off a balance sheet. if the standards of the s cc standard bulletin are adopted, that would be the first time that custody assets are priced on balance sheet do you think it is smart for the u.s. to be imposing bank standards be on internationa norms? >> again, the scc as authority over county rules. we now have to consider that exact question that is what we are doing. i cannot really say more because we are working our way through it my understanding of it is th same as yours, which is custod assets are off balance sheet they always have been. the scc made a different decision as it relates t digital assets for reasons tha explained. now we have to encourage this. >> thank you i encourage just to be considered and i appreciat that you are looking at it and

you are aware of that. i will turn to master accounts now. of course. the board and federal reserv banks have refused to provid congress and the public with transparency with regard to th application process. at its core, a master accoun as a public benefit. it is conferred by the fed to private institution. since a master account is public benefit, the public has a right to know whic institutions have master accounts and which have applie for accounts and not receive them both the fdic and the oc require similar applicatio information on their website today. could you commit as part of transparency project to make publicly available a list of institutions that have receive master accounts, as well as th institutions that have applied

and not received them? >> i will be glad to look into that you know our system well we said the border rules but the reserve bank really make the decisions about th granting accounts subject to those rules. we are trying to improve o that system with the current proposal that we have and ar considering comments on that right now, as i am sure yo know very well >> as you also know, applicant for master accounts are gettin whipsaw between the governor and the banks. one says, the federal reserv says that the banks have all o the authority that they need meaning that federal reserve banks of kansas city and other have all of the authority they need to make these decisions yet, you go to the reserve banks and they say, no, we are

waiting for the board of governors. there is a wig saw effect. we get no answer the black hole continues t exist. my frustration level has lon since been at a boiling poin and continues to be at a boiling point. there is no responsiveness it is a black hole i wish to just, once again, us this opportunity to encourag you to address that. there is no excuse there is no excuse anymore mister chairman. thank you. >> senator of a maryland i recognized >> thank you, mister chairman. welcome, chairman powell i cannot let an opportunity go by without raising the issue o a realtime a payment syste implementation you would agree that if we could get the system into plac it will save millions of americans billions of dollars,

would you not? >> yes, i would. >> that is why i want to encourage you to move it reall quickly. as you know, the system is scheduled to go up next year we had an earlier hearing in may, in this committee erin cline, who spent a lot of time monitoring this system, shared his concern that we wer not moving fast enough to hi the date and fully implement it i just want your commitment, mister chairman, that you ar focused on this and that it is a priority >> very much so. we are very focused on doing i right and on time. that is next year. it especially impacts people who are living paycheck to paycheck, who make a deposit i the bank but it does not clear then they get tagged with al kinds of overcharge fees and things like that other countries that are a lot less advanced in terms o technology, as opposed to th united states, we should figur this out and be there now.

i just want to turn to the issue of the day, which is thi a challenge in navigatin between keeping a strong economy, low unemployment, and dealing with price stability on the good news front, i thin you testified to this earlier, the united states is doing a lot of better than our new are pure economies when it comes t economic growth and quickl reducing unemployment rate is that not the case >> yes, generally. we are further advance than ou recovery, i would say. >> that is good news we want to keep that going we also want to deal with th price increases. the concern which has been shared by others this mornin is that many of those pric increase causes are beyond control. i would call them the three p's, putin's war, pandemic supply change -

supply change interruptions, - >> how do you navigate increases in interest rate when a lot of the drivers of price increases are beyond you control. i want to raise a specific cas study here, which is in th housing market you would agree, would you not that increasing the supply o housing can help produce - reduce housing prices. >> sure. >> but we are seeing now wit rising interest rates, obviously, new investments are more expensive we have seen a housing start t fall by 14% in may that means that if you are housing opportunities, les supply, fewer workers engage in building new homes. if you could use this as a study of how you are going t

navigate these cross currents. >> inter sensitive spending is an important aspect of how our tools work in the case of the housing market, what you are seeing is higher mortgage rates. you are seeing demand move dow significantly. many indicators suggest that fewer people are's vetting homes. the wait time for selling home is increasing sales are moving down. starts are moving down overall, it is a slowing in th housing market i think, what you will see, an what many forecast call for is for this to slow significantly now. we are seeing large increase in housing prices in relatio to the beginning of th pandemic it's to the point where, all over the country, you have people five bids above the ask this second the house comes on

