The future expectation. Of course, it seems at least one of the elements feeding into Consumer Confidence is the fact to continue to see stocks push higher. We are seeing the dow and s p 500 at records again. The nasdaq not at that level but we have seen this remarkable run continuing for stocks. Another way to measure that is the monthly performance of the u. S. Stock market. We had the s p 500 monthly change. Potentiallyng at eight straight months of gains, not assured. We had rocky performance earlier this month, but we are heading for a gains to close it out. We will see if anything changes. Also, couple of deals or when deal and one deal not happening. Work capital agreed to buy Buffalo Wild Wings for 2. 4 billion. The already own rvs and cinnabon. 1. 57 a share. Buffalo wild wings is up. Emerson electric is withdrawing its offer. Remember that proposal and emerson shares are up and rockwell also trading higher. Rejectedpeatedly emersons offers. As we head into this jay powell hearing, look at the bloomberg, just a look at the yield curve, which we have been talking about, the spread between the treasury market, along with the fed target market on the top and the actual spread around 57 on the bottom. This is something the fed obviously is going to be watching as it goes through the next several months and year, as you continue to have muted inflation but the expectation that the fed is going to raise rates. Mark first game in three or four european stocks. My new favorite function is wm , showing you how all of the various countries are faring across the European Equity space. 9. Ftse in london by Energy Companies gaming today gaming today gaining today. Also, chinese macro data flowing home sales increasing the outlook for demand in the worlds biggest user. Lets get to that weather in the oil industry. Shellup by over 4 up over by 4 . Do is it isrying to seeking to demonstrate it has left the worst of the crude slumped behind it and reiterated a 2015 plan to buy back at least 25 billion of shares from 2017 to 2020. That is subject to reducing debt further and a recovery in all prices. From the oil industry, we see the are reaping the benefits of cost cuts made in response to the collapse in crude prices for years ago. I want to show you shares from yesterday. The bank of england revealing all vendors pass the stress test for the First Time Since it started the exercise. Barclays with the weakest of the seven major banks in the exercise. They were ordered they were not ordered to raise capitals in likes of the actions they made since the end of last year. I want to focus on shares of Credit Suisse today because we spoke to them and he said, employees should not expect a big increase in compensation in 2017. I think this year, you have seen profits and there will be a balance. You should not expect anything spectacular but something fair. , so not a big increase compared to the Previous Year so not a big increase compared to the Previous Year. Mark he acknowledged shareholders have gone through tough times and options are on the table to return cash to investors as profitability improves. It is down by about. 3. Vonnie thank you. The confirmation hearing in the u. S. For Jerome Powell is underway in the u. S. That is what you are watching now, the floor vote will be at a later date. Lets bring in michael mckee, our International Economics policy correspondent. Dan moss, writer for bloomberg view, and inside the hearing deal is jeanna smialek. Jeanna, which is the nearly 2000 questionnaires will view most the listening for . Jeanna i think more questions than questionnaires. I am curious to see if he is asked about that independence because i think that will be the major question for the chairmanship and tally expects to respond. I think it will be a real Crucial Point to watch today. Vonnie michael, you heard her saying it is the questions more than the questioners, but there will be some firebrands trying to ask pointed questions. Michael we are watching one now, elizabeth warren, she is someone who would prefer low Interest Rates to spur grab jet pittsburgh job growth. O spur job growth. Powell isis not not a very controversial person, so it is not like she is taking on janet yellen like other hearings. Other than that, i would think this is a smooth hearing. Howell has been confirmed, they know him, they know his background. There isnt a lot to discover. When you look at his testimony, take powells name off a bridge and put yellens name and it would look the same. Mark how can you distinguish himself and differentiate himself from current fed chair janet yellen . J. Powell as the governor has not dissented from one decision since he has been at the board. It is true, that most of the descenders are of the District Bank but the objective of a confirmation hearing is to get through it, get confirmed and see what you want to do. Go back to 2005, ben bernanke his confirmation hearing was about would rates go up at a measured pace . They scattered question or two and it seems pointed. Vonnie it feels like deregulation will be front and center. What will he give away on it . He doesnt need to hide anything. My quote no. Michael no. He is familiar with it and has a pretty good working relationship with the new vice chair for supervision. They worked together at the treasury department, so he has said in his Opening Statement he is willing to tweak aspects of doddfrank but there is a question of what can they do because much is statutory and they do not have as much discretion as some members of the Republican Party would