Along with several other members of our committee come of hr 2650, the payment choice act of 2019, a bipartisansupported bill, which would require merchants to accept cash. This legislation, i believe this article, because parts of the country and both leroux and orbit areas are more dependent on the both rural and urban areas are more dependent on the cash economy could i have run out of time did i encourage you to support this bill could thank you, chairman powell. Thank you, chairwoman waters, i yield back. Rep. Waters mr. Hines, you are recognized for five minutes. Thank you. That i would like to explore with you, and the first, who is the beneficiary of the billions of dollars that have been localized in the rescue . Chairman come as you know, people can do three things with money, buy stuff, rent, insurance, raw materials, keep people employed, pay wages, and third, it can serve as a capital structure. It can issue dividends. Chairman powell, as you know, in the Paycheck Protection Program, we set up an explicit internet that that money be used for wages. My first question, chairman powell, it is lets start with you are actually lending directly through the insurance of securities to corporations. Is there any incident or requirement that recipients of the payment ofs wages over the service of payment of interest, or the purchase of stuff . Chair powell i will put it this way, there is nothing in the c. A. R. E. S. Act the c. A. R. E. S. Thespecifically exempts transactions that take place in the primary market, Corporate Credit facilities from those requirements. They do direct loans for actually, no, different requirements employ direct loans for you are really talking about the requirements of the Paycheck Protection Program. Rep. Himes i mentioned the Paycheck Protection Program explicitly created an incentive to keep up employment. It does not sound like the fed lending, the primary Corporate Credit facility, has those protections. Let me ask you to reflect, and i cannot run through every 11 moneyms, but there are market mutual funds facilities, all of these credit facilities, are there any terms in the availability that preferences the payment of wages over the servicing of debt by corporations . Chair powell no. We are and lamenting the law that you pass peer the c. A. R. E. S. Act specifically does not apply those things, and we did not think it is up to to kind of rewrite the law to achieve goals we might have. Discussions] rep. Himes i mean, having lived through the political fallout of america program, where saw the banks and the Auto Companies bailed out and the preservation of a lot of the bondholders associated, i am various sensitive i am very sensitive to allowing corporate money to avoid bankruptcy and service their debt, and ultimately pay dividends. Just command that to my colleagues, as something of real concern, because when the story is told here, i think a lot of private and i am not talking necessarily corporations, i am talking about the car wash down the street who qualify for a loan, a lot of that money will have been used to keep banks to serve as bonds. Chair powell, i want to explore another deep concern i have. Appreciate your efforts, in my decade, plus or minus, doing this, this is now the second time in which it has been necessary for the government, Federal Reserve, and fiscal policy to step in in a truly massive way to bailout the academy the economy. 10 years ago, it was the banks, the Auto Industry coming out as the airlines, the list goes on and on. And the worry i have, which relates to my first worry, is that actors in the private market and i was one, in the private sector are going to decide that they can take on a lot more risk, repurchase shares, dividend capital, because when the going gets and catastrophe hits, we will be there to bail them out, so i want to spend my last 40 seconds or so to ask you whether you think that the activities of the last six month and the last 10 years have created significant moral hazard in our market system. Chair powell let me first say that of course the intended beneficiaries of all of our programs are workers and are able to keep their jobs because companies can finance themselves, so that is really the point of it. You raise a really good question. Certainly it is a concern, and that his wife, you know, generally that is why, you know, generally we do not look to insert ourselves into markets when they are functioning. This is a world historical event unlike any other. The situation that happened is one where we really felt like we had to come in with all of our tools as as aggressively as possible. I do not regret those decisions. That is why i always say that we will put the tools away. I take it very seriously. You know, ultimately, in a free market, in an economy like ours, you should get the benefit of your success and the cost of your failures, too. That is the way it should work. Mr. Steil, you are recognized for five minutes. Mr. Steil . Not, mr. Taylor, you are recognized for five minutes. I had to put my cursor to the right spot of the screen, madame chairman, thank you. [laughter] rep. Waters thank you get chairman powell, for five years, i worked very diligently in an effort to unlock at least 45 billion in capital to be available to the economy, and without me saying anymore, you understand where i am headed, the interaffiliate margin rules i hear rumors we may be getting closer to such a rule being announced any insight you could provide on that . Chair powell i am happy to be able to confirm those rumors. We are indeed getting close. I can give you i have been under strict orders not to give you which i will obey not to give you an actual date. Nonetheless, it is very clear that we are today has been a long road, i will agree with you, but