be. >> time for the gentleman has expired. the gentleman from minnesota. >> thank you, chair and thank you chair powell for being here. good to see you again. i want to go back to something that, i think, was touched on when you began your testimony this morning, during your confirmation hearing you spoke about the importance of tailoring regulations to fit the specific scope and practices of
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a financial institution. i think your colt was actually even as we have worked to implement improvements to the banking system, financial system, we have sought to to tailor regulations and i want to make sure that your view on continuing the tailor regulations to the specific institution has remained the same, you're still committing to doing that? >> very much so, it's at the heart of what we are doing at the moment which is to focus on smaller institutions and without losing any safety and soundness trying to find out that our regulation -- >> because you agree that we need everyone from financials to small family community banks on
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main streets all across the country. >> indeed. small businesses create a lot of the jobs and small banks have a disproportionate share of small business lending although the big ones lend to small businesses. we want the credit to flow and we don't want regulation to inappropriately create too much burden. >> right. earlier this month secretary mnuchin testified before this committee and expressed commitment to working with congress to make changes in statute to the way regulator tailor regulations based on size of financial institution. would you also support this type of legislative effort where necessary to put these tailored regulations in statute? >> yes, we would and we have. so, of course, the devil is in the details, we could see law changes that could enable to
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better and further tailor regulations to medium and small institutions. >> i want to move onto another topic on importance of getting regulations right to benefit main street and rural america. minnesota sixth congressional district which i represent is home to some of the finest and most productive farmers and manufacturers in the world. many of these same individuals and businesses who are making such a positive economic impact on my district are inadvertently harmed by the current formulation of the supplemental leverage ratio that fails to recognize the exposure reducing nature of initial client margin. this bank capital rule is increasing clearance costs for farmers and manufacturers making it more expensive for them to use the cleared derivatives market. i hope that as you and your colleagues at the fed review the slr, you come to the same conclusion that a coalition of republican and democrat members on this committee have that we
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must recognize the exposure reducing nature of initial client margin in a revised bank capital rule. will you commit to working with us and our colleagues on the ag committee who want constituents to have access to affordable and competitive clear derivatives markets? >> yes, i will. we think we need the leverage ratio as high and hard backstop to risk-base capital and we think that the current calibration of enhanced supplemental leverage ratio is not appropriate, we are looking at calibration. >> page 1 and 5, february 23rd, refers to the labor market. there's a couple of specific entries with respect to numbers of people that are unemployment
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rate at 4.1, essentially full employment but i believe it's on page five where it references the percentage, and i'm going to add abled-body working adults that are in the workforce, about 62%. this is still abnormally low, don't you have any concern about that number and -- well, why don't i add this? you talk about retirements being one of this, baby boomers leaving the marketplace, the labor force, but doesn't this also have something to do with the disincentives created by welfare system in terms of giving people an opportunity to get back into the job market? >> time of the gentleman has expired, a very brief answer from the witness, please. >> we focus on labor force participation all of the time. it's a really important thing and certainly worthy of a longer discussion which i would be delighted to have that. >> time of the gentleman has expired. the chair recognizes the
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chairman of massachusetts. >> thank you, mr. chairman, thank you mr. powell for being here. welcome. some of my colleagues have talked about where we are and the economy seems to be getting better, we all agree with that, we would disagree on why and how, i personally think that goods is as a result of action that is we took several years ago to stabilize, secure and improve the economy and it's now working its way through the system, but i will leave that debate another day. i want to associate myself with the comments made by mr. meeks, i would encourage you as well to keep a close eye on the cra. i also want to take that and expand it a little bit more, i presume that the fed would not be interested in an economy that worked for wall street and did not work for main street. i assume that the fed would not be interested in economy that just worked for texas and didn't work for new york therefore i presume the fed has some degree of interest in not perfect equity but only some equitable
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distribution of the benefits of a good economy, is that a fair assumption or am i completely off? >> well, i would say i think we want prosperity to be high and broadly spread, we don't actually have a lot of tools for distributional tools, much more things -- >> i respect that, i understand that you have limited tools for lots of things, i agree, that is obviously one of the things, good economy for three people doesn't help for the 30000 and some odd million that live there. thank you for that. are you familiar with relatively new british law that had been enacted and being imposed that requires companies of over 250 employees to report income in wages and the basis of gender, are you familiar with that at all? >> no, sir, i'm not. that just came out. and the first company to do that report was barkley's, one of the largest banks in the world. that report pursuant to british
