rising costs to just live today? >> inflation is too high we understand that we are working on it, but we will get it back under control we are seeing it everywhere in the world. we are seeing it more in the united states because our economy is stronger, but we are seeing it everywhere in the world. >> let me follow up on a few questions my colleagues asked you about. you were asked about the next meeting and your plans for the next fed meeting i think you eloquently laid it out much you also talked about the situation that developed in russia and ukraine my inference to your answer was if russia had not invaded you a crane, that the fed would be more aggressive with the balance sheet and rate hike. >> i think that remains to be seen it would be my expectation in

two weeks with a rate increase we will make plans to shrink the balance. i am confident we will the question of when we will implement that plan is not answered yet i don't think that's clear yet that's something we can't answer now. >> mr. garcia referenced the president's state of the union remarks last night the president, when talking about inflation, said we need to control costs. did you hear him say that? >> i did not i was too busy getting ready for this hearing i didn't watch >> i won't tell the president. when the president said he wants to control costs or that businesses should control costs to address inflation, would you have any idea what he's talking about? >> i really can't comment. in follow-up to my questions from congresswoman wagner, she asked about cyber.

i know prepandemic, preinvasion, one thing you talked about that kept you up at night was cyber tech if russia were to weretaliate against the united states in some form of cyber attack, what confidence do you have in our nation's banks for a cyber attack from russia >> what i can tell you is everything we can do to protect ourselves against cyber, we're doing it we are doing it, the private large financial institutions are doing it and have been for sometime it's very hard to say what's possible to happen, but we are certainly on high alert and will continue to be >> thank you very much the gentleman's time has expired. >> the gentleman from new york

is now recognized for five minutes. >> thank you thank you very much chair lady waters for your leadership and calling this hearing at a time we are still recovering economically from the covid pandemic and facing challenges at home and now in ukraine, i think and feel deeply that the fed should not be subjected to stunts in the senate with boycotts by the republicans and the senate should consider the fed board nominations as soon as possible. president biden has put forward qualified nominees and we need to get this done that's my main point much with that said, as you and i have discussed in the past, the economic recovery has not been even and we still have a wayses

to go to ensure. the black unemployment rate remains at 7%, more than double the white unemployment rate. we will be looking at the depth of the pandemic's impact for child care providers and the result that has on our families and economy. i want to ask you about the monetary policy report the fed released friday. it notes the participation rate remains well below estimates of its longer run trend as a result of retirement and people out of the labor force in caregiving activities what does this drop in labor force participation mean for the u.s. economy and what does it mean for those workers who leave the workforce to care for their

children or family members >> having a lower labor partition rate, it's about 1% less than it was, it reflects a lot of retirements it means our labor force is short and and contributing to shortages all across the country. if we had a few more people working, we wouldn't be feeling that quite somuch. it also means the potential output of the country is lower many people not in the labor force are retirees who made a choice, but some of them are still people who want to come back, but perhaps can't because of child care activities or fear of covid or other factors much in any case, the decline in labor force participation that we have seen has been much larger than that of other

comparable nations it was not something we expected and is something contributing to wage inflation and actual inflation and to the labor shortage that we are currently seeing >> thank you if it's been announced as a result of the ukraine war and other disagreements that russia and china are now moving to trade completely in their currency, no longer using the dollar and pakistan is flown in to meet with russia and there is some part they may be part of it. what effect would that have if china and russia no longer use the dollar in certain block trades around the world and with iech -- each other what effect would that have on the economy. >> we are the main reserve currency for the world that's because we have open

capital accounts and the rule of law and have inflation over a long period of time under control so that the dollar preserves its value. so our markets are the most liquid and it's the place most people want to be. over time, the question is if some want to move away from the dollar, what will be the effect on us. i think it's something you would feel over time they would have to create an economic eco system where another currency becomes a better currency for them to use. what we can do is make the dollar the most attractive currency by continuing to have the rule of law and open capital accounts and make it an attractive place for people to invest and use in their businesses there wouldn't be any short-term effect on that