the market this is cooling off to a mor sustainable pace what we hope is that we will get demand, and that part of the economy, too slow to a mor sustainable place. we want to get the mouthing -- the housing market on a more sustainable path where there i a balance between supply and demand >> i appreciate that i want to use the remaining of my time to push you further on this issue, not specifically with housing given the fact that so man other factors that are driving price increase is far beyond our control, you talked about core inflation what is your confidence leve that we will have what i generally referred to as a sof landing. where we do not overcorrect by raising interest rates where i begun -- begins to hurt our economy worker, and wages. what is your level o confidence that we can navigat a soft landing for the economy >> it is our goal. it is going to be very

challenging. it is made significantly mor challenging by the events of the last month, taking int consideration the war an provided these prices an supply chain problems. the question of whether we are able to accomplish that is going to depend, to some extent, on factors that we do no control. >> but this is the point tha many of us are making. the factors that are out o your control are not going t be susceptible to the cost o being brought down of oil an gas, food, by the measures tha you are taking the risk is that the measure you are taking will slow dow other parts of the economy without getting us the benefit of lower prices. i think that is what we ar seeing today i look forward to co continuing our conversatio about how you are going to change this. >> can i say, the other risk i

that we would not managed to establish priced ability and w would allow the high inflation to get entrenched in our economy. we know from history that this will hurt the people we woul like to help, the people in th lower income sector who suffer now from high inflation. it will hurt them more tha anyone we cannot fail on this task. we have to get back to 2 inflation so that we can hel the kind of labor market tha we really want >> i appreciate that, mister chairman as you know, the prices that people are experiencing most vividly day-to-day is the pric of gas at the pump and the price of food at the grocery store, both of which are thing that you said are beyond you control. thank you, mister chairman >> senator dane from montana i recognized >> chairman, thank you it is good to see you here today. like my colleagues, i continue to be deeply concerned with th inflation that we are seeing i the economy and its impact o montana families when i go back home, i hear th

top three concerns from montan is inflation, inflation, inflation. the price of gas, price of groceries. cpi inflation grew 6.8% year over year in may it is the highest increase since december of 1981 in montana, the mountain state as you are aware, inflatio grew by 9.4% versus the year earlier. this rate of inflation i unsustainable for montan people and americans alike for months, four months, republicans, congress, and eve democrats, like former treasur secretary summers, warned abou the massive inflationary ris of the two trillion dollar margin of stimulus package in fact, we pulled up th washington post article from march 29th, 2021

i remember being in a room similar to this one. i remember warning our colleagues about the risks o moving through a two trillio dollar spending package when w had a trillion dollars o unspent covid money in decembe of the prior year. let me quote from th washington post article. it says, summers, secretar treasurer of clinton and advisor to barack obama, a democrat, summer - drafted economic blueprint for the past two presidents and wa a top candidate to lead th federal reserve board unde president obama. emerged as the loudest criti to president biden to revamp the pandemic during the u.s. economy. a harvard university professor advised, and this is key, that the president's stimulus pla may trigger the highes inflation in more than half century and could cost

democrats the chance to make lasting investments in the economy. many are warning the administration it is purely a partisan basi to jam the 2 million dolla package and the inflationary risk associated with it. now, with inflation at a 4 year high, these seem democrat are continuing the ill-advised effort to advise president biden with the build, back broke a package. it is even though the warnin signs are flashing in all of our faces. chairman powell, miss summer has suggested years of greater than 5% unemployment must be necessary to contain inflation do you agree with this assessment >> i would say i do not want t comment on other forecasts generally. my assessment is that it i

going to depend to a like how long with the war wil run and how long will it tak supply chains to improve there is a lot of uncertaint around that. i would have a lot of humility about that and predict with th clarity when the economy i going to be in the next thre years, for example my assessment is that there ar paths to get inflation dow well with outcomes that ar substantially less troubling than what you just read. >> you characterized a sof landing as getting back to 2 inflation while keeping th labor market strong. you are confident that the fed can achieve this goal withou causing a recession. i -- >> that is our goal. that is our intention. it is going to be challenging.