like, so that may be one aspect to explore today. Not just what would you like to do but what can you do . The saying that by support changes in the volcker rule is not up to the fed. Vonnie we have seen hearings for lowlevel nominees, but i want to ask what the market anticipates from today, will we see movement . Jeanna i think it is unlikely because j. Howell is likely to not rock the boat. A steady hiking paths and this isnt the moment he will try to send messages about that because the order of the day is trying to get him confirmed. Were severalthey nominees, but even if and when howell gets confirmed, there are still openings at the reserve. Will that make a difference in direction . Dan it could, but at every point in the past presidencies, we have published stories saying president x has the chance to remake the fed in his own image. We have learned that circumstances that come along, more than an ideological predisposition, tend to shape what happened. Take a we are going to short break. Thanks to michael mckee, dan moss and jeanna smialek. We will be back in a moment. Confirmation hearings for jay powell is ongoing this morning. This is bloomberg. Vonnie you are watching bloomberg markets. The confirmation for Jerome Powell is underway. Lets bring in michael mckee, and inside the hearing room, jeanna smialek. Hearel, we are likely to great things about the economy from one side of the aisle, but also likely to hear a question on what Jerome Powell might decide to do should things go wrong with the committee . Should the recovery stalled. Should we see the yield curve inverted, whatever it may be. Michael we hope somebody asks about that because that is what we do not know. The market is anticipating Jerome Powell will carry on Janet Yellens policies with slow, gradual rate increases in 2018 and the feds forecast will remain the same for lowering unemployment and the great inflation rising. What happens if that isnt it . He is not an academic, so there are not a lot of writings about the economy and what he has thought about it in the past. As dan pointed out, he always voted with the chair, so we do not have independent views. He is not spoken about Monetary Policy a lot. How does he react when circumstances change . A healthy debate within the fomc about inflation. Should, could, will Jerome Powell get through the process, would he be considered the target . Dan a reconsideration of the target is tough when youre not hitting it. Was time they did this september. They are only showing barely 2 , which is the target over time horizon of a couple of years. They have this space it will get there. Janet yellen has called it a mystery. Jay powell called it a mystery before she did. How that unfolds will be critical. Vonnie in the background is tax reform and jay powell coming from a private equity background in business background. How much will that play into the questioning and answering . How much onus will be put on fiscal policy makers to make the economy grow as opposed to just read policymakers . Be aa it will probably fascinating thing to watch play out today because when these guys testify on the hill, reducing questions about fiscal policy. I expect to will be asked about it. How the answers will be instructed. They are hoping to see a plan that results in a supplyside boost and improves the outside potential of the economy. They do not need to see something that would be quick demands because that would result in having to hike rates faster. It Jerome Powell chooses to answer in detail, we will hear something along those lines. Mark you talked about financial regulation. When it comes to banking supervision, who is the boss . Michael ultimately, powell, although quarrels will drive things. We have heard from jay powell in the past that he would like to raise the level at which banks are subject to additional regulation. It is currently 50 billion. Suggestions that it could go up, but how will never put a number on it. He has talked about making it easier for smaller banks, getting rid of regulations, and they may ask them to expand on that. He has talked about the volcker rule and tweaks made to that. Particularly if you are Small Institution that does not to lcker trading, do you need to be subject to the same regulations . A lot will be driven in terms of what the fed does by what is possible in terms of regulatory policy as opposed to statutory policy. Vonnie i believe Jerome Powell is about to begin or at least we should have a listen in to see what is happening now in the hearing room. Governor powell, you may proceed. Thank you chairman crapo and Ranking Member brown. I will introduce my wife, without whose loving support and wise counsel, someone else would be sitting here. I will also introduce two of my advised siblings, my sisters, and the other three siblings, who are here in spirit, and all will have claimed to watch the hearing live. [laughter] which i am sure will be true. We will deem it true. Some stories are two good to too good to fact check three thank you and other members thank you for scheduling this hearing and providing me the opportunity to appear before you today. I would like to express my gratitude to President Trump for the confidence he has shown by nominating me to serve as chairman of the board of the Federal Reserve system. The Federal Reserve has had a productive relationship over the years and if you and your colleagues see fit to confirm it, i look forward to working with you in the years ahead. I have served as a member of the board of governors and fomc for more than