32 95 cents, plus shipping and handling. Every purchase supports our nonprofit operation. Scan the code on the right or go to cspanshop. Org to preorder your copy today for delivery this spring. I9 and now, Federal Reserve chair Jerome Powell testifying on the fed semiannual Monetary Policy report before the House Financial Services committee. He says that Economic Activity expanded at a strong pace over the past year with inflation lowering, unemployment and the u. S. Economy performing better than other countries. He also touched on the status of Interest Rates. This is about three hours. We will come to order. The tears authorized to had to recess at any time. This is the Federal Reserves that are annual monetary report. Without objection, all members have five days in which to submit extraneous materials for inclusion in record. I will note at the outset, we have a hard stop at 1 00 p. M. To the observed. I see chairman powell smile. Thats three hours. I will know recognize myself for the opening statement. In june of 2023, the conversation in washingtons concerning inflation gnificantl not because of the lectionary fire has been extinguished. From the most recent data available, food cost is ■up 21 as President Biden took office. Energy costs are up more than 32 . Shelter costs are of more than 19 and you will pay 37 more for a dozen eggs in america today. As we said in january, people are still paying more for the basics of life and the prices they are paying are still high. And they arent happy about it, as you know, it is our ownp colleagues know. But according to the Biden Administration, they should be thrilled. In an attempt to score political points, many in washington have decided the best strategy is to tell people what they are feeling isnt actually accurate. They claim biden onyx has brought it down, and their so called rescue plan put our economy back on the track. Of course, we know the opposite is true since inflation skyrocketed soon after the American Rescue plan was an act. Which was predicted by several former Obama Administration economic officials. Instead of working to solve the issues cainhigh prices, the administration is playing the blame game. Some democrats have even trained fire on you, chair powell, blaming Interest Rate hikes, which were necessitated by democrats bending for the high cost and brazenly calling you to make cuts prematurely. Its highly inappropriate for wall makers to attempt influence military policy. Chair powell, i have faith that you will not allow politics to cloud your judgment and the right to tackle inflation. As i have always said, you are a steady hand, and i believe you are committed to the Federal Reserve, as i might. Just as you rejected th outside ushers of politically motivated agendas, i hope you will be just as attuned to the threat of politicization when the calling is coming from inside the house. Vice chair michael bars so called holistic review of requirements represent a concerning trend artisan proposals taking priority over supervision. This has realworld impact, as we saw one year ago this month when the supervision and regulation arm of the said was late catching up to the effect of the acceleration of Interest Rates of the banking syem. Americans were understandably shaken by last years turbulence. As we continue to monitor potential instability, including Bank Exposure to commercial real estate, it is critical that the fed keep its eye on the ball. This 0odoes not include enactin new farreaching and ultimately harmful regulatory policy, though. As you know, members on both sides of the aisle on this committee and in congress have made clear that the proposal would be catastrophic for families, communities, Small Business is. Regulators should withdrawitove i think thats the proper course for something is deeply flawed as the current proposal. Additionally, given that another significant proposal will ultimately have to fit together, they cannot we proceed with them as separate modules or using a cut and paste approach. But most importantly, the scard altered, i strongly urge you and other regulators not to finalize a longterm debt proposal. Instead, i d you to stick to the task at hand and all of the data. The stakes are way too high to be politics over some policy. With that, and i will now recognize the Ranking Member of the work committee. Think you very much, mr. Chairman. Good morning, everyone. Welcome back, chair powell. While i am pleased with the progress the administration of made to tackle inflation, we are not out of the woods yet. In fact, even though her mother my republican colleagues refuse to acknowledge this fact, housing is still the number one driver of inflation. Based on the latest data, housing costs continue to make up nearly 70 of overall price increases, outpacing modest wage gains. We address the underlying housing supply shortage and americans will continue to pay an increasing share of their income on housing. The affordability prices will worsen, and inflation will remain ■too high. With that said, its hard to understand why republicans feign concern about the economy. They are unwilling to address the key driver of an elation housing. In fact, republicans of only put forward legislation that makes things worse for millions ans, including moving legislation to slash funding for federal housing programs, including in rural america. This abysmal record of housing is par for the course for republicans. They have convened only six hearings on housing. On top of launching baseless impeachment efforts, censoring members, and pushing our government to the brink of multiple it is clear that republicans are too focused on drama and chaos to deliver