Taylor rule, how would would that impede your response to such a crisis . The taylor rule would tell us that it should depend on only two variables the current level of real gdp or the out put gap and the current level of inflation. It obviously wouldnt take into account in any way our judgments about growth in the Global Economy how we expected the european economy would be affected or Global Financial markets by these such developments. So in that sense it really restricts any simple rule restricts the setting of Monetary Policy to a very short list of variables and typically there are current values. Thats one of the reasons. We spent spend a great deal of time and the forecast that we include in our Monetary Policy report that the participants right down, we present to the public every three months. Incorporate all of the kinds of information, what what we think is going to happen in the Global Economy, and those are economic developments. Those factor into our Economic Forecast and our view to the appropriate role of policy. We are providing providing a great deal of information to the public by providing these participate forecast. Our participants are telling the public how, in light of their recent forecast, concretely concretely with numbers, they think Monetary Policy should be set. That is information about the so called reaction function, namely the relationship between the economy and Monetary Policy. It is incorporated in Something Like the taylor rule. Thank you so much. Can you provide us with a quick update of this implementation of the socalled collins fix . We appreciate the Congress Passing the collins fix. In light of that we have a great deal of flexibility now to Design Capital standards that we think will be appropriate for the firms that we supervise including the insurance based savings Holding Companies in the insurance. We are working working hard to put in the Public Domain through orders or proposed rule when we figure that out. Thank you so much. The fiveyear look back our colleagues did say that weve been trying to be too big to fail. I dont think frank dodd is trying to be too big to fail. It directed us to be increasing the safety and soundness of Financial Institutions particularly those that are most systemic. It gave us tools to raise capital and liquidity to impose capital surcharges on those firms that would be deemed most systemic. We can use stress testing as a methodology to make these firms much less likely to fail and the amount of capital and liquidity is increased massively since the crisis. In addition dodd frank gave us both title to orderly liquidations which would be a new tool to resolve. I think youve covered it. Back to my idea about the labor market. Do you think ending the sequester and raising the minimum wage would be Good Strategies for getting our labor markets back together . This is a matter of congress. I knew you would say that. The time has expired. The chair now recognizes the gentleman from new jersey. Good morning. In front of me last night i read through what is called the joint staff report the u. S. Treasury market on october 15, 2014. It was the staff report that looked at what happened in the market back in midoctober. Are you familiar with that report and do you adopt that report even though i know the name of it is the joint staff report . This is a technical matter. Is this just the staffs opinion or does this include your opinion . Im certainly aware of its intensive staff work by staff in a number of agencies. I certainly support the report. Okay good, i assume so. I guess there are two questions. I also read your testimony in the addendums to your testimony this morning. First of all, is there a problem and secondly what was the cause . I thought we would all conclude that there was a problem but thats not clear from looking at the addendum to your report that came out as far as your testimony, where it says at the bottom despite the discussions and disruptions, the liquidity and a nominal treasury market do not indicate notable deteriorations. Then you go on to say that there really wasnt much problem in liquidity of the market. You give some talk about that. So i think theres a problem in other people think theres a problem. We had hearings on this and we were told there has been dramatic changes with respect to the market in recent years. So the question is is rich kitchen right that theres a problem in the marketplace or are your staff and you write that there is not a problem . Lets find out if theres a problem first of all. So i dont thing its clear whats happening in these markets. Know, but is there a problem . The report you mention that was just released looked at a 12 minute window carefully in which but overall he is saying there has been deterioration and there is a problem overall. Other panelists have said there is a problem on the market. Youre saying and your staff is saying there isnt any. It isnt clear whether there is or isnt a problem. By some metrics, liquidity looks adequate by trading volumes we dont see a problem but there are metrics that do suggest theres a problem so this is something we need to study. We need need to study it further. So youve studied it so far and have an 80 page report that looked at it and i find it troubling that it doesnt come too much conclusion. What i was looking for was the second question that the chair and i asked and lou and others what was the cause of this . This still fails to come up with any particular explanation. It runs through about a halfdozen half dozen explanation saying these are not the problem. One of them that it does refer to, it says the growth in electronic trading and other factors and regulations. That word regulation only appears twice but your staff