over time i suppose it would diminish our status as the reserve currency it is possible to have more than one large reserve currency there have been times when that was the case so it's not really clear >> thank you my time has expired. i yield back >> the gentleman from oklahoma, mrs. -- mr. lucas is recognized. >> as putin and ukraine has gone on, we have responded in a unified voice. can you indicate what the implications will be of locking russia out of s.w.i.f.t. >> on sanctions we are not the right folks to ask we don't design them or

implement them >> let me word it this way how sweeping do you see the ripple effects through the u.s. financial system is there an effect on us as those actions take place >> with big actions like this there may be unintended and unexpected effects hard to say what those might be. in the economics we are seeing concerns over palladium and neon and corn and wheat, shortages of those potentially. it would be difficult to say exactly what the effects could be over time the united states, our financial institutions and economy do not have large interaction with the russian economy. it is a relatively small thing and has gotten smaller and

smaller in recent years. there wouldn't be direct effects on the u.s. economy. hard to think what the second order might be >> thank you the price of oil has continued to climb we now see international banks appropriately shunning russian oil even without sanctions can you describe the range feds project and how do you see this impacting the rampant inflation issues >> obviously, the price of oil depends on events that haven't occurred yet it depends on where this goes going forward. we have seen prices move up, including just in the last couple days. they moved up quite substantially since -- you go back three months before this incident began, prices are up quite a bit much

the effects will be passed into gas prices and headline inflation. the larger the increase, the larger the effect. but that's a price level change. is that going to lead to repeated inflation increases at that time? that is not necessarily the case and we would use our tools to make sure that's not the case. >> representing the constituency i do which is oil and gas and production agriculture, we take note how that will affect world crude prices and ukraine being a major grain producer, my people are prepared to step up and match that but it underscores i suppose the increase of energy production in the united states.

that's more of an editorial on my part, but i note that we stand ready in this country to replace resources that may not be available or affordable for the rest of the world. we just need a little incentive and encouragement from this side of the room to utilize those things so my last question i have in the time remaining, the economy is operating in what we describe as economic uncertainty. when you deal with supply chain issues and covid issues, hopefully we are in the final stage. can you elaborate on how critical it is for the health of the economic system to be reliable and maintain liquid markets so we can navigate what lies ahead of us >> yes i would say our markets have been functions well. there is a great deal of liquidity. we have between our swap lines

and repo facility for central banks and our facility in the treasury market, we have institutio institutionalized liquidity. >> thank you i yield back >> from new york, ms. galasqaz is now recognized. >> thank you for being here today, chairman powell given what you said about the upcoming meeting in march and the illegal invasion of ukraine, how is the fed coordinating with other banks around the world in considering adjustment to interest rate policy here at

home >> we are in on going contact it's fire say, with our major central bank colleagues. actually, we have a meeting of all of them on monday morning. it's a virtual meeting at 7:00 a.m. monday. it's something that we do regularly. that said, we conduct monetary policy to achieve domestic objectives specifically, here in the united states price stability. the foreign events are very much top of mind right now. it's enormously helpful to understand the perspectives, particularity of the europeans who are so much closer to what is going on. that's an important channel. >> chair powell, last woke the fed published its 2022 small business credit survey among other things the report

found that small business applicants that used online lenders for their financing needs reported more challenges with their lenders than did applicants of other sources. the top challenges from online lenders were high interest rates and unfavorable repayment terms. can you explain the report's finding and what it could mean for small businesses who utilize online lenders to satisfy their financing needs? >> if i recall that survey, it had interesting questions and there were differences in data gathering so it is not clear the two surveys were comparable. we will come back to your office on that.

>> it raises interesting question where we through legislation could provide some relief and regulation so that small businesses are not shortchanged when it comes to the most important element for any small business, access to affordable capital chair powell, during public remarks, acting controller of currency stated in the not too distance distance future, there will be a joint notice of proposed rule making to update the investment act. does the fed believe a joint npr is possible and when do you expect it to be released >> yes, we do. we think that will be ideal and working with the occ and fdic to come up with consensus of

proposed rule making reflecting all of the comments we got on our advanced notice of rule making i think the timing is soon i wouldn't want to put a specific date, but i know we are going back and forth and it feels like we are getting very close. >> a note published by a credit swiss strategist over the weekend warned that excluding certain banks from the s.w.i.f.t. system, which i support, could result in overdraft which could have consequences which would for the central bank to intervene on missed payments. do you see this scenario as likely >> no, i don't see that as likely we always look at different risk