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law show that women at barkley's make 36% and bonuses 60% than men. some of those have reasons who and what positions, but certainly goes to the idea of equitable distribution of the benefits to have economy and are you familiar with a rule that was proposed by the equal opportunity commission in 2016 that was supposed to go into effect in march that would have required similar reporting by american companies over 100 employees, not just on the basis of gender but also on the basis of race and ethnicity? >> no, sir. >> okay, fair enough. well, the reason you're not familiar with it is because the trump administration stopped it. it was proposed in 2016, companies were given two years to work their way in but as of last august, the trump administration said, no, we don't want to know how you pay women, how you pay people of racial groups or ethnicity groups, we don't care about
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that. now, i personally think that's horrendous and i would actually say that, again, if you're interested in an economy that has some degree of equitibility, you need answers but they don't help us address the problems and i would ask for something like that that is new to bruttian, doesn't seem to have impacted barkley's in any particularly bad way but provides us the information we have to go forward to argue for pay equity across the board, now, i'm a white male but i'm not interested in my success being at the expense of people who are not white men. i would ask, is the fed interested at all, would you be interested in pursuing something -- you oversee 7,000 entities. some of them large, some of them small, most of them pretty large. would you be interested in pursuing some degree of not intrusive but some degree of
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investigation as to how they pay their employees if it's equitable or not? >> i'm not familiarly with either british bill or the eoc proposed rule that was -- not familiar with either of those and these are the kind of things that congress should consider, you know, we have a job, we have a really important job to do that you've assigned us to do and for now we are going to stick to that and try to achieve -- >> i respect that. i want you to stick to that but as we talked about earlier, some degree of equitable distribution of benefits of good economy is your job, not perfect equity, not every aspect but in the one aspect you can control overseeing 7,000 financial institutions, don't you think it's a fair thing to ask how they pay their women, how they pay african americans, how they pay hispanics if it's based on some degree of discrimination? you don't think that's a fair thing for you to ask? >> i don't think it's a question for the fed, i mean, i think it's a question for other
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agencies and -- >> so you think -- boy, that's a great answer, i think we will hear more about that. >> time of the gentleman, the time has expired. >> thank you, mr. chairman, thank you chairman powell for coming before the committee, congratulations on your confirmation, we look forward to working with you. chairman powell it's my understanding that the fed has been actively involved in developing potential alternative and secure overnight funding rate, has there been a robust cause benefit analysis conducted by the fed regarding the potential economic impact to consumers and commercial borrowers relative -- >> well, i would say -- let me say that the situation with libor is such that the financial conduct authority in london said they would not compel banks to submit submissions to the libor
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panel after the end of four years and at that time the fca can no longer guaranty the continuation of libor, now if libor were to stop being published then, there are 300-plus trillion dollars worth of libor contracts in the world and that has all the potential of being significant stability problem, so solving it is a very high priority for us and financial regulators around the world. there will be costs to doing so but they would be trivial in comparison to failure to be ready for this change should it be necessary. >> what type of borrowing cost do you project for businesses as a result of the impact of this change? >> we are seeking input from businesses, they would be subject to this at the moment but honestly, though, the cost of failure to act would be
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potentially quite high. >> yes, sir. since rates go out direction to libor during market stress, do you anticipate rates to shifting -- i'm sorry, i didn't catch the last part. >> do you suspect any systematic risks in moving, in the banking sector shifting? >> yes, i do. systematic risk would be decreased by moving to sofer. i think, you know, a risk-free rate which is really use today price -- used to price derivative markets would be important to have, would be improvement from financial staict perspective to have sofer over libor. >> when sofer was selected through the pross, rates committee in 1 were rionial
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banks a par of thatrocess? it's principally affectingo s we had a lot of different groups around the table and at this point very much broadening the circle to include community banks and other parts of the financial system. >> do you anticipate any potential cost relative to the community banks in this shift? >> i don't think -- there shouldn't be meaningful costs and we sure like to know if there are. >> if banks do continue to participate in libor panel, would you encourage a multiple rate approach that was driven by market choice or banking, lending through for sofer for derivatives? >> yes, sir. we always said that if people want to keep using libor that's
