And we want to look at both things and not take away any simple morals. Peter barns, fox business. I wanted to check in with you again on whether or not you see or have concerns about bubbles particularly the financial market, debt and equity market. And i want to refer to the monetary report where you said overall equit leo are higher than the normal levels but in some sectors they are stretched relative to norms. In the same report last year in july the report specifically mentioned bio tech and social media stocks as being substantiatesub substantially stress. Do you feel that way still . Can you comment on the bubbles . Janet i dont want to comment on those specific sectors. Overall evaluations are on the high side but not outside of historical ranges. In some corporate debt markets we do see evidence of unusually low spreads and that is what was referred to in the report. More broadly, we do try to assess potential threats to Financial Stability and in addition to looking at asset evaluations we look at measures of credit growth of the extent of leverage being used in the economy and the Financial Sector and the extent of matureity transformation and taking into account a broad range of metrics that bear on stability and the overall assessment is the threats are moderate. Jen from politico. I want to switch gears and ask about some of the tension between fed and congress lately. It was some lawmakers calling for more transparency and accountability measures. I wanted to ask what degree there might be room for the fed to consider some of these measures like maybe a rules based approach like the taylor rule or a measure that would change up who has a voting seat on the fomc. To what degree does it make it more difficult to accomplish your mission . Janet so i believe the Federal Reserve is one of the most transparent central blanks around the globe. We provide emense amounts of information, both financially about our balance seat and Monetary Policy sheet operations. We have financial statements, we publish our Balance Sheet over week, if you want to know what the portfolio it is listed and i have press conferences and we issue minutes, we have statements that we release right after meetings and transcripts within five years. So if you put all of that together we are a transparent central bank. With respect to congressional changes that are under consideration that would politicize Monetary Policy by bringing congress into make policy judgments about, in real time on Monetary Policy decisions. Congress itself decided in 1978 that that was a bad thing to do. That it would lead to poor Economic Performance and they carved out this one area of policy reviews of Monetary PolicyDecision Making from goa audits. They look at everything that goes on within the feds and i think that is a central bank best practices. The Global Experience shows giving Central Banks independence to make Monetary Policy decisions they think are in the best interest of the country and consistent with mandates leads to lower inflation and more stable outcomes. I feel strongly about that but they are accountable to congress. Of course we are ready to provide information that Congress Needs to evaluate the feds Decision Making in Monetary Policy and elsewhere. With respect to Monetary Policy rules they can be useful and i find them useful in long half as a kind of bench mark for thinking about what might be the appropriate stance of policy. But to change the central bank to follow a central mathematical rule that fails to take into account many things that are very important in making Monetary Policy. For example, i was earlier asked about being against the zero lower bound which is an important special consideration and that would be a foolish thing to do and i oppose it. With respect to proposals having to do with voting and the structure of the feds that you mentioned a lot of ideas have been mentioned. I would say for my part, i think the Federal Reserve works well. The system we have was put into place by congress decades ago. I dont think it is a system that is broken. Of Course Congress can revisit the decisions it mate about the structure of the fed made there were good reasons for making the decisions that were made about how the structure voting and other things. And i dont think it is the system that is broken. I think it is working well. So i dont see a need for changes but of course it is up to congress to review that. I was wondering whether you could quantify the effect the stronger dollar had on economic output and the extent it acted as its own rate increase and what obligation you feel if any, to make life easier for the bank of japan and many emerging markets that are struggling with issues we have not struggled with not too long ago. Janet with the respect of the u. S. Dollar on the economy i dont have a quantitative estimate to offer you. But i expect net experts to serve as a notable drag on the outlook. But remember we have to put that in context. There are a lot of things that affect the u. S. Outlook and while that is serving as a drag on Economic Growth overall the committee continues to see sufficient strength particularly in private spending that we are expecting above trend growth even so. With respect to our neighbors, we look very carefully at what is happening in the global environment. We realize our own policies affect performance in the rest of the world. And that performance in other countries has an influence on us so we spend a good deal of time discussing global developments. It is important to keep our own house in order, to put in place the policy that is consistent with the objectives that congress has given us. And i