exposures. but given the existing tools we have to provide liquidity, i don't see that as a likely outcome. >> thank you i yield back >> the gentleman from texas, mr. sessions is recognized for five minutes >> madam chairman, thank you very much. chairman powell, thank you for joining us today the monetary policy report of february 25 seemingly still hot off the press brings about i think a good review of the feds' an analysis of where we are. i know there is temptation by members of congress to hold you accountable for things not within your purview. but on page three you talk about

special topics page three of your february 25th, 2022 monetary report low labor supply next it goes to several other issues then supply bottlenecks. as a member of congress from texas, both of these are highlighted to me on a daily basis as i received feedback this is inflationary also. we have taken a bit of time with you to probe with you your ideas that i think you have professionally handled on behalf of yourself and the fed, the issues related to energy but the bottom line is, we can't get people back at work. we find that turns into a low labor supply, and then we have got bottlenecks.

these are all hand in hand, glove in glove together in my opinion. i took a few minutes to look at the labor unions and schools, teachers unions. but let's move to the federal government where is the federal government on their employees coming back to work on opm >> i don't know. we are doing our own process we are in the beginning. >> if they don't come to work, others don't come to work. i think your point and my point is well made i believe what we need is your your robustness within the administration to actually let them know that for this report

monetary policy to be correct, that you believe inflation is a short-term, meaningful hindrance on our economy they are going to have to make, meaning the white house, policy. they are going to have to understand what caused this. i think this administration, the democratic party, this congress, has made friends with inflation to encourage it. if your prognostication is goings to come forth that we end this inflation, we are going to have to have serious changes because right now in texas, which has been relatively open, i don't see relief on the horizon. and i think this administration, this congress has to lot to do with it. without chastising it, i meant to help you. i would like your voice administration, within the halls of congress, perhaps doors that

are shut, for them to understand they have made friends with and are continuing inflation, whether it be with teachers unions or opm. we have to get serious about getting people back to work. as you tap down the amount of money that is put in the economy, as that moves, it has to correspondingly have people that come to work that pay taxes, that move the economy gdp is a term we used earlier today. it's shifting this big, massive task so you've almost got a whole 30 seconds left, but i'd like you, without defending yourself, to say to you, i'd like for your voice of reason, of prosperity,

of future to come true as you'd like i am going to support you. i am for you how can we help you? >> i do think -- honestly, we have the tools and we have to use them we will use them to get inflation under control. but to the extent we get help from the supply side, it will make that job so much easier it's about labor force supply, about supply constraints and shortages and that kind of thing. it's also about things like a war which will drive up the prices of oil and gas. we will make sure it doesn't provoke a cycle of inflation >> this is what happened when you rely on other people for your food and energy >> you can ask your friends on the senate side to confirm

you are recognized for five minutes. >> how are you >> i am fine how are you, mr. scott >> i want to sound the alarm, and i want you to listen to me, and i want the nation to because i am the chairman of our house agriculture committee and i'm very worried about this turmoil over in ukraine and russia's violent, illegal and criminal action and the impact this has on global trade and our own food security we could very well be on the verge of a hunger crisis all over this world. i want to share with you some

research, and the nation so we can understand what this ukraine/russia situation is causing. today russia alone is producing more than 2/3 of the 20 million metric tons of fertilizer used to grow corn and wheat around the world. one country producing 66% of the fertilizer needed. when you combine ukraine and russia, these are the two largest exporters of wheat, corn and barley, producing a quarter of the world's wheat in these

two countries, making this impact a crisis of soaring mag teed -- magnitude when you have this much and these two countries are warring with each other. i want to sound the alarm on this i want to ask you this question. i want to ask you, the disruptions and rising prices from these commodities, will destabilize global food markets and threaten our food stability and social stability so my question to you, chairman powell, to what extent could these developments create financial stability risk here at home and abroad. and what must we do?

