dow futures are up by 25 points. nasdaq is up by 14. s&p futures come up by about two and you're also watching the 10 year right now yielding just below 4%, so 3.912. again, with my testimony coming, the buckle. big news tonight, 7:00 p.m., last call. make sure you watch it. make sure you are back with us. ♪ welcome. what go to squawk on the street. market, firmly in the 50 basis point camp. adp comes in hot. our roadmap will start with

higher for longer. interest rates are likely to continue to rise, leaving some to question if 6% is really in the cards. >> the shares are moving. they are ground dated. >> we're stopping it. we're not being mean. >> petroleum is moving hi. buffett's berkshire hathaway is adding to his stake in the energy company. i did not get that memo. >> day two of the feds chair's testimony on the hill. it will be the first big hearing for the new committee chair, patrick mchenry. even though you have been off a few days , you (the vocal. sometimes you sit down with people who know more than you, and you know that. what? without a doubt, that was an important thing he said.

>> it was not like he was making any proclamations. aunt you just revise your thinking because someone who's really there, they go, this is how it has to go. inflation is awful. that interchange between senator warren, it should have flipped. the fed, elizabeth warren should be very worried about those swept up in inflation. instead, she's focused on the people in this atmosphere who can't get a job. in charge, instead, is a very liberal fed chair.

i thought man, is he out on front on this one. he knows who's going to be decimated. >> the exchange with warren has been interesting. going back to that, it's really pivotal when you look back on it. this is what diamond told jim not too long ago. >> if we go to recession, it's unlike '08 and 'on nine, it is like normalizing. >> the feds with its method of 5 1/2, six, is not going to solve the inflation problem you're talking about. >> and might go higher. i'm not saying it's going to do that. >> you did say it's going to do that. >> they are not ready for that. >> well, things happen. i mean, i've cited it a few times. you have been gone. there was a

moment. >> he also worried about qt. >> yes. >> and ukraine a lot. well, we should all be worried if the hinese ever -- if we've got a headline that the chinese are arming ukraine, all bets are off. obviously, taiwan. >> we think the second half of the year, things are going to start to bite. >> i think what's more important is, hey, listen. let's not worry. i mean, the stocks, it was crushed, as if suddenly, whatever he thinks is going to be a good one will go bad. but that doesn't seem to be the case this time, and if one more person says this time it's different, we're so stupid. this time is different. that's why the market is going from 1000. people safe stupid things all the time.

what i like about this market is that jamie says, listen. the consumer so resilient that if it went to six, it is fine, but what i want to hear about it who owns the 10 and 20 year and feels good about it? two year, you know? >> the inversion is very large right now. >> why? why wouldn't you just want to own that? nothing wrong with that, or a one year. there is nothing wrong with it. >> it's a real alternative now to equity. >> it is, but that's okay. look, i remember when rates were much higher. people just said, i see equities i like, without a doubt. >> there are things that drive the equity market. we talk about the mid-'90s and the excitement around the possibilities of the internet. we had rates at a similar level

in that period of time. >> i think when you look back, a lot of people are talking about september '81. you've got to go back. september '81, i got into business. it was probably the greatest single time to buy, and you can say yes, there was a recession right there. that was the recession that you would buy into. i can very easily save historically, we are back to where the market began. it's just, these things are not just spots. i will come back and say that was the greatest moment to buy, even with gdp much different now than it was then. >> we discussed that on my fishing trip, and of course, everyone said, this is our great grandchildren's problem. >> the deficit? >> the debt. medicare, we're already at $31

million. say hello. >> you look great, by the way. >> well, i come to play. >> you look rugged. i love the hat. there we are. i think we should just keep that up and show a deepfake over you and do that over you. >> i will have a dropbox. it's very hard to be upset about this 30, 32 trillion when you're enjoying the great wonders of panama. >> to your point, are you watching? do you think the behavior credit spread lately is why we have been able to hold some of these levels in equities? what happens if that changes? >> they did a great piece. look what the market has been