we will get there very soon, i am told. I have spent enough time on farm bills. I have enough patients to die will wait you out. Makingience progress is important. A lot has been said about the way the fed has addressed this unprecedented set of challenges that we have had in the first part of this year. In your experience as the fed chairman, in your academic training, could you ever have imagined a pandemic of this magnitude come up with this kind of economic impact, not just on the United States but around the world . Chair powell i no, i certainly didnt. Like everybody else, i was aware that there were things called pandemics, and that they had consequences, but you essentially had all over the World Governments and people who were deliberately stopping a lot of Economic Activity, and we will see declines in Economic Activity that are just beyond any in living memory because of the disease. It is akin to a natural disaster, you know, so i really do think this is a onceinalifetime i certainly hope it is a onceinalifetime event. And i hope Market Participants do not grow to think of it as something where we will react to any old thing. Rep. Lucas absolutely, and you and i have discussed many times the four, coming from my part of oklahoma, the depression of the 1930s, the death toll, the dramatic effect of that policy in 1929 and 1930, the congress policy, the administration at that times policies, that made things so dramatically worse. Reporters in my population in my hometown came away and never came back. It is fair to say that doing what we have done in congress, what the fed has done, what the treasury has done, unprecedented as it may be still is dramatically cheaper than a lack of action. Fair assessment, mr. Chairman . Putting the economic trade on the tracks costs a lot more than keeping it on the tracks. Chair powell i feel very strongly that way, i really do. We are going to come out of this. The more we do now, the stronger our economy will be. Keepetter we can get people working, get tax revenue backup, and have a Strong Economy to pull us forward and service the debt. We will come out of this with more debt. Thanks will up taken losses. Houses will have run down their capital everybody will get nonetheless, the economy will be stronger, and that helps everyone. Rep. Lucas and ultimately, fed policy will reflect that new reality, as will fiscal policy in United States congress has to reflect that new reality. The piper will have to be paid, ultimately. That bill to pay is how we get to the point of being able to pay. That is right, and that is why this is not a time to worry too much about, you know, the longer run fiscal situation. We will have to return to that, but i would say this is not the time to prioritize that. Rep. Lucas one last thought representing the substantial rural part of oklahoma, making sure fed programs work as well in the countryside as they do in the Money Centers and the big urban areas is critically important from my perspective. Making sure those facilities are available to everybody helps assure the robust recovery. We do not want to leave any particular regions or parts of society behind as we come out of this can and i believe you are working aggressively in that area. Chair powell we have tried to come and in fact, i would point to things we have done with the missable facility, where we make sure states have a more rural population, nevertheless have the benefit of that facility, and we will continue to adjust all of our facilities to try to serve that goal. Rep. Lucas with that, madam chair, i yield back the balance of my time. Rep. Waters thank you. Mr. Heck, you are recognized for five minutes. Rep. Heck thank you, madam chair, i would like to start by thanking you for setting up the call the other day with chair powell regarding commercial real estate and the future of that market and its importance. I do not have time to get into that today, i wish i did, because we still have a problem, and i am bringing the alarm bell again. You know, since i was privileged to join this committee nearly eight years ago, i have asked nearly every hearing when does america get a raise . The truth of the matter is that for far too long, indeed i would suggest 40 years, we have been content, and some people have supported, frankly, running the economy short of its potential. I remember, when i got here, that there were people both on and off the fomc who thought if we ever dipped below 6 unemployment, it would trigger inflation. And that it was not 6 come about 5. 5 , 4. 5 , 4 , and then what we know, we are in this economy between 3. 5 percent, 4 unemployment for 2. 5 years, and we maintained, in fact, we were sort of the price stability target. The fact of the matter is that during your tenure, mr. Chair, and i to my had to you, sir, i sir, yout to you, have open peoples eyes to the labor, and you have done that, and we cannot thank you enough. Well done, sir. You have pointed out, rightfully, that labor markets help with wage growth, but especially with employment levels and wage growth where people at the lower end of the income spectrum, again, i want to thank you. Chair, fact remains, mr. That the mission of the fed no different today than it was over two generations when it never to operate economy labor staffs. We are going to get past this, and the sooner the better, but my question for you is, short of you having a lifetime appointment, which come of either way, i would support, sir, but short of you having that, how can we be assured that what you have so appropriately pursued will continue . And i want to preempt you a little bit, if i may come a chair, by saying every entity in the history of civilization has opened up the underlying authorization act, and the fed has been no different in my