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 t