the events of the next few months i've made it more challenging. nonetheless, there are pathway through which this can happe but. what we saw in the early par of 2021 when the inflation wen up is a very strong demand that surged agains unanticipated supply chain -- much more than can be explaine than the increase of demand. if the man can move back dow then inflation can move alon that path just as quickly as i went up in principle no one is guaranteeing that. this is not the same - the relationship for how quickly it can move as opposed to demand moving it is an unusual situation because of what is a vertica

supply curve and what is a ver steep supply curve you can have sharp increases i prices you can get sharp declines for the same reason. that could be a difference i think that we will find out, ideally, what will be th progress on the supply side. our tools and demand work on demand it is getting demand down to a sustainable level so that it can catch up and get in better balance. >> thank you >> thank you, senato james. i'm behalf of the chair. >> thank you, senator tillis mister chairman, welcome back. let me state to the aunt sai you have an extraordinar challenging job and comple times. much of what you are her e responding to and adapting t is beyond your control

year's success is the country' success and is the world's success. i will i love that you have great success and i continue t support this i like you to support, if yo can, what's transmission mechanisms you believe are mos sensitive right now to the change in monetary policy. what forms of consumption yo want to be sensitive to and th extent to which you anticipate on demand through th increasing rates and what they are transmitted through th financial markets and how? >> sorry i would say three basi channels would be spending thi includes a like cars and thing like that it is durable goods housing, for example when rates go up the spendin on those properties which ar fans with that is one majo challenge.

asset prices generally acros the economy, when interest rates go up, it raises the cos of holding assets and can caus you can raise broadly across the economy. it will decline in value it ha a broad effect across th economy on spending and on everything we can also think of the exchange rate as an asse price. this also has the effect o pressing down on inflation we look at all of those, starting with the first one. you can see when we talk about the housing market it is a classic part of th economy. it is very sensitive t interest rates you are going to see a moderation in housing demand you are going to see a decline in housing prices. these are the three main challenges i would point to. let me ask in terms of housing prices and how financial

markets are responding to th financial stance i consistently asked you and the secretary when you appeare on the committee when you talk about systemic risks, risks of stability, risk of financial contagion, where you are movin swiftly an there are institutional traits that can rapidly unwind an instruments that can no longer function well what do you anticipate to be for that and parts of capital markets now or the phenomenon on capital market that present the greatest risk to stability that take congressional actions at stability?

that part of the financial system is critical very strong it is seen through the pandemic we can see it now. to your point, capital markets did show parts of non back quality. this is during the immediate aftermath of the pandemic. we are working with ways tha the regulatory community has been able to address that. >> you remain concerned abou money markets. money markets serve as money well markets are part of the economy where it has become is liquid because the assets they were invested in were not be able to turn into cash quickly to fund deposits or wanting to take their money back. we stepped in and had to provide that liquidity for a second time. there are reforms going on i the fcc which should address that and they're in the proces of being considered an

implemented i was thinking mor the treasury market for example, which became illiquid at the very beginning when people wanted nothing but cash an cash like things the treasury marker has been functioning though, all throug this, period where w significantly change the monetary policy. markets have been functionin well, reasonably well. >> my time is running short. i appreciate that we wil probably follow up to talk about the financial risk with my remaining few seconds, let me ask you this. how would you characterize the share of responsibility on the supply side versus the deman side for the elevated pric levels of the last year? to what extent do you believe, you mentioned the supply curve being steeper than expected, s that increase durable good demands an increased demand ha effect on prices, right now is the principal driver of th

increase in the price leve elevated consumer demand elevated demand? or is supply constraints i know we are facing both, but i'm asking you to allocate a you can sum share to eac phenomenon >> i would just say it's clearly both factors are principally at work here you couldn't get this high inflation without strong deman and you certainly couldn't get it without the kind of suppl issue that we have, had bothin the labor market reflected i high wages and in the good market reflection and what's happened with durable goods. and carson particular, they've been affected by semiconductor shortage >> thank you >> mister chairman thank you chairman pell thank you fo your presence here today let me start by making certain that i tell you something that i think i need to say on behal of - i have never seen the level of anxiety, uncertainty, concer for the future as i see toda