like since october. we all act like this one will do it. i am not saying this is the greatest time to buy. i am saying this will not be to do it because carlottas got their money, the bed baths got their money. we work. why are they able to find money? >> why is crypto holding the mid-20s? >> crypto, now here is a good story. they are talking about savings. i mean, it's a common stock. you would normally say it's worthless, but in this market, it is hertz common stock. >> hertz actually did pay off. so, you say that, but there was euphoria around it when it was in bankruptcy, but some of that ended up being proved correct which was a rare outcome. >> if there is a runt of silver

banks, do you buy in? >> i don't believe you do that unless you have high tolerance for risk . >> right. but if they announce and test none of the fdic workarounds in 2010 and 2009 left anything. >> washington mutual. >> right. >> yesterday, they talked about one risk, lack of transparency, fraud, turmoil in the crypto space even then when they said they were not tried to cycle invitation. >> i think crypto is phony. you had the largest player under, and none of this went unheard. corn based is mocking. have you ever seen a company marked on the regular, light, come and get us? why don't you just get him?

>> musk creates value. i went to a launch. >> the morgan stanley conference yesterday, we talked about that possibility. >> i talked to a lot of people in the room. a lot of people in attendance there talked about community boards, how you verify things, crowdsourcing. people seemed to like what he was talking about, at least what i am told. >> i think he is the real deal. it can go into a space launch. look, i'm sure maybe there is too much, but when you deal with what's happening in the world, he has crushing it. i don't think there is any cessation. >> we'll cover tesla next. actually, there's a drowned

grade today, but a weaponized capacity to the point where they can sell on volume, and everyone else have to play catch-up. >> i made that case about a week ago, and i feel to some degree, i got some blowback from the many factors to said, you think we're just going to sit here and not lower our cost? and there is stories about lithium and how he's got more lithium than ever, and of course, the russians find a lithium. we have to be careful with nuclear. that's one of the stories i have been working on. is a lot of people who feel like nuclear, now that southern has got this, that there really is and that the uranium you need is from russia, and they were always going to source it from russia before russia became our enemy, and the plans are stalled, despite the fact that the new moments are so there.

new england is going to run out of power. they don't use oil. and it's not enough for the great. >> there's all sorts of issues. >> they got rid of everything. they expected the pipelines would come from there, and there were no approvals. it's really problematic. that's going to be the next big energy tussle. how do you get it so they can handle a tough winter? >> we're not going to have to worry about it. >> it is a warm winter. >> next winter, they will be running everything, so they won't have to worry about it. we'll say, how do we fix that, and then we'll be done. >> i think chatgpt will be a fabulous thing for kids in college. instead of what we did, though i did not do this, where we

passed around one paper endlessly, i mean, look. i was in charge of detecting plagiarism when i was in college , and it was really hard. yet to go to the library. boom, yes or no. we had an interview, where he basically says look, you can't do anything unless you use hours. >> one is this? >> march 21. remember, it's virtual. >> but i want to hear it. and it's going to be him, right? it's not going to be virtual repetition of him created by ai. >> the hopper, right? >> the h 100 is the one that everything is going to be written on, but there are hundreds of them. i don't think people understand. also, by the way, we have no

idea what you're talking about. >> in order to do chatgpt, you need a massive number of the cards, so nvidia has demand as far as the eye can see, like verizon, and nobody else is out there. no one competes , no one, and there's a lot of mocking of the law. but, you know, intel is bound by this law, this idea that chips shrink, and then you are done. you can't shrink them anymore. you don't gain anything when you shrink them. >> i therapies in the journal about google, and how they were too cautious on ai, and that left an opening fornadella. >> they have an advertising model, and they don't want to completely cannibalize the business, with $280 billion of

revenue from search. >> why would i look at the tertiary? i want great fishing gear. how about we just use this. >> okay, go buy some performance fishing gear? there you go. screw everyone else. we will talk some tesla. investigation into the model y. we dig into the story about ftc, potentially looking into twitter as well. inflation risks and navigating supply chain challenges. we're once again stabilizing after yesterday's downfall, but the two year, one ye, siarx month, all topping 5% today. 107 basis points. don't go away.