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fine as long as it's published. we are not saying that's what will happen but we need to be ready in case it happens. >> yes, sir. on the other subject, what do you anticipate will be any changes you'll bring to fed relative to transparency in the fed? >> well, i think, you know, we are committed to being a transparent as we possibly can about monetary regulation and if i remember what was back then when i was secretary of the treasury, the fed didn't publish post meeting statement and you look at the massive number of things we publish, we are much more transparent. we will continue on that path. we are not done with that. in regulation, i think it's important that we be transparent, in fact, we are working across broad range of issues there including i would point out stress-testing, a package of transparency regulations and in general, i think it's appropriate for us to always be working on that and --
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>> one last quick question. i've hat 50%, fewer banks in north carolina than in 2010, do you foresee fed policies that would enhance and assist community banks in particular? >> time of the gentleman has expired. a very brief answer from the witness, please. >> it's a long-running trend and we don't like to see it and we don't want to make it any worse and i will be happy to continue this with you. >> thank you. >> the chair recognize it is gentleman from missouri, mr. clay, ranking member of our financial institution subcommittee. >> thank you, chairman for holding the meeting and thank you chairman powell for your testimony today. chairman powell, do you agree that the u.s. housing is in a recovery mode as far as transactions and housing market in general is healthy? >> yes, sir, it's been a gradual
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recovery but it's ongoing. >> well, along those lines i want to pick up where mr. meeks questioned you. i shared with your staff a recent article from my hometown newspaper about black home buyers continuing to be denied conventional mortgage loans at much higher rate than whites, even when controlling for income, loan amount and neighborhood and as you -- in the st. louis metropolitan area, african americans who apply for conventional mortgages are two and a half times more likely to be denied than nonhispanic whites and that's according to two years of recent data and as you know, where there's loan activity, houses have a chance
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to sale, where house sell, people move in, where people move in, restaurants, community centers, and grocery stores are built and none or very little is happening in low to modern income neighborhoods in st. louis or elsewhere in this country, so my question is, what can the federal reserve do to ensure that africans for home mortgages are treated equally and the bad actors who steer and red-line communities of color are eliminated from this process or change their policies. if -- can you give me any direction in that area? >> i would be glad, sir, first of all, racial discrimination in mortgage lending and any kind of lending is completely unacceptable and wherever we have authority we will use it to stop that from happening and
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punish it when it does happen. we have some authority here, the cfpb has quite authority in this area as well but where we have for the banks that we supervise carefully and try to address them. >> the fair housing from 1968, the law has been on the book for 50 years prohibited those practices of steering and red-lining, now, i share with you this article because i want you a more extense i have response on what action we can take against bad actors like u.s. bank who has cited cited ie article. the fifth largest financial institution in this country who have denied mortgages across the
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communities that i represent, it doesn't help it. so i would like to collaborate with your office on how we stop these policies and practices that are discriminatory. let me ask, and hopefully you will be willing to work with me on that. >> yes, sir. >> while president trump recently tried to take credit for december unemployment numbers showing african american unemployment at its lowest recorded level, this too is part of a long-term trend that started under the obama administration which african american unemployment has steadily declined for the past seven years. in addition, racial disparities continue to persist with the unemployment for whites 3.5%, unemployment for african
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americans stand at 7.7%. with african american unemployment more than twice as high as white unemployment, clearly more progress is needed. share with us your vision for the fed attacking persistent unemployment among african americans? >> what we can do on that front, sir, is we can take seriously our obligation to pursue maximum employment and we understand fully that while the national unemployment rate is low and while in many regions the unemployment is actually even lower than 4.1% you meet congressmen and senators that come from places where unemployment is in the 2's. >> i would like to explore that with you. >> the time of the gentleman has expired. gentleman from oklahoma, mr. lucas. >> thank you, mr. chairman and
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chairman powell thank you for being here. before i ask a general question and a broader question, i do note that i think you're my fourth chairman to be able to visit with in this environment since i've been a member of this committee. and i'd like to discuss an issue with you today that you and i are discussed and my good colleague, subcommittee chairman has a bill regarding and that's the supplemental leverage ratio clearing margin and i know that bill has bipartisan support in ag committee and would offset margin amounts for supers of slr because margin is inherently a risk management tool and must be from bank's unfunds and the fed can affect the legislation, however, and predecessor showed willingness to look at the issue and i was hoping that you might be willing to consider that situation, that sort of fix yourself. >> thank you, mr. lucas. so what we are doing right now is