five years, contributing to a variety of capacities, including chairman of the Boards Committee on supervision and regulation. My views on the wide range of regulatory issues are on the Public Record in speeches and testimonies during my service at the fed. Congress established the Federal Reserve more than a century ago to provide a safer and more flexible monetary and Financial System. You assigned us the dual Monetary Policy goals of maximum employment, meaning people who want work either have a job or likely to find them quickly, and price stability, meaning inflation is low and stable enough it need not figure into Household Economic decisions. I have had the privilege of serving under chairman bernanke and chair yellen, unlike them, i will do everything in my power to achieve those goals well preserving the Federal Reserves independent and nonpartisan status vital to their pursuit. In our democracy, transparency and accountability much company that independence. We are accountable and transparent in many ways, in one of them by publishing our economic and Interest Rates production quarterly. Since 2011, the chairman has conducted conferences to explain their thinking and we are accountable to the peoples representatives through twice a year reports and testimony, as well as oversight and audited financial statements. Im committed to that framework of transparency and accountability and to continue to look for ways to enhance it. In our federated system, members of the washingtonbased board participate in fomc meetings with the president s of the 12 Federal Reserve banks, which are rooted in their local communities. I am a strong supporter of this structure, lets which helps ensure diversity and sustain the public support for the Federal Reserve. If confirmed, i would strive with colleagues to support the economys continued progress toward full recovery. Our aim is to sustain a large job market with inflation moving up toward our target. We expect Interest Rates to rise further in the size of our Balance Sheet to shrink. However, while we endeavor to make the path of policy predictable, the future cannot be known with certainty, so we must retain the flexibility to adjust our policies in response to economic developments. Above all, as we drop on lessons of the past, we must be prepared to respond to new and unexpected threats to our nations Financial Stability and economic prosperity. The original motivation for the founding of the Federal Reserve. As a regulator and supervisor of banking institutions, we must help ensure that our Financial System remains stable and efficient. Our system is far stronger and more resilient than one decade ago, with higher levels of capital and liquid assets, greater awareness of risks banks run and greater ability to manage them. Ton as we have worked implement improvements, we have sought to tailor regulation to the size and profile of banks, particularly community ones. We will consider appropriate ways to ease regulatory burdens revise core reforms with stress testing, resolution planning, so they can provide this misses necessary to sustain a prosperous economy. In doing so, we must be clear and transparent about municipals driving our decisions and expectations we have further institutions regulate. To conclude, inside the Federal Reserve, we understand decisions and not areas matter for American Families and communities. Im committed to making decisions objectively and based on the best evidence. In doing so, i would be guided solely by amended in congress and with the interest of the american public. Thank you and i will be happy to respond to questions. Thank you, governor powell. The said begin the process of the fed began shrinking its Balance Sheet. In a speech earlier, you said estimates around the appropriate size of the Balance Sheet is 2. 4 billion to 2. 9 billion by 2022. What do you believe is an appropriate size for the feds Balance Sheet and what factors you expect to focus on in determining the pace and scope of the Balance Sheet reduction . Governor powell i will. It is about 4. 5 trillion now and we know it will be smaller than that when it reaches its new equilibrium size. It will be larger than it was before the crisis. Wille have also said it consist primarily, mostly of treasuries and it will be no longer than it needs to be to conduct Monetary Policy. We will be shrinking the Balance Sheet while allowing securities as they mature to rolloff properly and that process should take three years or four years before we reach our new stable level of the Balance Sheet. The factors that determine that will be in the end the public demand for our liabilities, particularly cash and reserves, principal factors that will decide what the final size of the Balance Sheet will be. We do not know what that demand will be but my own thinking is it moves us to a Balance Sheet in the range of 2. 5 trillion to 3 trillion and there is no certainty in that. The last time you appeared before the committee, he stated it is important the intensity of regulation be tailored appropriately for the risks of institutions present. There is bipartisan support to tailor existing laws to make sure they are proportional and appropriate. Are the specific areas you think could benefit most from tailoring . Gov. Powell yes. First, let me say that tailoring of regulation is one of our most fundamental principles. We want regulation to be the most stringent for the most complex institutions and we wanted to decrease as he moved down to regional and Community Banks. This is something we strive to a