conversations with them. Its a to some degree can i get that. It is as though you are channeling will rogers who said once, people feel about congress the same way they do when baby gets a hold of the hammer. You are worried about what might happen if we opened up that act, but there is no assurance that what you have rightfully pointed out, what you have rightfully pursued, will continue to be pursued. How do we assure ourselves about what you have figured out and what you have led the fed to do will continue into the future, if we dont change the law, sir . Ir powell you, mr. that i stump chair . Chair powell i forgot to i mute myself, sorry. I actually think the law is written to accommodate what we have learned, what ive a lot of have what a lot of us learned. When we were growing up, inflation was really a problem. People were not imagining it. They would have to watch carefully, or inflation would move up command it would hurt, you know, people on fixed incomes more than anybody else. And what we have learned is that, you know, these disinflationary forces we have seen around the world for a quartercentury, they are here to stay for a while, and that, you know, we live in an era of continued downward pressure on inflation. That gives us the ability to have very low levels of employment. I do not think it is going to be, you know, if you change the law to, you know, the situation will change. The economy is ever evolving. So i think i do not know that changing the law is what we need to do. I do think we get that, and i think economists broadly do get that now, and that is why we are so eager to get back to where we were and below, you know, we were not see any pressures at 3. 5 . What we saw where the gains in wages going to people at the lower end of the wage spectrum for the first time in a very long time. I cannot tell you how much we want to get back there and how fast we want to get there, so we will be using our tools that way , and that is really how i look at it. Rep. Heck thank you again, sir, for your leadership. Chair powell thank you. Rep. Waters thank you very much. Mr. Steil, you are recognized for five minutes. Mr. Steil, available . Mr. Steil . You are recognized for five minutes. Chair powell he is talking, but we are not hearing. Can staff look into whatever technical difficulty there is . Because he is unmuted. Rep. Waters ok, so, we are having a little technical difficulty here. We are checking with our staff. Mr. Steil, we cannot hear you. We are going to move on, while they are trying to correct that, to mr. Taylor. Is mr. Taylor ready . You have five minutes. If not, we will move on to mr. Luetkemeyer. And we will get back to you, both mr. Steil and mr. Taylor. Thank you. Etkemeyer thank you, madam chair. Thank you, chair powell, for being here today. Thank you for your quick actions to set up these different facilities to be able to underpin our markets and to minimize the damage to our economy. It is amazing to see what you have done, the impact it has had, and we certainly appreciate all of your efforts. Thank you very much. With regards to my questions, and your most recent Monetary Policy report, you stated how lending standards for both households and businesses have become less accommodative in borrowing conditions are tight for low rated households and businesses. I think what you are seeing is as Financial Institutions are looking down three or four months on the road and prepare for regulators and their exams to come into this institution after this of forbearance and loans and forced assets could i can tell you by talking to bankers from across the country that if the regulators do not give forbearance to these Financial Institutions, and they start forcing institutions to classify whole lines of business, theres going to be a real problem, with a credit shortage in rural areas and low m. I. Communities. Do you believe the regulators should be providing this forbearance, and what do you think it should look like . Chair powell um, so, we are encouraging our supervisors to encourage banks to work with their borrowers and not to jump to criticize loans and to take on board, you know, the situation that we are in, and we are communicate with them, you know, a lot in that respect, and i hope that is getting through to the banks, that it is in fact getting through to their borrowers. We do not want to force anything to automatically happen. I guess it is natural that in a situation like this, where businesses are partially closed or people are not spending, you will see concerns about credit, but, you know, we are this is clearly a temporary period, and we are going to continue to urge banks to work with customers, household and business customers. Rep. Luetkemeyer i appreciate the comment, sir, but in your earlier comments, you talked about some businesses struggling and the need for forbearance, and i appreciate that, but i can tell you, having gone through this ppp program, that the banks , with their accountants and attorneys close at hand, are very reluctant to do anything, unless there is some physical guidance, some words on paper that they can point to, and so i have got a bill to try and put something in place, to taken point to coming to given the kind of forbearance and protection they need to then give forbearance to the customers. My greatest fear is to wind up with a situation like 2008, 2009, where regulators go in, close down entire industries, and hurt local communities and wind up losing banks in the process. We cannot do this in this situation. It is too broadbased. If we do this, we will never get out of this economic downturn. I am hopeful you will try to work with us to try to come up with a solution to make sure there is something that the banks can point to to provide the kind of