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taking a careful look at enhanced supplemental ratio and i think our view is that the leverage ratio is very important requirement for banks but it should be a backstop, high-end backstop to risk-base capital and enhancement to supplemental ratio that we put into place in i guess 2013, in that range, went a little too far and it unfortunately seems to be deterring some low-risk wholesale type activities that we really want financial institutions to engage in and one of those is client clearing and particularly not counting margin, but i think our way of addressing that is going to be to -- to lower the calibration of the enhancement to the supplemental leverage ratio and that does seem to get done what needs to be done there. >> clearly, something needs to be addressed. i represent the great state of
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oklahoma, ag, energy, main street business, we are a commodity-driven economy and the price of commodities, of course, reflection of supply and demand and while supply is not an issue for the fed to be concerned about, i represent industries where technology advancement has been used amazingly, very successfully, whether it's per cigs agriculture and increasing the output of farms and ranches or on the energy side of the equation, horizontal drilling, the most amazing technological advances over the last ten years and that's increased supply. but my producers see since 2015, oil and gas or oil and cattle, literally prices were half what they were in 2014. let's discuss for a moment expand on comments earlier on where you think the fed
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projections will have economic growth and demand in the year, two or three down the road in the united states. we have a supply equation, that's our challenge, but if demand picks up, life gets better economically at home. >> that's typically the case as you know. i haven't -- i haven't updated my own projections but i will just say generally that it does feel to me that the next couple of years will look quite strong and you should see strong demand from consumers and businesses investment and next two years on current path to be good years for the economy and labor markets continuing to improve, inflation moving up to 2% and i would think that that should create a good environment for people in your district who were in the commodities business as well. >> the rising tide raises all ships, thank you, mr. chairman. >> would the gentleman yield to
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the chairman? >> of course, mr. chairman. >> in the minute and a half that he had remaining, i had a question, chairman powell, dealing back on the interest on excess reserves. i'd ask your predecessor this question and the answer was not clear to me. i think as you know know under statute that the rate must be and i'm trying to find the exact language above -- cannot be above the usual level of short-term market interest rates and yet we know that that the fed has been paying a price over the fed fund rate, paying over libor and certainly, currently
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paying 150 basis points yet our constituents typically receive about 10 basis points on their savings account. and so i'm just curious on what does the phrase above the usual level of short-term market interest rates mean. in your 2012 rule-making that implemented ioer it allowed you, it athrowed rate to get back to primary rate but you canet it where you want to set it. legally you can pay in ir, can you pay 300 basis points, 500as? >> i think as you sgested, we are not permitted general sht-term ierntt rates, somethg like that. i wouldook at tt and i whosale
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deposits, srt-term interest rates, mey mart funds, things le that, where ioer is set,he whole idea is t use as tool toove those kinds of interestat aesround and they -- >> pay points, our constueitnts are tting 10asis points. are sticky on the way up and they generally come up with a lag. >> time ofhe gentleman has expired. chair nowachu mr. lyn. >> thank you, mr. cirman. thank you mr. chairman, thank you f your aendance, appreciate that. there was a story around etf's and i wanted to get your thoughts on this, the particular story noted that shares of everything from manufacturers to banks to oil production companies are all rebounding together after tumbling in unison earlier in the month. the article noted that one
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factor contributing to the close correlation monk s&p's various sectors was driven by exchange traded funds. i know that etf's invest in wide swaths of the market and when that's all correlated it can sometimes increase the volatility, at least that's what the data would suggest and i'm just wondering, does the fed think that there's risks to the broader financial system associated with complex etf's and as -- is the fed concerned about that, any ideas? >> it's the interesting question, i saw the article. we looked after the volatility came and subsided, we looked carefully to try to understand really what did happen and it seems that the markets were generally order early through almost all of that time and etf's are a particular form of
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fund and i don't think they were particularly at the heart of what went on on those days. but it's something we are talking to fellow agencies, particularly fec would be in best position to look at this. it's a question that we are looking into it. >> okay, thank you. on a completely different topic, in your remarks you talked about historically low unemployment rate among people of color, but again, you acknowledge that the rate of unemployment for people of color is much higher than for white workers and given the fact that the participation rate according to your own testimony has been fairly constant, does the fed have any suggestions to the trump administration about, if the wind is at our backs, more people to work, how do we close that gap, how do we get more people of color into the