says regulation is an indicator to the changes in the volatility and the liquidity in the marketplace. Said regulation is part of the problem right . We just dont have a conclusion about about what happened in the treasury market at this point. Regulation could have contributed in some way to this but there are many other things going on as well. It doesnt say that in your addendum at all. It doesnt say deniers death report. It doesnt say regulation. It doesnt say that here. We never got that answer from sec. Lou or anyone else from the administration. Are you saying today that yes regulations such as Capital Requirements they are potential problems in this area . There are things to look at. We have no way to know that those things you mentioned our problems. During this window. Mask your question . Did you direct your staff to look in to see if that was a problem . They dont say it once in the report that they looked at regulation as a causation. They looked at all other measures. Did you direct them to look at that and will you in the future . We asked them to look at what caused this very Unusual Movement and to study what possible causes and they were unable to find any single cause. They they pointed to a number of factors that could have been at play and it needs further study. Its galatian to be on that list of things that we look at. There is no evidence. Your time has expired. We now recognize ms. Maloney. Welcome chair yellen. I know some of you have been critical of your performance but i think you have done a tremendous job and i want to publicly thank you. You have been very responsive to congress and you have also managed to wind down the quantitative Evening Program very smoothly and right on schedule without causing any major disruptions in the Financial Market id like to ask you some questions about financial policy. Foreign Development Including the turmoil in greece and china, in your words, pose some risk to United States growth. Has the turmoil in china and greece changed your view about the appropriate timing for the first Interest Rate hike . So we look at interim National Development very carefully in developing our forecast. We have been tracking closely developments in greece and china and other parts of the world. The issues that exist are not new. For example, the committee in june was aware of these developments and in june when the participants wrote down their views of the economy and appropriate policy taking into account these developments and the risk they pose, they still thought the overall risk to the u. S. Economic outlook were balanced. They judged that it would likely be appropriate sometime this year to begin raising our target range for the federal funds rate. Of course we have continued to watch these developments, these Global Developments unfold and we will in the coming months. Who are we to judge that these developments did create substantial risks or werent changing the outlook in a notable way, then a change in the outlook is something that would affect Monetary Policy. As weve said all along, we have no judgment about the appropriate date to raise the federal funds rate. Our judgment will depend on unfolding economic developments and how they affect our forecast. You stress in your testimony that the pace of rate increases is more important than the timing of the first rate hike. Many economists including the imf have argued that the fed should wait longer to start raising rates, possibly waiting until next year, but should then follow a slightly steeper path of subsequent rate increases. My question is, if the fed eights longer than current forecast to start raising rates, will that mean a steeper rate of rate increases . If we wait longer it certainly could mean that when we begin to raise rates we might have to do so more rapidly. So an advantage to beginning a little bit earlier is that we might have a more gradual path of rate increases. As i indicated the entire path of rate increases does matter. There are are many reasons why the committee chose an appropriate path of rate increases is likely to be gradual. Given that we have been at this for over six years, it has been a long time, so when we finally begin we will be looking at what the impact of those decisions are on the economy. That strikes me as a prudent approach to take. As you know the markets have been anticipating a rate increase for quite some time and then it will follow one of the meetings that has a press conference afterwards. Currently there is a press press conference after every other meeting. As a result in the market view the fed only has two more chances to raise rates this year in september and november. Would the fed fed feel comfortable raising rates for the first time without a press meeting scheduled afterwards. In other words are the july and october meetings on the table for rate increases . Ive tried to emphasize that every meeting is a live meeting and we could make decisions at any meeting. Weve emphasize that if we were to make such a decision, we would, we would likely have the press a briefing afterwards and we recently conducted a test to make sure that members of the media understand how technically they would participate in such a press briefing. Time of the general lady has expired. We now recognize the gentleman from missouri. Thank you mr. Chairman. A few weeks ago we met and had a long discussion about a number of topics. One of them was Operation Show point. I asked you at that time or mentioned that i was very concerned from the standpoint that oversight reform of this report that they put out with regard to the internal email and memos that showed that they were going well beyond their Statutory Authority and duties in trying to limit the ability of