when i have conversations with folks in my neighborhood and across kansas. there is a sense that somethin is not right inflation is a significant components of that feeling and the inability to know what's around the corner is terribl damaging to folks both financially and mentally and psychologically. there is a real circumstance out there that i want you as a chairman and your colleagues t know exists. it is, i think uncertainty wha the future holds was one of th most damaging things, when people try to figure out their lives and how comfortable they are. i also want to highlight a particular kansas but middle america across the country issue fabric ultra i was on a farm on saturda participating in, observing

harvest of wheat we live in a world where peopl are starving and more are goin to starve if we are unable to, if we fail to get more grain into markets from ukraine an russia but from the united states as well agriculture farming is a noble calling it has a lot to do wit being ableto feed people who are now desperate. part of the concern in regar to agriculture is the interest rate have significan consequence to the profitability, to th survivability of producers profit marchers get squeezed i the current interest rates continue to climb, we face declining or lower land values that creates - how can i assure my kansas nun

that things are gonna be bette in america and how ashish how can i assur farmers and ranchers that thei futures will be brighter - >> i take the sort of very low readings that -- in your comments of arkansas has been - i think people haven't seen it you and i are old enough t remember what it was like. it just really does destro public confidence in the economy and that kind of thing we need to get inflation bac down to 2% all i could say is, we are using our tools to do that and the public should believ that we will get inflation bac down to 2% overtime. there are factors. we don't control - things like commodity prices don't don't tend to keep going

up they may remain high but essentially they're quit volatile overtime. that's with the record shows we are doing what we can to ge inflation down, the parts that we can address whatever that's worth, that' what we can do what we will do in terms of the agricultural patch, as you know, we have, including your cancer this - we have some terrific people - who gives a good sense o what's going on in the agricultural sector on a ongoing basis. it's obviously a very very difficult time, with fertilize prices and difficulties gettin all kinds of inputs, it's just a very challenging time in the agricultural world we understand that our part of it is to do what w can to get inflation back unde control. higher interest rates ar painful, but that is the too we have to moderate demand and get demand and supply back int balance so that inflation ca come down >> mister chairman, in

conversation we had on the phone, you indicated as you di today, there are certain aspects of inflation that yo have little control over one of them i think yo mentioned was energy let me be reassured, if yo would, that there are no, that there will not be actions by the federal reserve to mak lending to fossil fuel producers a component of the policies of the federa reserve. when you say you have little t do with, that you could caus great damage if you decide t go down a path that was at least contemplated by number o nominees for the federal reserve board. i would love to be reassured that that is not a component that you would pursue. and that we would not se resulting increasing in cost of fuel as a result of federal policy, federal reserve policy >> in my view, and i think, my

view is certainly as it is not our job to allocate credit t or against or away from an particular sector of the economy. that's the job for elected officials. or for markets it's not a job for the federal reserve, which has a mandate t pursue - price stability, we have all regulated banking system - >> thank you >> talk on behalf of the chair, senator warnock >> thank you very much miste chair. thank you chairman powell fo being here again today georgia is in a serious housin crisis the federal reserve bank o atlanta has designated owning home in atlanta as unaffordabl to the average home buyer. it's not just a city problem wow --

in the midst of this housing crisis, the federal reserve, which has a tough mandate in a tough time of managing inflation -- federal funds rate by zero point -- mortgages are about to get a lot more expensive for families -- what is the fed doing to prevent this rate increase fro furthering that housing crisis >> so, by raising rates, which you're seeing is a slowing has been - you're seeing a slowing becaus of high interest rate, mortgag rates have gone up substantially, and you are seeing a slowing in the housin market one of the things that shoul mean is that housing price should stop going up at such remarkably rapid rates since the beginning of the pandemic, we have had a very

very hot housing market al around the country what's should take place i demand moderating for new an existing homes, you should see prices stop going up quite s fast, and you are also going t see if you are home if you wer home sales and it generally lower rate of activity so, really what needs to happe is that housing supply and demand needs to get back int better enlightenment and the part of that that we can control is really by moderatin demand, so that prices sto going up by so much and that w can get back to a housin market where supply and demand are -- that we don't control supply there are issues in this country around housing supply. it's harder to get land lots and things like that it's harder to get people to