forbearance they need, the certainty may need, to manage their customer base. Chair powell we are trying to give them that, and we are also doing additional training of supervisors, and i would just point out, too, that banks came into this quite wellcapitalized, so that helps as well. Theres going to be some more guidance, interagency guidance, on d to make exams and how we conduct those, so we are working away at it, and, you know, we really want to hear from banks and from supervisors and anybody who to the extent it looks like this is not getting through, because we really dont this is effectively a natural disaster, and we want to treat it like that. Rep. Luetkemeyer just a quick comment, i heard a secretary mnuchin make a comment that he is seeing an increase in deposits. I know and i know and it totally here,y here, local banks 10 , 20 in deposits, savings have increased. Have you seen that same thing happening . What have you ascertain from that as to why, and what kind of effect down the road it will have . Because the citizens on our country having that sort of money on hand ready to be spent. Chair powell well, the answer is yes, we are seeing a lot of that. You saw it in the income data, where people are holding at just very, very high levels of savings right now, and part of that is that they are getting, you know, the ppp loans, some of those personal bank accounts. It is also the enhanced Unemployment Insurance and the checks they have been holding back, but i think, getting to your point, what it is is andenced of spending power, we are seeing that in the spending data. I think it bodes well for the next few months. Rep. Luetkemeyer thank you. I yield back, madam chair. Rep. Waters thank you. Mattemr. Vargas, you are recognd for five minutes. I am going to go back to mr. Steil. Has the problem been corrected with mr. Steil . Rep. Steil i hope so, chairwoman waters. Thank you very much, chairwoman waters. Thank you so much for being with us today, chairman powell. I look forward to being able to do these in person, as we work through some of the technical glitches here. During and immediately following the financial crisis of 2009, the Federal Reserves balance two grew by roughly 2 trillion, and in your comments following up to congresswoman and wagoners gnerson ann wa question, have you noticed the Federal Reserve has been holding too much already . I wonder if you could comment on what are the Economic Indicators you are looking at at the outer or reserve between 2000 nine and 2019, the Federal Reserve dropped the Balance Sheet by roughly half of 1 trillion, and whether or not those same Economic Indicators will be guiding you if you make determinations in the fed as to whether or not you will be needing to hold those reserves all the way through their maturity, or if there will be opportunities to reduce the feds Balance Sheet in advance of that maturing . Um, we waitedso, until the economy was well down the path of recovery before we starting to of shrink the size of the Balance Sheet. And the other thing we did was we froze the Balance Sheet, at the end of 2014, we froze the Balance Sheet. Pardon me. For a period of three years, so that the economy was growing, and therefore the ratio, the size of the Balance Sheet in the economy was declining. I think we declined from 45 of gdp to maybe 17 , 18 . That is a passive way to allow the bank Balance Sheet to shrink relative to the economy. I shrink relative to the economy. I think in this situation we are thinking we may do Something Like that, but it is so far down road. Are we are at the beginning of this process, we are at the beginning the economy recovering. So it will be a wild before we while thinking about a before we start thinking about how to shrink the Balance Sheet. At current levels, i think we know now the Balance Sheet does not present issues in terms of inflation or financial stability, those were big concerns as we grew the Balance Sheet during the last crisis. Obviously, we do not have the inflationary pressures today. I do hold concern we will see inflationary pressures in the future. The Balance Sheet has increased beyond 7 trillion. And obviously you and your colleagues will continue to watch that. We have seen articles recently related to loan obligations, risks it may pose in the banking sector. What is important to know is Banking Institutions came into the crisis with a healthier Balance Sheet dan they did in 2009. In terms of identifying risks, indicating that banks have broader systemic risks. Leo, if you hold that view, if you think that banks came in with a strong Balance Sheet and more wellcapitalized . Chairman powell it is quite different from that crisis. We have a lot of transparency in the clos, we regularly include them in our stress tests. We stress of them hard to see what kind of loss they produce. And they are also not, they are not that large, you know. Than 1. 5 . Is less so if they contain leveraged loans, we have been all over that for several years and have been looking at it carefully. So i think the comparison to the Global Financial crisis is not the right one, nonetheless it is an issue we will continue to monitor. I appreciate you monitoring that, as well as the fed Balance Sheet and of the risks it may pose to inflation down the road. I appreciate you being here. I yield back. Boggess,n waters mr. You are recognized for five minutes. If he is not present we will move on to miss acne. Unmute yourself. Good day. Hello, chairman powell. Thank you for all the good work that you do. We are very appreciative. We know that these are difficult times we are in. For the second time in a dozen years we are in a severe recession. I believe in may we saw 20 million less americans had jobs than they did three months prior, so unemployment is at