anything to the American People. That is not how chair of commit during the 116th and 117th congress, not only did we hold 55 hearings on housing, but i and my fellow democrats enacted 12 critical housing bills into law in the last congress alone. They helped stymie addictions, foreclosures, ■keeping millions safely housed during and after the pandemic, unlike republicans. We dont just talk about the issues. Democrats make law. As House Republicans continue to support, Committee Democrats are offering evidencebased solutions. Affordable housing agenda is a top i already. Thats why i and my democratic colleagues reintroduce three groundbreaking bills to address the housing crisis and bring down inflation once and for all. This includes housing Crisis Response act, the ending homelessness act, and the down payment toward equity act. Together, these bills would create nearly 1. 4 million affordable, accessible, and resilient homes, reduce housing costs and homelessness, and revived the American Dream of homeownership for all. So when my republican colleagues are ready to get serious about our economy and inflation, democrats are ready to work with pass bills into law. In fact, tomorrow at noon, i and democrats and more than 30 housing advocates joined together in a press conference to share just how merchant ending the Affordable Housing crisis is to the state of our union. So i invite all of my republican colleagues who say they care about the decision to come and ■ join us. I look forward to discussing this critical issue with chair powell today. Mr. Chairman, youll back my time. Welcome, chairman powell. Runaway inflation and ill have reeling. And while the recent price increases have come down, the overall level of prices remain high. The toothpaste is out of the tube, and the average American Family still is paying about 15,000 more for the same busy service is that they were purchasing just three years ago. So americans have suffered years of eroding purchasing power in their paycheck. And while thats resolved in getting inflation back under control, im not pleased by the ■. 6 unjustified was supplied and under analyzed regulatory proposals. The fed needs to withdraw and repropose the irredeemably lot proposal, especially given that 97 of Public Comments across the ideological vectra expressed disapproval of the propos. Chair powell, i urge you to listen to the American People. Withdraw the proposal and tell us today with the feds lands are moving forward. I yi. The chair now recognizes mr. Foster for 1 minute. Thank you, chair powell, for being here today. I read the Monetary Policy work from cover to cover due to an airline delay. The thing i got again and again is that things are fairly well recovered from covid and normal. Ordinary Monetary Policy and fiscal policy will allow us to satisfy. Today, unemployment stays near historic lows, down to 2 year overyear compared to 6. 5 in 2022. The stock indices are hovering around major highs. Growth continues to beat expectations, and the u. S. Economy has added more than 13 million jobs since President Biden took office. The gdp is back on the trajectory it wouldve had pre covid. Theyve added nearly 800,000 jobs, employ more workers than any time theres also the physical response that we engaged in and was appropriately tailored and a soft landing with insight. Thank you. I yield time. Today we welcome the testimony of Jerome Powell of the board governors. As you know, you will be recognized for five minutes of the summary of an oral presentation. Testimony thout objection, the written testimony will be stated for the record. Chair powell. Chairman mchenry, Ranking Member. I appreciate the opportunity to present the Federal Reserves semiannual monetary report. The reserve remains squarely focused on our dual mandate to promote maximum employment and the economy has made am considerable progress for these objectives over the past year. While inflation remains above the objective, 2 is substantially, and slowing and inflation has occurred without significant increase in unemployment. As a labor market tightens and inflation is continued, the risk to achieving our goals have been moving into better balance. Even so, the committee remains highly attentive to inflation risks and is acutely aware that hardship, especially on those least able to meet the higher cost of essentials like food, housing, and transportation. We are strongly committed returning inflation to 2 objective, or serving place stability to achieve a sustained period of strong labor Market Conditions and benefit all. I will review the current Economic Situation before turning. Economic activities expanded at a strong pace over the last year. For 2023 as a whole, the product increased 3. 1 , hosted by solid consumer demand and improving supply conditions. Activity in the housing sector h subdued over the past year, largely reflect. High pear to been weighing on business fixed investments. The labor market remains relatively tight with ply and demand conditions continuing to come into better balance. Since the middle of last year, theyve averaged 239,000 jobs per month. The Unemployment Rate has remained near his were closed at 3. 7 . Strong job creation has been a company fight and an increase in the supply of workers, particularly along individuals aged 25 to 54, and a strong continued case of immigration. Nominal wage grthng, although t workers gap has narrowed, labor demand still exceeds the amount of available workers. A strong labor market has also helped to narrow longstanding this verities in employment and earnings across groups. Inflation has eased notably in the past year but remains above the longer run goal, 2 . Total personal Consumption Expenditure prices rose 2. 