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workforce so that, again, we close that gap? >> as i mentioned, mr. lynch, our part of it is to take seriously our obligation to achieve maximum employment and i think we are doing that. we don't have tools that are good at addressing these kind of disparities. >> i'm not asking you to do it, i'm asking recommendations to the white house, they have the power to do it, they have the tools to do it. >> right, i wouldn't want to, you know, presume to recommend policies that are away from our general mandate but i will just say generally -- >> let's just say we are trying to reduce unemployment, that's certainly part of your -- >> i think the constructive thing for -- in this area is really to focus on and it's a long-run problem but to focus on education and training. we want everyone to have opportunity. we want this to be a society where everyone has opportunities to succeed and part of that is reaching people through the educational system and i would
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point you in that direction. >> very good. thank you, mr. chairman, i yield back. >> gentleman yields back, chairman recognizes gentleman from illinois. >> chairman powell, good to see you, thank you for your work and thank you for being here with us today. on june 22nd, 2017 you testified before the senate banking committee and you said, and i quote, we believe that the leverage ratio is and important backstop to the risk-base capital framework but that it is important to get the relative calibrations of the ratio and risk-based right and critical to mitigating incentives, changes along the lines also could address concerns of custody banks that their business model is disproportionately affect bid the leverage ratio, end quote. i worked with my colleagues on this committee especially keith and bill foster on legislation that was passed out of the committee 60 to 0 that would provide relief from the
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supplementary leverage ratio for institutions that are predominantly in the business of providing custody services. the treasury department's june 2017 report recommended changes to leverage ratio to cash on deposit with central banks which is in line with legislation reported by the committee. i wonder, do you support the treasure department's recommendation and how would you work with fec to make recommendations? >> i agree with you, sir, that leverage ratio can deter banks from engaging in low-risk wholesale activities particularly the custody banks and so we've looked carefully for some time now at how to provide relief and our preference for the way to do that is to just recalibrate the enhanced supplemental ratio and the custody banks would feel significant relief because they have the smallest surcharges,
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that's our preferred way to do that. >> following up on that, as you know with these considered changes to the enhanced supplementary ledge ratio, they only cover the gsib, do you believe that bossel are only necessary but also support changes to the larger supplementary leverage ratio? >> the regular supplemental leveraged ratio based on my conversations with financial institutions including the custody banks is not particularly binding for them as certainly as it relates to custody banks so it's really -- we chose to make this enhancement and i think we got the calibration a little bit wrong and so our plan is to roll that back. >> okay. one last thing on this and i will move on cbo provided cost estimate for implementation hr2121, cbo relies upon input from executive branch for such estimates, i wonder if you can commit to sharing correspondence between fed and cbo with my
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staff and the committee of determination of the cost for implementation of 2121? would you be willing to work with you on that? >> i would be willing to work with you, i would have to look into how we do that. >> my concern for this is that the bank and regulators are only looking for providing relief to gsibs, subject to enhanced slr's while the large banks to slr, northern trust is important in chicago, amazing institution, 120 some years, more than that they've been around but they're not a gsib and thus not subject to the eslr's, they are still subject to binding capital coin straints so it's a concern of mine. moving on, similar to my question regarding adjustment to bosell leverage ratios, i want to ask you about treatment of industrially cleared options, october 2017 report on capital markets note and i quote, the
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current exposure method, model, for example, requires options, contracts to be sized in their face value rather than allowing for risk adjustment to reflect the actual exposure associated with derivatives, specially cme does not provide delta adjustment for options, end quote, it also note, i quote, cme may be responsible for correspondence for market makers clients that are liquidity providers in markets, end quote. i understand this concern was realized by some market makers during some of the volatility incurred by markets in recent months, i wonder whether you agree with treasury report recommendation to believe that there's should be risk approach for valuing options for purpose of the capital rules to better reflect exposure such as waiting options by their delta? >> i actually believe there's
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alternative more risk sensitive approach that we are moving to in that area but i want to check back with experts and i will follow up with you. >> that would be great, if you can let us know that, my time is up, thank you again, i appreciate the willingness to work with us. >> the time of the gentleman has expired. the chairman recognizes mr. scott. >> thank you very much, mr. chairman. welcome chairman powell. you know, what's disturbing me and what's remarkable and i think down right disturb to go -- disturbing coming out of this trump administration in three specific areas that you as the chairman of the fed our chief economic balancers, shall we say, direct input on and did you know, for example, there's three areas particularly, first tax cuts of the president, are you