its highest rate since world war ii. And the feds projections have that remaining at 10 through the end of the year. We have also discussed, to make matters worse, the situation appears worse for lower income workers than it does for others who are making more. Chairman powell, you alluded to it today, and yesterday i think you said you were concerned about the overall deficit for the long term, but the time to address that is when the economy is strong, not in an economic crisis. Is that correct . Chairman powell i am sorry, i forgot to unmute myself. Yes, i do think that. The debt cannot grow faster than the economy forever, that is the definition of an unsustainable path. We have been on that and we need to address it. Ultimately we have to address it. The time to do that is when unemployment is low into the economy is growing. Rep. Axne i could not agree more. Each recession is different, but i want to look at the last one to see what lessons we learned, to see how they can help deal with this one. Back in the 2009 stemless timeframe, we devoted 20 total aid to fiscal support for state budgets. I was working for the state of iowa and it was in charge of supervising some funding. One thing i saw is when the assistance started to end in 2010, because of the balancedbudget requirements, that we have in the state of iowa, we had to cut budgets, meaning teachers, public servants, etcetera, lost their jobs. I have seen research from the international and others showing that these cuts were a drag on the economy for several years afterwards, some estimates showing that the job loss because of the cuts actually offset the job growth in the Public Sector entirely. Does that impact seem like it will be part of the reason why the recovery from 2008 was so slow . Chairman powell that is a finding that Economic Research has come up with, i think, pretty clearly. Rep. Axne it seems that we are in agreement that supporting state budgets is a key step to the recovery process. I know that we are working on getting that piece through the house and it is something i have worked on. Do you think that is Something Congress needs to be doing more on to make sure that we recover our economy . Chairman powell as you point out, state and local governments are large employers. And they cover critical services. And there is a balancedbudget provision that effectively in every state, almost every state. So when there is budget problems, what happens is easy cutbacks, layoffs, and both of those create not only human misery, but they way on the economy. Weigh on the economy. So it is an area for congress to look at. Ne obviously, we are trying to push that through. I have a bill that i wrote to ensure that job cuts do not happen again. Doingeciate what you are to help us sure up our economy at this point, giving us guidance and oversight that we need. And i am grateful for you being back here today, and i hope we can move a state and local government bill forward. I yield back. Mr. Isaiah,aters you are recognized. Thank you, i appreciate it. I want to think of our mutual friend andy barr right now and his daughters. I know that, chairman, he would love to be here to grill you about a number of issues, as he and i had previously chaired the policy and trade subcommittee. But i need to touch base on two things, main street business that is not eligible for the protection program, and as you know a huge part of our manufacturing economy is in automobiles, especially automobile parts. And those account for about 900,000 jobs, 125,000 of those here in michigan alone. And what we are seeing and hearing from the large automobile manufacturers is their concern for their suppliers. The suppliers are telling me, which i have a tremendous number of here in the Second District of michigan, is they are having liquidity issues. Not that they do not have that they have not been previously funded, but it is about liquidity now. I joined with my colleagues last week in sk the administration to provide shortterm lending assistance to Mediumsized Companies in the Motor Vehicle parts sector, using necessary capital from the main Street Lending program. You had said, i wrote it down, i think you said that we are there and standing up the main street program. Convinced, i guess, of that. And i want to have you clarify what that means. That needs to happen now. And will you commit to working with secretary mnuchin to add a dedicated program for the automobile parts sectors, for these companies commit to keep keep thecompanies, to industry bible, because if we lose them that will be a huge hit. I wonder if you will commit to working on that. Chairman powell the facility is open now for them to register. If so they will have banks that they work with, reglet partners banksiness, and of the should be in the process of registering with the fed to become an approved lender in the main street facility. At that point, they can make main street loans right away. Surely they will be able to put 95 interest in those loans. We are there, effectively. What about a separate facility within that frame . Chairman powell we try to we do not do facilities for individual industries. We the requirements we set up should be a good fit for the companies you are talking about. 