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a new investigator into tesla's model y suv after receiving two complaints that the steering wheel can come off while the suv is being driven. the investigation covers an estimated 120,000 vehicles of the 2023 model year. two complaints. we've got to make it clear. >> we have seen recall some of the companies involving tens of thousands.

you get a couple steering wheels. at some point, whether it's the fcc, any investigation into this? just watch. >> you don't need a steering wheel anyway. this thing drives itself. i'm saying it's self driving. don't worry about it. >> i agree. these companies are spending billions to make that happen. nvidia does a very good stuff. it's like literally every other word. >> i was in panama fishing, and then we went on, and the weather got a little bit nvidia. >> okay.

>> it's the backbone of a lot of stuff. >> it's impossible to underestimate the fact that next year this time, things are going to be much smaller than it is now. >> what is this? the car? >> you know what. >> i am scared jim during the break about the power of it i. >> it's possible, and re mentioned i mentioned it with just be there, and it would say things smarter than i am, and it would use the same stupid philadelphia accent that i have, which took all weekend for me to create, and why me? >> looking at some of your tweets the last 48 hours, you said something has got to go down. >> people by semis without any regard for the market. don't think these companies are exempt. they are all up again

today. i really like when stocks are down, and i like when fish get away, and i like when sharks bite the line, and i like nvidia to stick. >> we will talks on apple on some of these asian channel checks. we'll get cramer's mad dash. we will countdown to the opening bell. do not miss tonight's premiere of cnbc last call with brian sullivan. heilexor wl ple the intersection of money, culture, policy, in a way only brian can get a premiers tonight at 7:00 p.m. eastern time. more squawk on the street, in just a moment.

and was mentioning the strength of the chips. you will see amd on the list of the market. also, crowd strike with a nice meat so positive street commentary. going to open up almost 5%. we'll get the opening bell at about six minutes, and you can catch us anytime, anywhere. just listen and follow to the squawk on the street opening bell podcast.

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we've got news to get started with the opening bell at the new york stock exchange. back from a great fishing trip. thank you. where do you want to start off? >> we had the ceo on yesterday. >> he is terrific. so, the thing is, craig arnold,

ceo, joined us yesterday. 100 years since they listed. you're great company. they've still got some great actual making things, but if you look at this company since the pivot of the fed, which is september up '23, industrial start going up. the dollar has changed. the chart should be upside down if there was a tightening matter. what this company makes is what used to get crushed. instead, what's going down arctic consumer patents. >> it's because of the changing nature of their underlying business, because he is talking digitization. >> that's why the cummings interview will be so transformative.

you've got a lot of these companies who figured out, we used to get crushed. let's not get crushed anymore. let's become more about secular growth. let's become less dependent on whether the dollar is strong or weak. let's not compete if the germans are in or chinese are in, and there are a result of these companies that are really playing how do you know. you may want to be shorting the market. grandma can industrial, that's going exactly in the wrong direction from how the bears defense. there is caterpillar. how about partner hannibal? every one of those. >> s&p industrial is near 52. >> that's the problem. look at that. we're all waiting for the fed

to do this or that. and i love it. >> there is a look at it. opening bell here. investment company, kkr. they are celebrating international women's day toda , as we're about half an hour on the hill. i do wonder whether or not there's going to be clarification of yesterday's comment in the q&a. >> i think you've got to go back over that senator warren in exchange and explained the number of people who are hurt percentagewise in the country versus the number of people who could be wiped back. i think is great, when you take

a look at what happened, people really got hurt are the people who are poor. not the rich people who own mansions and great artwork. those held their value, but it's not really understanding who it is who is protected. >> they should be saying, look. you can't go to the supermarke . instead, she is arguing there's a 3.6 unemployment. she is defending the ability of people to not get jobs after they are laid off, kind of like when they said there aren't any workers. she is not historical and empirical. that was the take immediately

after she said it. she is making these assertions in this particular environment. you've got to listen to it. take a listen. >> here powell, if you could speak directly to the 2 million hard-working people who have decent jobs today who you are planning to get fired over the next year, what would you say to them? how would you explain your view that they need to lose their jobs? >> i would explain to people more broadly that inflation is extremely high, and it's hurting the working people of this country badly, all of them, not just 2 million of them. all of them are suffering under high inflation, and we are taking the only measures we have to bring inflation down. >> and putting 2 million people out of work as part of the cost, and they just have to bear it? >> will working people be better off if we just walk away from our jobs and inflation remains 5%, 6%? >> this is the argument to get to your terminal rate fast because the longer it takes, the more the political friction