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aware that 83% of the president's tax cuts go to benefit just 1% of the american families? that's not fair at all. if they go to his budget cut, you know, who is impacted the most because of his budget cuts? it's the african american community. let me go to his dry -- terrible proposals to cut $17.2 billion away from food stamp recipients and then if that's not mean and ugly enough, they want to turn out and now stop food stamp recipients from even being able to go into the grocery stores
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and buy groceries, just like you and i. this is mean, man. and i -- i want you, you seem like a very reasonable person, tax cuts going to 1%, the wealthiest people and then on the same tone -- token, we can do a lot of people but want to send food in boxes, canned food, dry milk, milk to poor people in this country. now, mr. chairman, you've got to do omission of inflation, unemployment on top of that, they are crushing the most primary group that's being crush ed are african americans
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and people of color and i'm here to tell you we are going to stand up and fight this administration and i want to ask you to get onur side, the side the amecaneople becau it is car to me that this president trump is not on the side of the amecan people. givie benefitsf the tax cutso the 1%f the weahit and tn turn around cutngti $17.2 biion out of the thing we ndo most fd for the poorest people and then on top of that, shipping their food. [laughter] >> in boxes to sit on their porch, dried milk for their babies. you tell me, mr. chairman, is
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this the way you think about america? >> thank you, sir. i can only say these are very important issues and i take it to heart but these are not issues that we have authority over. >> now, i was waiting on you to say that, mr. chairman. [laughter] >> there's nobody better suited, you are the chairman of the federal reserve. do you know when you sneeze wall street crumbles? that's why i'm pointing to you, mr. powell. i have looked at your background. you are well prepared for this, you are experienced as i have read it, show that is you have a deep compassion for people, all
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i'm asking you to do is to every once in a while, if you could say, hold on, mr. president, this -- this isn't right to be shipping the food to the poorest people in this country and denying them a right to go in the grocery store just like me and you buy food, it's not. >> time of the gentleman has expired, the chair recognize it is gentleman of pennsylvania. >> thank you, mr. chairman. and welcome, chairman, good to have you here. the fed supervises several insurance companies that authorize thrifts and designated as nonbank siffy, reflect business of insurance and the privacy of state regulation of insurance, most notably congress passed legislation in 2014 to ensure that capital rules for insurance companies are tailored to the business of insurance. we appreciate all your work on
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this rule, separate from the pending capital rule, i believe there -- that more could be done to ensure that on the ground supervision of insurance companies is proportional to the risks the companies pose in terms of safety and soundness and reflect supervision. what are you doing to ensure this and what more could the federal reserve do here? >> thank you, sir, thanks for your comments. so we do -- i think from the beginning, i think you see we have tried hard to look at insurance as new area for us where we need to develop expertise and different from banking and needs to reflect the risks of the insurance business and so we really invest in that and try to be open, we continue to do that in developing capital requirement, we tried to reflect that and i think we are very hope to the views of experienced insurance regulators, some of whom we hired and also people from the industry. >> by my count, there are four
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vacancies on the board of governors, how does the vacancy impact the fed to fulfill its mission? >> i'm glad you mentioned that, we could really use some more faces on the hall, i don't think we've been down to three governors, certainly not for extended period before so i'm eager to have more colleagues. as you may know i wear an awful lot of hats before i took over my current role and so i've handed those hats out to two colleagues and so we are all three quite eager to have more people on board, we don't niecely need 7 immediately but we sure love to get there. >> we talked a little bit about background, i would like to talk about diversity of experience, professors charles of colombia university highlighted importance of bringing individuals with the diversity of experiences to the table when discussing monetary and regulatory policy, he describe it is culture of federal reserve system as academic dominated, while academic surely need to
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have an important voice in the highly-technical debates, i can see how a nonacademic practitioner prospective can be helpful. can diversity experiences like yours help monetary? >> i think we need great economists around the table and we lots of them and we also need people from other backgrounds, people experience in business, you know, from managing profit and nonprofit institutions and from, you know, the financial markets and i think -- and from the law. those people bring diverse perspectives and make decisions better and our discussions, you know, better. >> as you may know our national debt exceeds $20 trillion and continues to grow rapidly, at the same time the fed has been engaged in unprecedented monetary policy experiment, some in carrying excerpt, the fed has stepped conduct of monetary and venture today credit policy, do you worry that unsustainable