019are looking at tw2 financials, and you can borrow at a variable, four or six depending on the kind of loan that you want and the kind of company it is. But these would be these would be a good fit. We do not do facilities designed for individual industries, we do those of broad applicability. , correct . Aring no chairman powell that is right. I think that is a mistake, however, i need to move on to another unintended consequence that i believe is part of the Paycheck Protection Program, and a company that is notable to take part in that, but is waiting for the main Street Lending program. I have a company in michigan that probably many of my colleagues have had their product. It is coffee. They are a fastgrowing company that has manufacturing facilities here, a couple hundred constituents, but they are based in philadelphia. They have been focused on growth for the last six years, and they have had to borrow funds, which has led to the accumulation of debt. The rules are written currently so that they would not qualify to participate in the main Street Lending program. I believe the way that the is writtenatio Punishes Companies that that Punishes Companies lightly come. Lacombe as the rules are written, it is designed. Keep the money from going to companies that needed most. I understand you do not want to deal with Overleveraged Companies to get bailed out, but we are talking about those companies that have accumulated debt. I am working on a bipartisan that would help that. We appreciate that, if we had a it the ability to access funds. I look forward to hearing from you offline. Chairman powell for either of those companies, if we are missing something then we want to understand that. We have been willing to adapt these programs consistently, so we will look forward to talking to you about it. Wonderful. Chairwoman waters mr. Mcadams, you are recognized for five minutes. Rep. Mcadams thank you for being with us and for your during this difficult economic situation. So, since the last time you were before this committee, the occ moved ahead with its rewrite of the Community Reinvestment act, or the cra. In light of the renewed focus by congress to address racism and systemic issues throughout our nation, i think it is particularly important that we get the cra correct. Purpose, its historical purpose was to rights systemic racism, for minority individuals and communities, and to have Financial Institutions meet the credit needs of these communities, i think my colleagues and i share concerns and that we have missed the mark and the cra does more harm than good. Myjanuary, the governor of state gave a speech on how to strengthen the cra. In that speech, she said, by sharing our work publicly we hope to solicit public input on a broader set of options for reform, and find a way forward, a way toward Interagency Agreement on the best approach. Now that the occ has finalized rules, any update you can provide to the committee on how or when the fed will move forward on public input it received on its cra framework . Chairman powell first of all, cra is for us an extremely important law. And we agreed that it was a good time to update it. We want to update it in a way that has broad support across our communities, that has always been our nonnegotiable part of it. So we are still working on it. And i do think we will move forward with it. I do not have much on the timing of it, but there has been a lot of great work done. And i like where we are on it, in terms of the things that we have the ways we have been thinking about it. And we will ultimately move forward, i cannot say exactly when, but we will not let that work go to waste. Rep. Mcadams we look forward to following that. Next, my perception is is that congress and the fed have done a decent job of keeping the economy on life support, but clearly we are not doing great yet and responses have been uneven. You have doubledigit unemployment numbers and higher unplug at rates for africanamericans, for instance, some sectors hit harder than others. I think congress had the option when the pandemic broke out about acting quickly or perfectly and i think we chose to act quickly and i think that was the right call, the by my calculation the fed has allocated a little over 200 billion of the 454 billion that congress allocated to the treasury in the cares act. Some was set aside for the main street facility, and other facilities. How do you intend to use the remaining funds . I understand it takes time to set up different facilities, but i worry that if we do not move fast enough, then communities will suffer as a result. Chairman powell let me agreed that i think the actions, the fiscal actions that you took were incredibly timely and i think will be well judged over time. Nothing is perfect, it was an emergency, you do the best you can. I think that the ppp program and other programs have certainly helped the economy through something that could have been worse of a situation. In terms of the rest of the cares act money, it is there when and as we need it. We have a lot more ability to use our lending powers, should that be necessary and appropriate. And we are certainly willing to do that. I think that we have gotten to the end of the beginning here, and now we are getting into the the reopening of the economy. But that money is there if needed. The secretary of the treasury actually has the Legal Authority to deploy that money as he sees fit. It would be one of the things he can do, to put in our programs, and we stand ready to do more if more needs to be done. Rep. Mcadams do you see that as more of the same as necessary, or are you looking at other gaps . Chairman powell i think that we have covered now we have nonprofits now in main street, that will take time. We have small, medium and large companies. We have state and local governments. I think we have covered a lot of the waterfront. We are always open to other ideas. Now andit is execution continuing to improve what we have done, make it do its job better. Chairwoman waters thank you. Mr. Vargas, you are recognized for five minutes. Thank you. Can you hear me . Chairwoman waters yes. I never abandoned you, i was here the whole time. My microphone was not working. It was sad to hear the news of andys wife and family. He is a friend of ours. We love him. I know