That the recovery will be as strong as possible and to limit lasting damage to the economy. In recent months Economic Activity picked up as the economy began to rope. Many businesses opened their doors. Factories restarted production and many left their homes to engage in various activities. As a result Household Spending looks to have recovered about half of its earlier decline although spending for services such as air travel and hotels has shown much less of a pickup he recovery in Household Spending owes to benefits which provided substantial and timely support to household incomes. In contrast, indicators of businessfixeded investment have yet to show a recovery. Even with the improved Economic News in may and june, overall activity remains well below its level before the pandemic. The contraction in g. D. P. Will likely be the largest on record. The labor market has followed a similar pattern. After drops in march and april, employment rose strongly in may an june as many returned to work after temporary layoffs. Of the 2 million jobs lost about 1 3 have been regained on the payroll report. 11. 1 remains far below its level during the outbreak. The downturn has noll fallen equally on all americans and those least eable to bear the burden have been most affected. In particular the rise in joblessness has been severe for ower wage workers, women and africanamericans hispanics. The pandemic has left a sfant mark on inflation. For some good, including foods, supply constraints have added to higher prices. More broadly, however, weaker demand, especially in secondors such as travel and hospitality that have been most affected by the pandemic has held down prices and inflation is below our 2 objective. Along with the recent increases in Economic Activity have come new challenges. After declining from a peak near the end of april, the number of cases has increased sharply in many parts of the country. We have entered a new phase to contain the virus which is essential for both the health and the economy. As we has emphasized throughout the pandemic it is extraordinarily uncertain and will depend on our success to keep the virus in check. We have seen some signs in recent weeks the increase of virus cases and renewed measures are starting to weigh on Economic Activity. For example, some measures of consume r spending base on credithas moved down since late june. Card use recent market indicators show a slowing of job growth full recovery is unlikely until people are confident it is safe to reengage in a broad range of ctivities. The path forward will depend on policy actions taken at all levels of government to support the recovery as long as needed. The Federal Reserves response has been guided by our mandate to have maximum employment along with our responsibilities to have the stability of the inancial system. We have committed to using our full range of tools during this time. We have held the policy rate near zero since midmarch and stated we would keep it there until we are confident the economy has weathered recent events and will achieve the price stability goals. We are purchasing sizable uantities of mortgagebacked securities to have those conditions in the market which are vital to the flow of credit in the economy. To sustain smooth market functioning and effective transmission of Monetary Policy to increase the holding of mortgagebacked securities at least at the current pace. These are fostering more accommodative financial conditions. The Federal Reserve is taking actions for household businesses large and small and state and local governments. Without access to credit they are forced to go back to necessities or lose their homes. Businesses could be forced to downsize or close, resulting in further job losses and income losses and worsening the downturn. Preserving the flow of credit is sential for mitigate pg the mitigating the damage to the economy and promote the economy. We require the support of the Treasury Department and available only with very unusual circumstances such as though those we find ourselves in today. These benefit the economy by providing financing were not otherwise available. In addition as serving as a backstop the programs appear to have significantly increase the extension of credit from private lenders. We are deploying these lending purr powers to an unprecedented extent enabled in large part by financial backing from congress and the treasury. Well use these powers until we are confident we are solidly on the road to recovery. This week we extended these programs through the end of the year. When the time comes after the crisis has passed we will put these tools back in the toolbox. As i have emphasized before these are lending powers not spending powers. The fed cannot grant money to beneficiaries but only create facilities with roadbased eligibility to make loans to solid entitys with the expectation that the loans will be repaid. Many borrowers will benefit as will the overall economy. But for many others getting a loan that may be difficult to repay may not be the answer. In these cases direct fiscal support could be needed elected officials have the power to tax and spend to make decision where we should direct our collective resources. The fiscal policy action have made a critical difference to communities across the country even so the current economic downturn is the most severe in our lifetimes. It will take a while to get back that prevailed at the beginning of the year with support from monetary and fiscal policy and before taking your questions i will provide an update on our review of Monetary Policy framework. As a reminder we began a public review of Monetary Policy and strategy tools and munication practices and then how we best meet the maximum state price stability objectives in the years ahead. Particularly in light of the low Interest Rates around the world. As is evident the lower level of Interest Rates has reduced