we can go without a lot of things in this world, but the one thing we cannot go without is food. when you have this much power on our food security for the world in the hands of these two countries warring with each other at this time, what can you do about it? >> sir, i think your point is very well taken. it's shipping, corn, wheat, fertilizer we see that getting into food prices and the food supply after these sanctions were placed less than two weeks ago i don't have the tools to address this this is a matter for congress

and the administration i think you are right to call attention to it. i do think this is understood and understood that help will be needed here. >> i just want to say that we cannot allow the world to get into this desperate situation. i am giving this as sort of a paul reviere moment here i am not saying the british are coming, but i am saying the russians are already at the door and could cause worldwide hunger and i hope that free nations around the world can come together and realize that this is not just ukraine's fight. it's our fight

we have got to win this fight. hopefully we can get more of our nations come together and end this situation in ukraine and russia before it causes truly a worldwide war. >> thank you very much the gentleman from florida, mr. posey, is now recognized for five minutes >> thank you, chair woman waters >> when your former deputy came before the committee last may, i pointed out that just a week before the april inflation rate was reported at 4.2%, the highest since 2009, the rate in march of 2021 had been only 2.6% i asked him if we were paying the price for mon adveetizing ae

federal debt what was called helicopter money. i was told he didn't believe the federal reserve was causing that does the fed continue to deny that it was monetizing the debt? now it's the 7.5%, the highest rate since 1992. >> i think monetizing the debt, what that means is for the central bank to purchase the debt with the intention of holding it that's not the intention we are about to start shrinking the balance sheet and will return it to a size relative to our economy that it was before

that is not our intention. we purchase longer term securities in order to drive down interest rates to support economic activity. i would also say that's not really what we think of as the source of inflation, admitting that inflation, proclaiming that inflation is far too high and that we are committed to using our tools to get it back down, it's really about very, very high demand, particularly in the goods sector related to a spending shift that happened in the pandemic and supply constraints that we didn't foresee. low labor force participation, it's a different kind of inflation than we have had in the past, but it's one we have to deal with and we will deal with it.

>> when you appeared before this committee in march of last year and i asked you to clarify the purpose of federal reserve in collecting data for climate change you said they would be collecting information to help warn about climate risk and wouldn't be using it for regulatory purposes. in recent weeks there has been controversy in the process to fill four seats. one is advocating for aggressive regulation related to climate change including getting away from fossil fuels. i would ask you to comment on the confirmation process can you assure us that the climate date that will be used for regulatory purposes and

driving away from traditional regularity purposes here >> we are just building the capability to do this. the idea is not to use them the way we used the stress test to set capital levels the idea is to allow financial institutions and regulators to understand better the extent to which and the ways to which climate risk has any implication to the banks i would add it is not our job to tell, we don't think, to tell banks which legal companies they can and can't lend to. i don't see that as an appropriate role for us much. >> i am really glad to hear that that's absolute unequivocal guarantee answer, that the data will not be used for regulatory

purposes in any way whatsoever >> i can just say we are not even doing the test yet, scenarios yet, but certainly that's not going to be the construct much the construct will be what i said, which is to help us understand better, not to set capital or otherwise put further regulatory requirements on >> thank you so much i appreciate that and yield back >> the gentleman from colorado, mr. pe perlmutter, is recognized. >> i want to thank you you have been picked on on

inflation. i want to start with your chart one. i love your charts chart one shows a tremendous growth in employment as does chart two shows a tremendous drop in unem kploimt -- unemployment. it's dropped do you think it has dropped because of that? >> yes >> two years ago we were going to a pandemic. you and i talked about the potential of a worldwide recession of a magnitude we had never seen did we get that recession? >> no, we didn't >> you may recall i am a bankruptcy lawyer. so i look at things with a

pessimist eye. did we have those? did we have the bankruptcies we thought we might get >> we sure didn't. >> do you have any idea how much the gross domestic product has grown in the last year >> i want to say 5 point something percent. sniet >> it's more than that i think it's page 23, chart 14 it went from 2020 to now, it went from less than 17.5 trillion up to 20 trillion so it's substantial, about 15% now i don't think it's that much, but it's substantial did we expect that when we went into covid >> you mean since the trough i was just giving you the last year as you know, we were looking at