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policy debt may increase political pressures on the fed? >> well, it's a risk, it's not a near-term risk i would say and i just would mention, of course, that we are now in the process of normalizing our balance sheet and shrinking it and so we are moving back to a more normal level balance sheet and i think we will be there in three, four, five years. >> one thing that's always kind of puzzled me the target 2% inflation rate, you know, as layman and looking at this, the suggestion seems that's benign, but, you know, over 20 years, you mentioned about 20 years, 100 bucks 20 years ago and you had 2% every year, the purchasing power for that 100 bucks went down k. you kind of educate us a little bit from your perspective about this 2% target. >> sure. >> my count $100 at 2% might
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cost 50 bucks today. >> so this was a big debate which was settled around 2% as opposed to zero for central banks to aim at. it's now become a global standard all around the world, central banks are aiming at 2%. the reason that was picked over 2 in essence is because it gives us a little more room to cut real interest rates. if the interest rate, if inflation is zero, then interest rates would be, you know, in the sort 1, 2, 3 range and when a recession comes, we would have very little to cut. having 2% inflation kind of we think oils the wheels of the economy and gives central banks a little more ammunition and it is now become the global standard so it would be hard for any bank to diverge from it. >> yield back. >> the gentleman yields back, the chair recognizes gentleman from texas, mr. green, ranking member of oversight investigation subcommittee. >> thank you, mr. chairman. thank the ranking member, also i
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would like to thank the persons that are here who called themselves full employment defenders, welcome. mr. chairman, what do you consider full employment? i have the number 5.5% but if you differ, i'd like to hear your number, please. >> i would -- if i had to make estimate, i would say it's somewhere in low 4's, what that could be 5 or 3 and a half. >> let's take the low 4's or 3 and a half. when is the last time that african american unemployment was in the low 4's or 3 and a half? >> i don't think it ever has been in the years we have been measuring it. >> quite frankly speaking it hasn't been since slavery, that was the last time there was full employment for black people. mr. chairman, 6.8% seems to be the lowest number that i can find since we have been keeping
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numbers. and for the last 47 of the last 54 years, it's always been twice that of white unemployment, twice, do you agree? black unemployment is generally twice as white unemployment? >> that's what the numbers support. >> do you agree? >> i agree. >> it's a true statement. mr. chairman, do you also agree that discrimination exists in the united states of america? >> i would. >> do you agree that when we've had an opportunity to test banks we have found that discrimination exists in lending? >> yes. >> do you agree that testing is effective means by which we can acquire evidence necessary to show that discrimination exists? >> i do believe it is used in
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that way, yes. >> then, mr. chairman, would you support legislation to help us acquire the evidence to show that this exists so we can do something about it? i take that to mean full employment not just for white people, i take that to mean for everyone and at some point black unemployment has to be addressed because it it is chronically tw. and we also have to ask that our friends on the other side join black people in doing something about this. mr. chairman, that which we will tolerate we will not change. we have learned to tolerate
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african-american unemployment being twice of white unemployment. i refuse tolerate. that's why i used language that is clear and concise, there is no question about what i say, the question is, what are we going to do about it. we know that discrimination exists in banking in terms of lending, we know that it exists at other areas in the economy as it relates to african americans, the question is what would we do about it, by the way, i'm not assigning all of the responsibility to you, that's why i mentioned my friends on the other side and my friends on this side, i'm a liberated democrat. democrats and republicans have to do more about black unemployment and unfortunately when a black person challenges the system such as i do, it becomes playing the race card. so let me say today that i'm
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playing the race card because we have for too long allowed this condition to exist. so mr. chairman, i'm going to send you a letter and in the letter i will request that you explain the role that covert and overt unemployment plays in this issue of black unemployment being twice that of whites. i will ask you to identify the primary factors that limit african americans' access to employment opportunities in sectors that are protected from downturns in the economy and i'm going to ask you if allowed would testing provide data, you've said that you think it would. i will ask i will ask you to put that in writing, mr. chairman. i respect you and i ask that you be of service to all americans, not just white americans.
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i yield back. >> time of the gentleman has expired. chair recognizes the gentleman from colorado, mr. tipton. >> thank you, mr. chairman. chairman powell, appreciate you taking the time to be able to be here. one of the big challenges we faced in this country, the policies of the previous administration have yield aded a lethargic growth. it impacted communities across the country. we're seeing policies come into place, creating job opportunities, putting resources back into the pockets of individuals who actually earn it and creating that opportunity for people to increase their prospects for their family, communities as well. which i applaud i want to make sure they are applied across the board in the country as well to each community and i would like to be able to highlight one of the benefits i've seen iny


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