think a strong u. S. Economy certainly is something that is good for other countries as well. We have pledged to communicate as cleary as we can about Monetary Policy and i am trying to do that and will continue to do so. Nancy with market place. We talked about the risk of tightening too early. What about the risk of waiting too long . Especially since it can take a while for fed actions to work their way through the economy. Janet i agree with that. Many, many studies over decades have shown there are lags in the way Monetary Policy affects the economy. And therefore Monetary Policy does have to be forward looking. That is why we spend so much time preparing forecast is discussing them. We want to put in place a policy that will be appropriate for where the economy is heading. That is a reason that you know many of my colleagues, most of them, are anticipating it will be appropriate to tighten policy sometime this year in spite of the fact they are projecting that inflation will be low. They are looking forward and they see that by the end of 2016 or 2017 with the labor market recovering and assuming that Inflation Expectations remain stable and influences are no longer affecting inflation they see it headed back to the 2 objective. Just as we dont want to be premature in tightening policy and aborting a recovery we have worked long and hard to proceed as far as it has we also dont want to be behind the curve in the need to tighten given those lags. Madam chair, i would like to preface this by saying i believe we stand for accountability. Recently a bunch of us were in the room and there was a Police Officer outside and the staff took the cellphone and controlled the internet in the room to regard the safety of the fomc statements. If one leaked it we would lose our jobs there would be a prosecution and our fans in the press would have a banner day. There was a leak in the fomc. We dont know what happened. I have asked. I cannot get an answer and now congress is asking. Both parties want to happen. I am not asking about the igs probe. I understand that is an active case suddenly after two years of just sitting there. But i would like to ask what you found at the board. You were not chairman there but vice chairman. What answers do you have and will you respond to congress . Janet let me say the committee and i take it serious the responsibility to safeguard private information. We have a set of policy and procedures that are in place that wiretapping to follow if we believe there have been leaks of confidential information and this is something that doesnt occur very often but if it does occur we follow those procedures. It has been reported that our Inspector General is engaged in a review at this time of this matter. And in light of that ongoing review i am not going to get into details but let me just say that we welcome that review and are looking forward to its conclusions with respect to Congress Congressional inquiry and we will brief them and provide them with the information they seek as best as we can. Madam chair, thank you for taking my question. The Banking Sector has clearly improved since the crisis in terms of capital retention, but there is also seemingly a number of scandals involving fourx manipulation and lie borg. Do you think the culture at the banks is where it should be . If not what will the feds to do to improve it and when . Janet well it certainly has been disappointed to see what have been some brazen violations of the law. And we absolutely expect the banks we supervise to comply with the law and to have in place controlled and ensure compliance and organizations. And while changing the culture of the organization is not something we can achieve through super supervision we will make sure the banks we supervise have regimes in place and to the extent compersonsation schemes might be enforcing the behavior and reward risk taking and that is something we will look for in our supervision as well. [inaudible question] you introduced a compensation roll in 2011. When do you think we will see movement on that rule . Janet the agencies are working jointly to bring out a rule on this but we have supervisor policies in place carping concerning the structure of incentive pay and comp compensation and we have seen meaningful changes already in the structure of compensation and banking organizations to diminish ways in which it might incent risk taking. I guess i have two followups. One sin regard to craigs is in question. Before the igs investigation recording to the Republican Congressmens letter to your office. He said the federal counsel was initially involved but it was dropped at the members of the f1c. Who the are members of the fmc that struck down the investigation and doesnt not revealing the facts go against the transparency and accountability you are trying to bring to the central bank . Janet that is an allegation i dont believe has any bases in fact. I am not going to go into the details but i dont know where that piece of information could have possibly come from. I think when you get asked about financial crimes and the public hears you talk about compliance you get a sense there is not enough enforcement involved in the actions and it is merely a case of trying to achieve settlements after the fact. Is there a sense of the Regulatory Community that financial crimes need to be punished more forcefully for them to be a deterrent . Janet the focus of the banking regulators is safety and soundness. And what we want to see is changes made as rapidly as possible that will eliminate practices that are unsafe and unsound. We cant only the Justice Department can bring criminal action. And they have taken up