4 over the 12 month ending in january. Excluding the food and energy categories, core pcu prices rose 2. 8 . A notable slowing from 2022. It was widespread across both goods and services prices. Longterm Inflation Expectations appear to have remained well anchored as reflected by a broad range of surveys, household, businesses, and forecasters, as well as financial markets. We have maintained the rate at 5 1 4 to 5. 5 since the meeting last july. Weve also continued to shrink our balance on the risk case. The restrictive stanza monitoring policy is putting downward pressure on economic midi and inflation. We believe that our policy rate is likely at its peak for this timing cycle. If the economy evolves broadly as expected, it will be dialing back restraint at this time this year. The economic out date is to our not short. Reducing policy restraint too soon or too much could result in reversal of august we have and inflation and ultimately requires even tighter policy to get inflation back. Reducing poly restraint too late or too little could unduly weaken Economic Activity and employment. Considering any adjustments to the target range for the policy, we will carefully assess the incoming data, the evolving outlook, and the balance. Committee does not expect that et range until it has created confidence that inflation is moving steadily towards 2 . We remain committed to ringing inflation down to our 2 goal in keeping our expectations well anchored. Restoring price and stable prices over the longer run. To conclude, we understand that our actions affect businesses in communities across the country. Everything we do is in service to our public mission. We have the Federal Reserve will do everything we can ntmen stability goals. Thank you. Thank you, chairman powell. I should know this at the outset, this is your 25th testimony before the congress as chair of the Federal Reserve. K you for your service and your commitment to congressional oversight. Very much appreciate it. I will not recognize myself for 5 minutes for some questions. Lets begin with what is top of mind. Two issues that are top of mind with the fed. With the michael bart proposal on capital and Interest Rate. The lens of a politil year falls heavily on all government, all parts of government. Theres a lot of debate about the past three years of high inflation and the impact on american families, and now that inflation is ruth leaving, theres been a great deal of speculation about when the fed would cut rates. Some say theres going to be a lot of rate cutting this year. I would say not. You . I say that really it will depend on the economy. Our focus isonm employment and price stability, and those are the things we will be looking for. I can go further if youd like. At what point will the fed be forced to cut rates . What kind of data was. 2 . Do you have any updates there . What we said was that headline inflation has moved down more than three full Percentage Points down to 2. 4 , as i mentioned in my remarks. We want to see a little bit more data so that we can become confident so that we can take that step of beginning to reduce policy rate. A very important step. Because of the strength of the economy and the labor market and the progress we have made, we can approach that step carefully and thoughtfully and with rater confidence. When we reset confidence the expectation, as we will sometime this year, we can begin dialing back that restriction on our policy. Lets pivot to regulatory policy. Did you know there been serious concerns expressed on both sides of the aisle and across america and across the industries about the proposal that vice chair michael barr has proposed and the fed is taking up. The concern is on both process being how that opposed rule was analyzed and developed. The general concern of the lack of economic justification for these actions, anthe substance. The proposal goes much further than the Committee Recommended on Capital Requirements, putting us at a great disadvantage internationally potentially. My first question is substance. Is the fed listening to these comments . They have been nearly unanimous in opposition. Is the fed listening to these comments on Everyday Americans . And what is the status on rulemaking and what is the plan Going Forward . You are right. We have received very substantive comments asll impac put out. We got those responses in mid january and we are carefully analyzing them. We had asked for vespecific details, and im happy to say that we did get that. So we are just now reaching the stage where we can begin to make decisions. We havent really made any decisions yet. But i think i can say a few things. First, we do hear the concerns. I do expect there will be broad material changes as we move along. I am confident that the final product will be one that does have broad support, both with the fed and in the broader world. As far as process is concerned, we are really not at the stage of making decisions about that. Thats down the road. I will say, the question we get is reproposal. And we havent made that decision. If, when we get to that point, that turns out to be the appropriate thing, we wont hesitate to do that. You would not rule that out at the stage of the game . R3■z not at all. I think its a very plausible option. Okay. And theres a lot of concern about the interway between different hearts of the world. If you change one, what does Economic Analysis look like for the new proposal . So its good to hear that they will do a traditional role of building consensus around substantive changes. And that is your intention. That is right. I said this would be a thoughtful, delibera