work - there are supply psych inserts if you meet with builder around the country, they wil tell you we have a longer term issue as a country creatin enough housing supply. that is not something th federal reserve can do anythin about. but it is an important issue >> mortgages are clearly, at least in the short-term, about to get more expensive. it seems to me that what would be helpful is if congress whic passes the down payment to equity act so first generation home buyers can afford their first home -- what effect you think interest rates increases might have on, let me put it another way, the federal reserve helps enforc the fair housing act and the equal credit opportunity and. what plans do you have to push to ensure that as interest rates increase, everyone still has access to a fair reasonable price or mortgage >> it doesn't change are ver

important obligations and to the fair credit law. we - will continue to enforce those transparently and aggressively it is true that mortgage rates have gone up and that will slo down demand and there is som pain involved in that four people paying higher mortgag rates also some people will be priced out of the mortgage market, but ultimately that is what we need to happen if we were about to get to price stability where peoples wage are not being eaten up by pric inflation caused i >> guess my point is in th meantime folks that are on the margins of the marketplace i the first place, how do we protect them as much a possible related to that, when secretar yellen was here she stated tha

the federal reserve was needed not only to be skillful bu lucky to ensure both a sof landing. ross - i don't like when the economic safety of georgians, particularly those are at th margins, are at risk that is why have introduced couple of bills to lower the price of gas, lower the cost o groceries and other everyday goods -- and i have held a white hous accountable to pursue an investigation of price gouging and supported by legislation addressing the same issues tha just became law. what steps can congress take t support the fed and it's sure soft landing >> i guess i would be reluctan to give you advice what we are trying to do the job you assigned us and that i

to get inflation back down i think those are authoritie that those of you who run fo elected office hat, and we don't have we are appointees. that's really up to you. >> you would agree that th folks at the margins of th economy are feeling the most pressure and pain? that has to be addressed >> i think that's always the case in the case of inflation, it's really that if you're spending every dollar that you're in taking on the bear essential's of life, and the cost of them goes up 10% you're in trouble right away whereas middle class people an be better off than that, the have some resources, som ability to deal with it. that is why it is such a priority for us to get on to of inflation before it becomes entrenched inflation has only been around now for, it really didn't star until march of last year, so it's not at all too late for u

to get this job done and get back on the path we all want t be on. >> thank you so much i'm concerned about this it is why, in the meantime i've introduced several bill to lower costs for essential items like gas, groceries an medication thank you. >> thank you senator >> on behalf of the chair, senator sinema will join virtually. >> thank you mister chairman thank you chairman powell fo being with us today. congratulations on your recent re-confirmation. the inflation numbers continue to be concerning this is the number one issue i've been hearing about. families and small businesse are paying higher prices they need -- but we also know that this i not only a u.s. problem. countries around the world both big and small, are ofte seeing high inflation. how's the u.s. - relative to other countrie with respect to inflation? >> i would say our level o

inflation is broadly comparabl to other major economies you saw canada release their inflation number today it is not far from where ours. are seeing with the wester european democracies in th united kingdom, but there' different compositions, i woul say generally, to generalize the united states, our inflation has more of a demand driven component, whereas in europe it is more to a greater extent driven by very high energy prices for example. although the united kingdo kind of has a mix of both of those. we also have high energy price here the levels are similar the composition is a little bi different here in the united states >> [inaudible]

>> we are tracking those event very carefully of course not really seeing significan macroeconomic implications so far but i think the principa implication is really what w have been saying and other have been saying for sometime, which is that in this very innovative new space, really there is a need for a better regulatory framework tha treats, the same activit should have the same regulatio matter where it appears. that is not the case right now a lot of the digital finance products are in some ways quit similar to products that hav existed in the banking syste where the capital markets, but it's just are not regulated in the same way we need to do that i think that is the main

takeaway would have. >> what is the appropriate [inaudible russia's illegal invasion of ukraine. how are you thinking about these events in the context of setting monetary policy? >> the increase and commodit prices are clearly connected t the war in ukraine so that part of inflation woul be certainly much lower than i is without the war in ukraine. really, there is nothing our tools, our tools work on deman and there is a job for our tools to do here there is a job to moderate demand so it can be in bette balance with supply. but it would not, we don't think we have the answer t higher oil prices due to the global oil situation >> i know the fed tracks the