some bad scenarios and hoping they wouldn't happen in the first half of 2020 >> now the fed took some pretty dramatic actions as did central banks around the world, did it not? >> yes >> and congress, led by the democrats, took some dramatic steps, like the cares act to help us get out of recession what i want to talk about is the fact that despite the one flaw that republicans can find, which is inflation, we have lower unepiemployment, a bigger economy. do you know how many other countries have higher inflation

around the world than america? 64, according to trade economic inflation of country by country. 64 this is a worldwide phenomena, is it not? >> yes, it is. >> i want you to take a look at a couple more of your charts i think these are probably the most important they are the median wage growth found in chart c on page 12 and the change in the price index for personal consumption on the next page found on page 13, diagram 8. according to your chart on page 12, the bottom quarter of wage earners have had their wages increased by almost 9% do you see that? >> yes >> and the bottom -- the next quarter by 6.5, 7%

do you see that? >> yes, i do >> then you look over to the next page and we are running, i think you said, about 5, 5.5% inflation. so wage earners in the bottom half are making more money potentially -- they are making 8 or 9% against a 5% increase in cost it's not apples to apples, but wages are going up >> wages in the bottom kwq uuar have gone up i don't believe that's true for the middle quartile. >> my time has expired i will ask it to you later on. thank you for your service, thank you for keeping us out of

rece reception -- recession i yield back >> the gentleman from ohio, mr. davidson is recognized for five minutes >> thank you madam chairwoman. thank you chairman powell. i appreciate your work and book. i want to highlight the heroic work the federal reserve did to create stable markets particularly in march and april of 2020. since then, of course, there have been a lot of economic dis distortions, one of which is the inability of the federal reserve to stabilize its own balance sheet which is now over 9 trillion i appreciate mr. perlmutter highlighted some of the good news you can always turn something good out of lemons there is no good news, but the

concern is in the long-term this has come at the expense of sound money. a year ago i talked to you about sound money. the u.s. dollar is sound money because many of us anticipated inflation was not transitory and that it might have some impact on inflation in light of the fact we have seen substantial change in the rate of inflation now versus what was showing up then, but was anticipated, do you still think the u.s. dollar is sound money? either way, what are the threats to the u.s. dollar as sound money? >> the u.s. dollar is sound money. the threats to the dollar in the near term -- to replace the u.s. dollar as reserve currency, if

that's your question, you would need to be in an attractive place to hold large amounts of reserves >> it is different than that we are probably going to be the reserve currency because the world grades on a curve and the world hasn't had this much debt since world war ii around the world, they have done similar things the era was gold i don't know there is magic in gold, but there is magic in discipline if you look at sound money being an efficient, you have taken some dings on store value. as you have seen people filter actions and develop technology and regulatory frameworks that are intended to be able to filter transactions, it is not as efficient as a means of

exchange or record of account. those kinds of things. not so much do we do okay on the curve, but is it truly sound >> i am not sure i followed the last part. inflation is indisputably too high we are using our tools to bring inflation back down. we will accomplish that task longer term the u.s. dollar is easily the best currency and it's because of what i just said and also because of the rule of law and the fact that we are the incumbent and we -- as long as we observe the rule of law and keep the dollar relatively -- keep inflation low and predictive, it will remain the currency >> historically there have been multiple currencies.

historically when something loses its status of reserve currency, it's because the value is debased we can come up with fancy words like quantitative easing or similar to that but not really the same when the federal reserve balance sheet is growing, it represents the fed as the lender of last resort we are not constrained by the taxes we collect or by the amount of money the world will lend us, we are con trained by congress not spending. what are you going to do, not cover the prolific spending by congress the fed role, stable prices is one component, and the other is full employment. if you think in light of m mr. perlmutter's reference to

the chart, if inflation trends the right way and as you ling to the next thing as a regulator, what can the fed do and what does congress need to do to strike those balances? >> relative to esg >> and full employment >> full employment, most members think we are at labor market conditions consistent with maximum employment >> with 64% labor participation? >> the maximum employment can never be higher than is consistent with price stability. i think we are at that level >> the time has expired. >> and you are now recognized for five minutes >> thank you, madam chair. i would like to add to your list of triumphs.