cases where they think that is appropriate. In some situations when we are able to identify individuals who are responsible for misdeeds we can put in place prohibitions that bar them from participating in banking and we have done so and will continue to do so. Steve beckner of mmi. Good afternoon, madam chair. The fomc said last september that they will wait until after the first rate hike to stop or discontinue reinvesting procedures in bf holdings and stop rolling over the treasuries. What is the fomcs current thinking about how long after lift off you should wait to stop reinvestments and rollovers. And given the large amount of treasury matureu maturing next were would it make sense to vary the pace of the runoff it allows. Janet we issued a set of normalization principles in september. And as you noted the committee indicated we will eventually stop reinfestment or diminish the pace of reinvestments as a way of gradually reducing the size of the portfolio over time. We said we would do that come Economic Conditions were appropriate after we begin raising rates because we want changes in the target range for the federal funds rate to be the main tool by which we shift the stance of Monetary Policy. We have not made any decision at this point about how long it will be once we begin to raise rates before we reduce or seize ryin reinvestment and we will see how it goes and revisit and make a decision at at a later time. You indicated we have a substantial amount of quantities that will roll over the Balance Sheet over the next years and that is true. I think over the next two years 800 billion will mature and they will be shortterm obviously at that point and that is a way in which we anticipate diminishing the size of our portfolio. Some people have suggested that you might need to manage those runoffs a little more granularly if that is a word and perhaps pursue a different tract for treasuries or given quarters when you have a large amount maturing and there might be a spike in longterm Interest Rates and maybe you would vary the rate of runoff. Any consideration given to that . Janet that is something for which we have made no plans. I dont really have anything for you on that. Greg rob from market watch. We hear that productivity takes a long time before you can understand it. But it has been low in this cycle. What does that mean for fed policy . Janet a agree it has been disappointingly low. An aspect of what is a disappointment is that the labor market improved more rapidly than might have been expected given the pace of Economic Growth. So the Unemployment Rate has come down more rapidly than i would have expected and the labor market is improving more rapidly than i would have expected. We have written down our estimates of potential output. In the long run it is disappointing and a factor about the ultimate prospects of the u. S. Economy if it continues. I would expected it to pickup and from the longer run growth projections most fomc participants believe it will pickup above current levels but it means it is something, if it persist, with hard Living Standards and would like retard real wage growth improvement and Living Standards for households. Peter coke with bloomburg television. One clarification and then a question about congress. First of all you have been asked this before. When you decide to start raising Interest Rates could that happen at a meeting in which it is not falloyed by janet let me reiterate this and this is a live meeting at which we could just make a decision. Clearly, if we decided for the first time to raise the federal funds rate it is something that i think it would be appropriate to answer questions and explain in more detail. We would expect to use if it were necessary. On the second part of your question with respect to testimony, you know it is very important for the Federal Reserve to be accountable to congress. We have a wide range of responsibilities and it is entirely appropriate for me to testify and be quizzed on a range of topics by members of congress. You know i think i need to be ready to answer questions on any aspect of Federal Reserve behavior and that is an important principle. Coming up president obama discusses the economy and manufacturing at a town hall meeting in cleveland followed by a Senate Commerce meeting examining the fccs new policy and then another chance to see the remarks by the Federal Reserves chair janet yellen. Coming up, the president s request for military force against sis and we sit down with the House Armed ServiceCommittee Member larson of wasserman. And then Chris Stewart will discuss the obama negotiations are iran. Plus your calls, tweets and emails starting at 7 a. M. On cspan. This weekend we partner to learn about the history and lit literary life of columbus. This is an iran clad built here. The oval shapes are the gun ports of the jackson. It is armed with six brook rifles. The particular rifle that is firing today is one of the guns built specifically for the jackson. It was cast at the selma naval works in selma, alabama and completed in january of 1965. This is connect today the era and there are only four iran clads from the civil war we can study right now and the jackson is right here and this is why this facility is here. It is here to tell the story of this particular iron clad and showing people there are more than just one or two iron clads but many. Watch the events from columbus on saturday on cspan2 and on sunday afternoon on cspan3. Mitch mcconnell said the chamber is not going to vote on the nomination of lynch to be the next attorney general until they complete the sex trafficking bill. Dick durbin expressed frustration during