core personal -- [inaudible it's possible that the indicators and ways to measure inflation need to be a via a revised -- as americans are experiencin it we all know inflation is high. but a whole height is matter for. sure congress and the feds should make decisions based on the best information, the most accurately reflect the challenge -- have you given thought to this issue? >> yes, in the sense that we look very carefully at the way we measure inflation in this country. we actually use personal consumption expenditures, whic is a little different an better approach than the traditional consumer price index act. this was a change we may 2

years ago. generally, economists thin that - inflation does a better job of measuring inflation the people are actually experiencing in their life -- the government agency that manages to keep it updated on regular basis. so we think that is the righ approach in terms of measuring inflation. of course we look at c p eye a well but we have chosen to make p c inflation or principle measuring stick. >> thank you my time is expired i yield back >> - of new jersey is recognized. >> thank you mister chairman chairman powell, i want to start with the issue o diversity at the fat i have a letter that we sent you yesterday and signed b nine senators, including fiv members of this committee, urging you to undertake

number of simple reforms to th process for selecting bank president and class directors. that process has to includ meaningful transparency in public engagement if we ar ever gonna have fiddle shipped a truly represents the publi as required by the federal reserve act. i will wait for your written response because we have jus sent that letter but for now, can i have your commitment that you will provide us with the substantiv response by july 22nd? >> yes >> thank you >> also, will you commit t work with me to put in place real, meaningful changes to th process so we can have a broader array of voices in leadership >> i'll commit to having a frank discussion with you abou that, and we're open to idea

on how to improve. as you point out in your letter, it's not like we haven't mad tremendous strides as it relates to the pmc directors over the last ten years. we really have that diversity members are impressive for the b and c directors. for the eighth directors - i look forward to it >> it's worse than less so i mean you don't have one bank president in the history of th federal reserve who has been hispanic that's far worse than less so. >> i was talking about director but you're right about that. >> there's a tremendou opportunity and it didn' happen i just continue, you, know i feel like i am the lone effort on this but 62 million hispani americans, representing tw trillion dollars of domestic

purchasing power, deserve seat in where some of the most economic decisions are being made we look forward to the engagement that you said you are willing to engage. and now, in trying to find out as others have raised with you there is no question that high inflation is affecting every family in america. but in order to develop th right response, we need to understand the underlyin factors are driving pric increases. i think you have said here today that russia's invasion o ukraine, pandemic relate supply chain issues are perhaps, and the energy issues that flo from russia's invasion t ukraine, are some of the biggest factors and drivin inflation. but how is it that raising interest rates on thos underlying causes of today's inflation ultimately are going to change it energy is still energy supply chain is still supply

chain. russia's invasion of ukraine i a continuing challenge for the world. but there's nothing abou interest rates the affect an of that. >> no, but notwithstanding that there are major parts o the economy where demand exceeds supply, meaningfully and that is where our tool have a job to do where we ca moderate demand and give suppl time to recover so that supply and demand get back into bette balance and inflation come down >> well, it seems to me that w can all recognize that raising interest rates as a blunt tool at the end of the day. but i am looking, going back t the beginning of my questioning, it's essential i believe to be mindful of the effects tha your actions your meeting with federal reserve, we'll have an unemployment, especially the goods hit hardest by the pandemic the fed's latest monetar

policy report states quote employments for blacks and hispanics not only declined by more than that for whites an asians early in the pandemic but also recovered more quickl since the end of last year now that we are potentiall entering a period of larger an more frequent interest rat increases, what do you expec will happen to the unemploymen rate for black and hispani workers and relative to th population as a whole? >> it would depend on what happens to the overall unemployment rate. our goal is to achieve two placenta they shun while keeping labor market strong. >> i appreciate where what you intention is, but i would be you to say, that what we wil see is what we have seen in th past that crisis after crisis disproportionately harms americans of color so, i hope the feds respond to