i think when you try to preserve the economic recovery, you have a strong mandate, but keep an eye on that one, too much do you remember the misery index? >> i do. >> when unemployment drops from 14% to 4%, so dropped by about 10% and then the inflation goes from 2% to 7% so up by 5%. does that mean the misery index has increased or decreased >> it has decreased. >> you mentioned repeatedly that the inflation problem is largely one of goods and not so much one of demand, and also labor shortage can you make any rough estimate of what fraction of the inflation we are saying was due to those three effects >> i should be clear inflation is also too high in the service sector

i wouldn't want to oversell that but the real big change has been in goods which had negative inflation or close to zero inflation for 25 years i don't have off the top of my head the ability to tell you the contribution of that it's big it's a significant part of it. a lot of it also is energy >> which is a worldwide problem. >> yes >> if you could get back to something more quantitative. i am interested in knowing your estimate in terms of labor shortage back in the days when we had a different summit, they passed immigration reform which was blocked by republicans many studiees indicated it huge for the economy. is there anything you could think of that would invalidate those studies that showed that

comprehensive immigration reform in both the low skill and high skill sectors would be a huge plus >> if i could answer it this way, if you look back at the trend five years ago in that range of immigration, legal immigration, people coming in, and look where we are now. we are now several million people, many of who would be in the workforce, short of that lower immigration is part of the story of the labor shortage. that's what i would say. >> is there anything quantitative you could say about the time scale for unwinding the balance sheet? do you think of this in terms of a fixed time scale that we want to go back to normal in the next two or three years or do we want to take it down by one% a month or do you anticipate some sort of feedback loop where we look

at the taper tantrums. >> we set a cap on the am tount that will run off. anything above that gets adjusted we haven't had that discussion at the committee, but we will have it in two weeks i guess it takes -- it turns out that the level of the cap doesn't matter that much for how long it takes. something in the range of three years to get back to where you're trying to get to. the way we define that, we look at the size of the economy, the size of the banking system and ask what is the level of reserves we will need at that point. so we set a course for that place, and then as we arrive, start to get close to it, we might slow down a little bit as though it were an airplane and that's the way it would work but i think something in the

range of three years to get back to what the balance sheet needs to be which is reflective of the public's demand for our liability plus what we call ample reserves >> do you have an estimate expln the difference between quantitative easing and monetizing the debt to members of congress? [ laughter ] >> no, sir >> okay. all right. one of the most valuable functions of the fed is to provide emergency assistance to the financial systems of the free world, and you'd mentioned that you stood ready are there specific things you're worried about in eastern europe where the economies are very -- more tightly tied to russia, where you may really have to step in and get involved any specific worries >> what we're watching is sort of -- you know, the global markets and the dollar funding market and we're seeing markets that are functioning and of course, we have tools and we have things in place to deal

with stresses should they emerge that's really what we are doing and as we mentioned markets are functioning so we haven't had to deploy any of those tools. >> thank you my time is i yield back. >> the gentleman from missouri, mr. lukemeyer is recognized for five minutes >> welcome, chairman powell. good to see you again. we're in the middle right here of a really disastrous situation with ukraine, and you know, part of the approach to corralling the russian advance there is on the financial side, and it appears to me that we didn't do this as quickly as we should have and it didn't look like we have a plan. if we wanted to get involved financially we should have said when they move the first battalion or regiment we should have said something, okay, if

you move another one there we'll start doing things to you and we didn't do that until they started to invade and now we're playing catch up that beg the question, we know china is watching all of these actions very carefully and they're looking at what russia does, how we react, how the rest of the world reacts and what they do and we need to be sitting here as a country, as a fed and congressional individuals saying we need to be ready for the chinese when they invade taiwan because i see no reason why they will not do that shortly. so if we don't prepare for that, shame on us. so my question to you is are you beginning to think about what kind of actions you would take or support or suggest to the administration should china take over taiwan because there will be a completely different scenario because of the size of china, the size of the military and the size of taiwan versus