the scope to cut Interest Rates. The plans to conclude this review were delayed by the pandemic my colleagues and i resumed our discussions and our ocus was on possible enhancement to our statement on longer run goals and Monetary Policy strategy. The documents state our goals in our approach to Monetary Policy and serves at the foundation for policy actions. Will i do not have any details to share today i am confident we will continue to make progress and will wrap up our deliberations in the near future. We understand the work of the fed touches communities and families and businesses across the country. Everything we do is in service to our public mission. We are committed using our full range of tools to support the economy and help assure the recovery from this difficult period will be as robust as possible. Thank you. I look forward to your questions questions. Hi. Ith the financial times. Today the fed decided to extend the liquiditys offline with those banks around the world why is that important for the fed and how concerned are you of the shortages through the andemic . Our dollar swap line we introduce those back in the beginning of this episode after the pandemic made itself present. Dollar funding markets were in difficult shape at the time. The introduction of the swap lines has really restored the dollar funding market around the world to fairly normal levels of activity. O they served their purpose. But we extended them i guess yesterday morning to facilitate planning by the central bank so people will know those facilities are still there. We want them to be available as long as they are needed and since the crisis and the economic fallout from the pandemic is far from over, we will leave those in place for the time being until we are confident they are no longer needed. Nothing is going on in the market right now that raises concern we want them to be there as a backstop for markets. Cnbc. I hope you can hear me. Mr. Chairman, you said several imes about spending powers but given that a lot of the capacity has not been abused or barely used do you think this money that has been dedicated to the treasury should be considered as direct grants to businesses that are in need right now or households given that congress is saying the money is limited and they dont want to pass a large stimulus bill . Is this money doing best for the nation as a backstop for Federal Reserve programs that dont seem to be used all that much right now . Thank you and i have a followup, sir. Thank you. Thats a question for congress. They appropriated that money money, 454 billion for our facilities and its a question for them. You are right. We havent done as much lending as we would like but in a substantial measure thats because the market started to work again fairly soon after we announce the facilities. But also in the short term funding facilities that we set up we didnt need the funding that we thought we would. On the other hand, its important to the facilities stay in place. Thats why we extended them yesterday and my they still stay in place and we are very confident with the pandemic and conomic fallout are behind us. I cant really speak to what congress should do but its important that the facilities are there and be fully funded in case the needs do arise down the road than they should be there. Thank you. Could consideration be given to allow the companies in bankruptcy . Not that im aware of, no. Are you there . Nbc. Mr. Chairman. Thank you very much. No doubt you were paying attention when your predecessors were on a couple of days ago they talked about the continuation of the pandemic on Unemployment Benefits and to hear that it could be a disincentive to work. As a followup what have you learned to the degree of which this has led to a widening of the wealth gap in this country that they are experiencing two types of pandemics getting through this based on what they had saved or the initial role to rief that gap. On the first question, i wouldnt want to be giving very detailed specific advice on particular programs and the level they should be at but i ill say that this pandemic and its fallout really represents the biggest shock to the us economy in living memory we were for the lowest levels of employment we had in 50 years to the highest in 90 years and in the space of two months. I would say that the response for Fiscal Authority was strong, fast, broad, and appropriately so. We are seeing the results of the earlier strong fiscal actions. When you see the spending that is happening and Small Businesses staying in business, even though the economy has not sustainably reopened yet in many places, you are seeing what happens with that money so in a broad sense it has been well spent keeping people in their homes and businesses in business which is a good thing. In the broad scheme of things, things, there will be a need for more support from us and fiscal policy. Thats up to congress you can see the ongoing discussions they are having. Nd it suggests to me that both sides are wrangling over various provisions but nevertheless believe there is a need for additional fiscal support. The last thing i will say is that with the expansion even if the reopening goes well and many people go back to work it will still take a fairly long time for the parts of the economy that involve lots of people getting together in close proximity and that means many of the people laid off from those industries as restaurants bars and hotels in public accommodations many people find that hard they cannot go back to their old job. There wont be enough jobs for hem. Those people are going to need support. I cannot say the exact level that they will need support if they are to pay their bills and spend money and remain in the current rental house or apartment so i think there will be a need. In terms of inequality, its fair to say the burden of the pandemic has fallen on everyone on people who work