inflation does not continu that trend because, it is woefully wron that one group of american disproportionately faces consequences of policy decisions versus the rest of america. this is another reason to have people at the federal reserv who represent this community who share those insights wit as you determine these mask or policies that affect our communities disproportionately >> thank you >> thank you mister chair. >> char paul, a response to question from senator warner and a questionnaire from senator sinema, senator warner more or less stated that we ar all on the same votes in terms of inflation globally. you made the point on tw different occasions that what' arriving inflation, and largel

here, less on the uk, has to d with spiraling interview energy prices. can you talk about beyond th pain of the gas pump, and th increased cost o transportation, how increasing i should say, i believe that this is not for you to comment on, because they moved a littl too aggressively and didn' look at resiliency as anothe energy inputs that were larg effective of the russian invasion can you talk a little bit abou the other commodities that are affected by rising interes rates? we are talking about housing and we know that pipes, th number of inputs to housin construction have gone up. can you talk a little bit more about the market basket of other come commodities that ar influenced by increasing energ prices >> i think energy prices g

into an awful lot of different places in the economy, including as an input into manufacturing goods of all kinds and plastics particularl in things like that. it does, it's a big contributo to inflation, that is beyond just actual energy prices. so in a moment, comments, here are just have a closing thought, that we are unilaterally hamstring-ing your authority t bring inflation down you don't have to respond to this is policy by artificially increasing the cost of energy in this country if we simply would recognize that there is a way to get to transition to green renewabl energy, and make the glide pat sustainable, we could easily separate ourselves from th rest of other wester democracies with respect t that tool which is not in your toolbox. hopefully, we can get to tha

discussion embrace the idea of th transition is notable it's a matter of timing and resilienc in the meantime. just one of the question i know post -- press conference, you ruled ou 100 basis point increase is that a long-term view o based on the circumstances a you see them today in other, words with that be something potentially on the table with the measures that you are taking right now >> i think i would never tak something off the table for an animal purposes. the committee will mak whatever moves it believes are appropriate to restore price ability. >> i for 1 am glad you are a the helm i have a lot of confidence i you. which is why voted for confirmation but we will submitting questions to the record back without the points that i made in the opening statement about

transparency i will say there is some frustration, and i would say it's bipartisan. there are questions we are asking and we are not gettin answers to it - thank you chair. paul thank you for serving >> thank you thank you for your cooperation in this hearing today. -- many americans, most americans worry about inflation. talk for a moment about strengths of the american economy and whether or not you see positive signs of prices stabilizing. >> consumers are overall, not every consumer, overall the consumer sector is in strong shape financially. there's as you know a

substantial accumulated quantity of savings on balance sheets less so at the bottom of the income spectrum, right across the rest of the spectrum that's there to support spending even in the face of higher inflation. you're seeing consumer spending hold up pretty well. sorry, the rest of your question >> the positive signs of prices stabilizing. >> in terms of prices stabilizing, what we're looking for is, you know, compelling evidence that inflation is coming down, we don't have that. nothing i can point to says we have that. i will say core pce inflation is a pretty good indicator where underlying inflation is running and it has moderated over the course of this year reasonably significantly from where it was in the latter part of last year, still way higher than it needs to be. we need to see a lot more progress, but it has been running at a rate the last four,

five months that is lower than it was, but again, still far too high we are looking for that. we're not really seeing it yet there are lots of stories about how this should happen and some people think it is clear that it will, and until we actually do see it happen, we need to keep moving >> and i want to be clear from your comments publicly and to the committee today, you say the economy is not at the point of recession, correct >> i don't see the likelihood of recession as particularly elevated right now you should know that no one is very good at forecasting recessions very far out. no one has been able to do that regularly but i would say that the u.s. economy for now is strong and spending is strong,

consumers in good shape, businesses in good shape clearly financial conditions tightened, and you're seeing growth slow from the elevated levels of last year associated with reopening you're seeing the beginnings of job growth slowing to more sustainable levels, and there's risk in that there's obviously risk in that monetary policy is a blunt tool and there's risk that weaker outcomes are certainly possible. but they're not our intent >> as i said at the beginning of my testimony, my opening statement a couple hours ago, our economy is growing faster than china let me ask two simple questions on gas prices. we heard a lot today about gas prices from both sides, a few yes or nos does president biden set gas prices >> no. >> does congress set gas prices? >> not as far as i know. >> do you as chair of federal reserve set gas prices >> no. >> i wouldn't ask you to assign