that we will keep his wife and his family, especially now, in our prayers. And again, thank you for letting us know. I do not agree with mr. Heck, mr. Powell, that i am in favor of a lifetime appointment for you, i would not shorten your life like that. You are too much of a good guide. [laughter] that would not be fair. But i have to commend you. I think that you are one of those republicans of old, stable, dignified, intelligent and charitable. I think everybody has been looking to you for guidance. And i think that you have been the right person at the right time. And i want to commend you. And i also want to commend you for highlighting the disproportionate impact that the pandemic has had on communities of color, latinos, africanamericans and especially the poor. Countyrict is a border to mexico, and part of san diego county. Over 70 of my district is latino, the Unemployment Rate is about 28 . It was 28 in april. That is the same rate we had during the great recession, 25 . The department of labor statistics as the Unemployment Rate increased of 15 in san diego county. Looking in the areas at that i represent, seen as a drug, right on the border, National City the next little city up, and chula vista, than the city of san diego. The unemployment here in april was 20 . The disproportionate impact of the pandemic on our economy is clear in my district. What policies has the fed pursued pacifically the fed pursued specifically for latinos and africanamericans during the pandemic, in what policies has the fed put in place to make sure that those minorities are not suffering from this disproportionately high Unemployment Rate, as we emerge from this recession . Chairman powell i am tempted to say the all our policies are focused on that problem. The way that this pandemic worked is it hit companies in parts of the economy that were in the Service Economy, which involved getting people together in tight quarters and either feeding them, giving them drinks, flying them around or entertaining them. Those are service jobs, which happened to be overly representative the workforce happens to be consistently in a large measure to low income communities and minorities. An extraordinarily large portion of those laid off are from those parts of the economy, and it has fallen heavily on the latin population as well as africanamericans and women. So, the tools we have are the tools we have. We are supporting the flow of credit in the economy to companies, so they do not feel financial stress. We are trying to create an environment in which people have the best chance to go back to their old job or get a new job. That is what all of our efforts are about, nothing more, nothing less. You,vargas i agree with the type of job he described also relies on tourism and restaurants, and that Service Economy. They seem to be the last ones at that will come out of the recession, people do not feel comfortable going back. Without Unemployment Insurance, how are these people going to make it . Chairman powell that is exactly, i think we will see people going back to work here in the next few months, we believe that. But the people in those parts of the service industry, tourism is a big one, they will struggle. Many of them will struggle until the pandemic is really in the history books. That will be a problem and i think that those people will need support. It may be difficult to find jobs in the industry at all. Need towe will support them and help them. As congress did during the Global Financial crisis, as the reuppede on Congress Employment insurance a number of times, just the key people in their apartments, not being evicted, not moving into a shelter or crowded place. By the way, that will be a place where disease can spread more quickly, too. So i think it is important that we provide that kind of help. I hope you use are influenced to make sure that happens. One of the things that you said was the pandemic was it is over. Thank you for being here. We have a lot of faith in you. Chairwoman waters mr. Taylor, you are recognized for five minutes. Rep. Taylor can you hear me . Chairwoman waters yes. Are alllor we concerned about the economy as it goes through a recovery, and jobs. Something that is of deep concern to me are the Properties Mortgages longterm where the lender has little flexibility and the ability to forbear. Tosaw the need for lenders forbear into the occ provided guidance, encouraging banks, which are the biggest lenders in our economy to forbear. Fannie given guidance to and freddie to forbear. We have worked on legislation and financing, trying to encourage forbearance. But there are pockets of the economy where there is not the ability to the lenders to forbear at a level that will help them get to the other side, i am specifically concerned about some subsectors in real estate, like hospitality, Student Housing, and indoor retail. Because of the pandemic, they have no cash flow or little cash flow and they cannot service mortgages, they cannot pay for utilities, insurance and they cannot pay property taxes. I ive been working with members on this committee, and in congress, republican and democrat from all over the country, who share this concern. I perceive that absent action by bys body, by congress, or the federal government, we are going to see a wave of foreclosures beginning in the fall and going through next spring. The impact on jobs will be very material, as people who are working in indoor retail, Student Housing where you have a University Town that needs to have that housing to run the university, those foreclosures will be very serious, especially when they are foreclosed and the property itself is closed and there is no capital to reopen the business. So, assuming that you were to see things the way that i see them, where there