in the Service Industries at relatively lowpaying jobs. There was a figure that came out of our research. If you make 40,000 per year or less, then you had a 40 chance of losing your job in a primate. And may. April that happens to be heavily skewed to minorities and women. That is just what the pandemic is doing. In terms of what we are doing, what we are trying to do is create an environment in the Financial Markets and the economy where those people have the best chance they can have to go back to work to their old job or a new job. That is really what we are doing. Everything that we do is directed at that. I would say one last thing on inequality. Been a growing issue in our country and economy for four decades. You see it, it has many faces. You see it in the relative flattening out of incomes for people in lower and middle incomes as compared to those at the top. You see it in low mobility, where the chances of moving up from the bottom to the middle or top have declined and are lower than they are in other comparable, wealthy countries. It has got underlying causes that are not related to Monetary Policy, to our response to the pandemic. It is about globalization, the flattening out of Educational Attainment in the United States compared to our other competitor countries. It is about technology advancing, too. If you are on the wrong side of those forces, your income is stagnant. It is a critical problem for our society. Are part of it is to push as hard as we can on our employment mandate while keeping price stability. We saw what happened to people at the lower end of the income spectrum at the end of the last expansion. We saw that the biggest wage increases were going to people at the bottom end of the wages spectrum for the last couple of years of that 1 expansion. A tight labor market is probably the best thing that the fed can foster to go after that problem, which is a serious one. Chair powell, you have described your asset purchase objective as stabilizing markets. With markets having stabilized, arent the asset purchases now doing more than address the market function by supporting your macroeconomic objectives . What is your strategy going to be with respect to using asset purchases to support your macroeconomic objectives Going Forward . Thanks. Chair powell so you are right. The asset purchases in their current size really spring from severe dysfunction in the markets at the beginning of the Market Reaction to the pandemic. Thanks to those purchases, we have substantially restored, not fully, but substantially restored functioning markets. This is absolutely critical. That market is part of the absolute bedrock of the global Financial Markets and it is essential that it work well and it is doing so now. We have always said, though, that we understand, except, and are fine with the fact that those purchases are also fostering a more accommodative stance on Monetary Policy, which would tend to support macroeconomic outcomes. So it is doing both. We have understood that for some time. The programs are not structured exactly like the qe programs were in the last financial in the aftermath of the last financial crisis. Those were more focused on buying longer run securities. The current purchases are all across the maturity spectrum. Nonetheless, they are supporting accommodative financial conditions. In terms of our strategy, that just remains to be seen. As you know, we have spent a lot of time in meetings this year looking at the tools that we have to adjust our current stance. We do feel that our current Monetary Policy stance is the appropriate one. We cut rates close to zero right at the beginning. We ramped up asset purchases. Those have really helped. We gave Forward Guidance on both of those things, which the markets appear to understand and Market Pricing is consistent with those. We think that our policy stance is a good one. We are prepared to adjust that stance as appropriate, when we deem it is appropriate to better foster achievement of our goals come of course goals, of course. Thanks for taking my question. I was wondering if you could tell us a little bit about that. You handle potential conflicts of interest during this conversation . Chair powell blackrock is just our agent. We make the policy decisions in conjunction with our colleagues and they just execute our plans. I actually dont remember exactly what i would have been talking with him about. He is the head of a Major Service provider. If wecks in to find out are ok with the quality of service that blackrock is providing. I dont have the daily, face to face interaction with anybody else that blackrock. Conflicts are managed extremely carefully in the contractual arrangements that we have with them. Exactly cant recall what those conversations were but they would have been about what he is seeing in the markets and things like that. You know, generally exchanging information. He is typically trying to make are getting good service from the company that he founded and leads. I would say that is his Main Objective when we talk. Thank you. We will go to scott. Thank you, mr. Chairman. Scott from npr. I wonder if you could give us an update on the coin shortage that you talked to lawmakers about last month. Else, is thising about sort of economic circulatory system . Chair powell the situation with coins is that the quantity of wass is going up, but adequate before the pandemic. The problem is that circulation kind of stopped because stores were closed, banks were closed. Customers were not spending. The coins stopped moving in the system. So we have been working ever , wee that began to happen saw it happening right away, we have been working to try to reverse that disruption of the supply chain. We are working with the u. S. Meant to address the issue mint to address the issue. Just last week, they issued a statement asking for the publics help in keeping coins circulating. Various people pu