a quantum responsibility but starting with the decisions of opec and the world's major oil companies to not produce more, can you tell the committee briefly what goes into the price at the pump and what tools you have, congress has, other government agencies have to bring the price down >> it is principally the price of oil which is set globally by the actions of large oil producing countries and then it is the refining spread, what it costs to refine, what the refiners can charge for the public to consume the refined product. those are the two pieces of it and we don't have, our tools don't work to address either of those things >> let me talk a moment about housing. several asked about skyrocketing costs for renters and aspiring homeowners prices in the last two years, prices weren't that great prior to president biden in the last

administration we know last year rent went up 11%, grew faster than wages. what are short-and long-term effects of inflation if renters see more and more monthly income going to housing >> that will crowd out other kinds of spending and that's, fast increase in housing prices the last couple of years have been very broad across the country and unsustainably high >> and that of course speaks to the importance of building mm more housing last question. we have seen cryptocurrency collapse by $2 trillion and markets crashed the past few weeks, consumers losing money, workers losing jobs, monetary policy report highlighted risks of stable coins, digital assets that aim to maintain a stable value in order to trade cryptocurrencies talk if you would about the

financial stability and monetary policy risks that these assets pose and how are stable coins different in your answer, include how stable coins are different from the u.s. dollar which has the full faith and credit of the united states behind it. >> stable coin is an instrument really that's backed up, there's a reserve that has securities in it meant to assure the value of, say it is a dollar stable coin, meant to assure your interest is actually worth a dollar. that sounds a lot like a money market fund, for example the way money market funds work is there's great transparency about what's in the reserve and requirements budget what must be in the reserve to preserve that one dollar value the world of stable coins is new and emerging and it doesn't have the sort of fit for purpose regulatory scheme that it needs

to, and i think that's something you've been hearing a lot across the board, a number of federal agencies and from our own treasury department which is leading an effort to try to put in place many members of congress have proposed new framework for regulating those assets and it seems like a wise thing. >> you don't, clearly sec, cfpb, other agencies, the fed's role in regulation of cryptocurrency in your mind is what >> well, that's one of the issues is who really does have authority over this and that's something congress would need to clarify. we have authority over what banks can and can't do, some banks and holding companies. the sec has some jurisdiction over securities, cftc has relevant jurisdiction. part of this will be sorting out, deciding what these things are, how they should be

regulated. there are stable coins that are used in connection with crypto trading platforms, that's most of what happens now with stable coins, but there are some stable coins and even more potentially that will be used in payments broadly. that would be two kinds of regulation there it is just an area where congress, and congress is investing band width and looking at proposals and that's a healthy process that should lead over time to something that has bipartisan support and puts in place a regulation for the whole area >> let me draw down further from the last question. if congress doesn't act on, understand what you said about the sec, is the fed directly involved in these regulatory actions regarding cryptocurrency absent a congress action >> just we regulate banks,

regulate and supervise banks we have a say in what our banks, federal reserve regulated banks and bank holding companies do with crypto assets on their balance sheets, what activities are permitted and that kind of thing. the sec is at that table and so -- >> does that suggest a number of american banks are cautious because of oversight of them on crypto >> i mean, american banks are interested, now very much exploring are there profitable opportunities to serve our customers in the new space what we're doing is saying let's be sure that takes place in a way that preserves and supports safety and soundness we've had ongoing set of meetings and collaborations with the fdic and the occ and that's ongoing i guess between us and the occ, so that's an appropriate way to carry forward but it is not a substitute for

what i think -- it is like any other major area of innovation ultimately congress will come together to create a regulatory framework that is more fit for purpose for it as it has in so many other cases >> thank you, chair powell look forward to continue working together for senators that want to submit questions, questions are due one week from today, june 29th please submit your responses no more than 45 days from the day you receive them thank you again for your testimony. committee is adjourned >> thank you welcome to the halftime report i am melissa lee in for scott wapner inflation rates, fed chair powell wrapping up testimony on capitol hill what's the next move for your money. we have the investment committee waiting with their