is a common cataclysm here, do you have the statutory authority, you and the treasury, to open up the main Street Lending program, or other programs committed to provide someone tohority to then in turn help these properties in trouble that cannot make it work, or make their mortgage . Chairman powell there are limits, as i think you are referring to in what we can do. Withinding powers are the law, we have to make sure that we are adequately secured and we cannot lend it to insolvent borrowers. There are lines we cannot cross, but within that we can take a lot of risk. Is, you know, the question for Companies Like that, you really hit the most affected sectors. And we would have to be lending on some sort of an assetbased basis. It is something that we are looking at. Rep. Taylor my question is a yes or no question, can you do this without an act of congress, or do we Congress Need to take an act and give you the authority . Do you have the authority today, if you decide, we need to do this. We can make these loans to the lower healthier properties to try to get them to the other side. If we get them to the other side, they can reemploy people and the communities will survive. There are whole communities that will die or be badly impaired if they lose their hospitality space, or lose shopping centers, which are important to the community. Do you have the authority, or does Congress Need to act to give you the authority . Chairman powell without looking at numbers, if you are talking about low leverage situations where it really is a liquidity problem, we do have that authority. In some of the cases, though, it is purely average is 62 e of leverage. Aroundtate is normally 16 times, well outside the range of what you have stated by rule that you can do. My question is, do i have to pass a law so that you can get into this space, or do you have the authority to say, right now, we are going to take action . Chairman powell i think that some of the problems in that space are or will be better served by fiscal policy. I think we can probably reach some of them as well. The answer would be both. Rep. Taylor thank you. Chairwoman waters miss what extent, you are granted five minutes. Powell, you, chairman for joining us again today and all you are doing during these difficult times. One of the most stabilizing thing that congress did was to expand Unemployment Benefits by increasing the benefits by an extra 600 a week on top of the benefits that the state provides. In virginia qamar maximum weekly so the extra70, money has been a huge relief to that over 822,000 virginians who have applied for Unemployment Benefits since march 15. Benefits enhanced will expire at the end of july. Do you anticipate on a plummet rate falling significantly by that time . The Unemployment Rate falling significantly by that time . Chairman powell reasonably, many forecasters would say, and i would agree, that we should see strong job creation between now and in the end of july. That may mean the under plummet rate comes down. One of the arguments against continuing the benefit is it is too generous. Some of my colleagues are suggesting that employers are having a hard time getting employees to come back to work because this is more lucrative than what they make in their regular jobs. Is that something you have encountered as far as the original surveys, have you gotten information that employers are trying to hire people back and they are having trouble doing so because the employees at say i would rather just kick back and collect unemployment . Chairman powell here is what we have been hearing. It is a little bit different. Many employees are reluctant to come back quickly, and it may the 600 because is generous compared to what they make, maybe they were not making that much. But it is also, if it is a Service Economy job and you are close to someone, it is a barbershop or beauty parlor, any of those things, there is still reluctance on the part of people going back to work, if they can delay that. More broadly, of course the program ends at the end of july, it is probablyt important to continue it in some form. You would not want to go all the way to zero on that. I am glad to hear that. And what you said, talking about people not feeling comfortable going back to work, is consistent with what i have heard anecdotally, that people are concerned about the safety of those and they have at home, who may be elderly. And a lot of people in my district, i would imagine it is nationwide, are having trouble accessing childcare, because many of those centers have closed. Yellen former fed chairs and bernanke have endorsed a proposal, an act that would tie federal unemployment to the state of the economy. For example, changes in the Unemployment Rate. Do you agree that we should tie assistance to the condition of the economy or what are your thoughts on these processes that would have set triggers for the legislation and benefits to continue . Chairman powell i think that you have almost two months, a month and a half until the end of the program. And i think you are looking at a lot of ideas, and number of proposals coming up from bipartisan groups, and i think doubt you are thinking what should the next part of support look like. And i think those ideas are interesting. I do not want to endorse a particular idea or program that somebody has proposed, but i think that those things are worth careful consideration. I want to thank you for all theour transparency and programs the fed is administering, and also for having listening sessions and your willingness to make changes who might be eligible for the program, you know, in terms of the money amounts and things like that, by opening it up to more people. I appreciate your responsiveness. I will yield back. Chairwoman waters