certain legal business. It was impacting a lot of banks in a negative way. The fact that you oversee some of those banks as well, i felt you should be pushing back. I thought you should have a meeting with chairman greenberg. Have you done that yet . Yes i have done that. Ive had discussions with him on Operation Show point and our views about what appropriate policy was an part of the banking agencies with risk back to howard our examiners we both certainly agreed on the importance of making sure that examiners and our policies dont discourage banks from Offering Services to any business thats operating within state and federal law. He and i agreed thats appropriate policy. Did he indicate to you how he is going to stop Operation Show point within his own agency . I dont want to speak about his policy. I think its important that you make the point to him that he has to stop. In this report this report of his own emails within his own department, he is implicated as being part of the problem. Therefore, its important, i believe that important, i believe that you have a discussion so he has to cease and desist both activities and you will make sure thats done. He made explained to me that there are policies in place to be certain that his examiners are abiding by the policies. That is the banks that we supervise in the examiners in examining them do not. If at some time you find this is still continuing, will you confront him about that . If that is happening in the banks you oversee, will you confront him about that . Will you stop him from doing that if you see it . I will continue to discuss with him this issue to make sure that our policies all right. With regard to another issue we discussed one of the concerns that i have especially with insured and assets as we are designated, there doesnt seem to be a way for them to be not designated. There is no path thats written out. Obviously you can say they need to change their Business Model but i think it would be helpful whenever there designated, to say whenever you do this this and this, these are problems that can cause you not to be designated. I really dont see any path for that to happen. Can you elaborate . They review they review every single year the designations of firms and considers whether or not they are appropriate or no longer appropriate. Firms that are designated are given very detailed materials to enable them to understand the basis for the designation. I would just encourage you, every year, to be sure to put something in there so there is certainty on the part of the folks that are designated. I have 30 seconds left so let me get one more question and with regard to the boards charge of it adopting capital concerns for insurers. This is important and that this is the first time the fed ever got involved with Insurance Company capital standards. Would you commit commit to us or prioritize adult mastic capital prioritizing any of those would not become effective in the u. S. Thats my concern. We want to make sure that the domestic Insurance Industry is protected. Thank you mr. Chairman and welcome back chair woman yelling. You were quoted in a june 17 american bankers article as stating that the Federal Reserve was examining ways to improve its implementation of the Community Reinvestment act amid concerns that regulators are letting too many poor communities go unserved by banks. How would the Federal Reserve effort seeking to improve implementation of the Community Reinvestment act encourage advancements in places like the ones that i represent such as ferguson missouri and other communities throughout this country that are in poverty . Weve been working to improve implementation of the cr regulations with other banking regulators, and weve been doing that in part by trying to improve our guidance, adding questions and answers on the reinvestment, and do we came out with additional cue and day in 2013 and and we are working toward our further additions. So what this guidance does is help to meet the needs of low and moderate income folks. By doing that i hope what we will be doing is encouraging banks to consider providing the kinds of Banking Services that people in these communities need to be an important part of their program. Along those same lines of questions, you stated in your testimony your concern about the limited availability of Mortgage Loans. As a supporter of dodd frank, has the law given us unintended consequences and tap down banks ability to lend money in order for people to get Mortgage Loans . So its hard to say. I mean certainly lending standards are much tighter than they were in the time up to the financial crisis. I i think most of us think appropriately so we dont want to go back to those standards but the steps weve taken may be having some unintended consequences. We may need to work on that to make sure that credit is available. So do we need to tweak the law in order to allow banks to really get money out and into our economy and allow people to realize the American Dream and purchase homes . There are a number of obstacles that banks seek in terms of lending. There are matters that they are working on with fannie and freddie. There remains uncertainty about securitization and rules around securitization and weve not really seen an active market comeback for private residential mortgagebacked securities and that could be part of whats happening. The Federal Reserve released a report titled strategies for improving the u. S. Payment system. A followup to a 2013 consultation paper that signaled its intention to expand its presence in electronic payments. Why has the fed embarked on this Faster Payment Initiative and what does it hope to achieve and what is the Federal Reserves plan . Our basic plan is th