getting into eastern europe and it's a large question and if you'd like to jump into it >> sure. so, i mean, and questions that are with the intelligence agencies and the congressional department and we're interested student was all that and we have our technical expertise that we can contribute -- >> mr. chairman, i listened to you very carefully a while ago and you made the comment that you're looking at making policy for anticipated situations in the coming months in regards to a number of things, what happens with the economy, what happens with inflation so if you're not doing that i understand you may not want to tell me today because that would be helping the chinese who are probably watching this right now. i understand that, but a sort of wink and nod to say we're looking at that that would be nice because it would give us a level of comfort to know that

we're not going to be behind the eight ball again >> as i also mentioned, we do model alternative scenarios of various kind and we have the teal book which is the document we use at the fomc and we run half a dozen of them in great detail and it helps them think about alternatives and i'll leave it at that >> okay. thank you. i'll let you off the hook with that i think sometimes you give way too much credit forit and way too much criticism for it and there are some things outside of your control that happen that basically affect inflation that you have to react to you don't make monetary policy the administration side. you don't make legislative policy for the legislative side and you have to react. i had an economist come in and talk to our committee the other day and i asked him to break down the different causes of inflation, and i said, well let

me identify what are four significant causes and the money supply, the amount of money that's pumped in through fed actions and through our actions as congress, regulations, supply chain/workforce and energy he broke it down like this and he had charts that he was going off and i said just give meet percentages. 40% due to money supply and the money that goes in as a result of fed actions or congressional actions, 20% regulation, 20% supply chain and 20% energy. so if you look at that, and mr. foster goes looking for some answers so hopefully i've asked him with his question. if you look at that, basically, you don't have a lot of control over regulations you don't have a lot of control over supply chain and no control over energy policy and money supply, if the congress gets involved and passes these massive bills you can't control that either. so the amount of control over this is probably in the neighborhood of 20% to 40%, at

best so my concern is that when you say you're trying to help things with inflation, it really balances and it goes back to the administration and to us as congress the administration the first thing it did was stop the pipeline, stopped oil drilling and the prices went up and that right there is 20% it's important that we do that and i'd like for you to comment before we run out of time, if you'd like to comment. >> sure. interesting breakdown. we can continue this discussion. we would have a little different assessment i would just say that we welcome, this is a lot about supply side issues and we welcome any help we can get on that, and we're looking for it -- for help from the improved supply side. >> okay. >> thank you very much, the gentleman's time has expired the gentleman from florida, mr. lawson is now recognized for five minutes

>> welcome, chairman, to the committee. as my question or statement, they say one of the benefits of inflation is that you can live in the more expensive neighborhood without moving. >> that's a good one >> i thought that was very interesting, and i thought i would bring it to your attention. according to the recent analysis with the national community, reinvestment coalition between 2017 and 2021, as many as 7,000 branches across this country one-third was in low income and moderate income communities of color. to what extent is it considering

these banks as they contemplated reform to implement the strength in the community reinvestment act and the importance that banks play for our nearby communities? >> that's a focus that we want to strengthen in our proposal that's out for comment actually, it's now -- we've had the comments and we're getting a notice of proposed rule making out. i do understand the importance of presence in the community and in service to the community and those things do go two our cra assessments. >> okay. mr. powell, according to the latest from goldman sachs and the federal reserve which raised interest rate more than expected this year due to high inflation and labor market approaching full employment, can you speak more on this

should we expect the fed to raise interest rates at all several remaining meeting this year and should we expect the fed's main race to be by the end of this year >> so, yes so the -- the inflation is running well above our target and the labor market is extremely tight and the economy's growing strongly and our policy rate -- we do expect our policy rate up in a series of rate increases this year away from the very low setting that we put into place during the a cued phase of the pandemic and to a more appropriate level given the fast recovery and the strong recovery that the strong recovery has had, given that inflation is rung above our target we do expect it could be

appropriate. we communicated that transparently and clearly and it is our plan to support it. >> i want to make sure the statement was made earlier and i know you've had opportunities with other inflations that we've had. with wages going up and in the lot om half with earning, do you consider that we're in a better situation with inflation that we have now compared to inflation in the past? >> i think that this inflation is substantially higher than anything i've seen since i was in college 50 years ago. so this is strong, high inflation and it's very important that we get on top of it and that's exactly what