will take place. >> think about what she said that there is 340 million people in the country, 2 million people who might be fired but are available for many other jobs, but she is saying part of the economy, people are being laid off so far are higher paid workers, and he is saying, listen. there's a percent of the country that makes less than 40,000. you want to defend the people? why not take it head on? senator warren, you are on the wrong side of history. in the wrong side of history. meanwhile, given my new obsession with ai, i think she should be focused on how many jobs conceivably are going to be replaced within a year or so as a result of advancements there. i know every time we get a technological revolution, we

think these ways. typically, more jobs and a being created. let's hope that is the case, but i hear more and more businesses using chatgpt barcoding. right now it is helping here, helping there. how long will it be until certain jobs are replaced? she should be thinking more about that. >> here sorry been some work. initial victims are going to be telemarketers, teachers, secondary education. they will be in the firing line early. >> they will be. i think there's no doubt about it. they could be. by the way, if you go to the much-maligned mark zuckerberg, who continues to lay off people, he regarded the metaverse. now, the metaverse is becoming a joke like, ha ha, metaverse. he was all about ai now.

he is in. i know medical and ai go together, but you don't hear meta anymore. you hear ai. >> he and nvidia have something going on? >> yes, yes they do. >> you have said this, that they have been meeting. >> what are they going to do? >> if i knew, i would have to be killed. >> i don't know if you saw this times piece where they asked gpt to write an episode of máaásáh. i think they tweeted it out a few minutes ago. >> they both read it. sorry, we don't need your services anymore. >> obviously, were at the cusp of when you can tell the

machine. but it's picking up, like it was reporting here. and by the end, there telling it what to do, right? >> right. >> driving and picking up. >> i don't know about that. they probably are getting a lot closer. >> doing millions of simulations . can we just say, again, we have an economy where we are talking about, we can't find enough workers, and we have technology that would help us, yet it is not being used, so when are all the drive-throughs going to be replaced? >> self driving was a lot further away than we imagined it was.

that was three or four years ago when we were talking about it. but that they could still come fairly soon, where a lot of truck drivers are ultimately replaced for ev routes. >> it would've been better for a human or a machine to be behind it? >> by the way, there's a great piece this morning looking at chips, infrastructure act, ira, and the labor, construction labor and that i think the quote is, shovel ready projects are not any good if there are no shovels. >> states have not passed down the rules, but the companies that are ready, you have to have someone that will be ready, but you don't have any plans, and you don't have enough people, and how do you find the people? it's international women's day, and thank you for everything.

but this idea that we do not let -- we have sold many more jobs that need to be filled, and right now, there are people in tough areas can't get jobs. they talked a lot about how there is a college barrier for a lot of people, but there's also the jobs that she's talking about, that our jobs that chat ai will deal with. >> chatgpt. >> there will be others. >> but we had so many jobs. >> right. >> to carl's point on that máaásáh episode, it is coming in some ways for the creative jobs. they set they will be the first to go. the ones that you are

transcribing that can't be filled are not going to be described, threatened by it. >> number one is copyright, and making anything that's advertising is going to be done much more efficiently. i have seen it. it's really incredible. if you have a banking business, you can sit there and use adobe. you put it in, and designs your instagram page. there you go. >> financial news anchor, right below that. >> maybe the people who make campbell soup. >> nice segway. number two s&p later this morning , as u.s. soup of beverage, organic up 11. >> i was sent the most recent

iterations of soup and chili. it got a lot of vegetarian, which is good. i defy you to see whether it's homemade or not. it's really fantastic. they have kept up . i'm going to innovate us out of this hole that we dug, and he did. >> the only one above it is oxly has another 350 million. what is he? >> what's the point. >> when is he going to make the bed? >> why not buy it all? >> he likes it. he likes it. there was also that story today in the journal about it not being as productive as it's been in the past. also, he is there, and i think this is a story that skewed too

much and did not present well. i've got to go to my source because i don't think chevron -- he spent a lot of money. there is a notion of not a moment of vagueness, but every single one was going to turn capital. >> i wish you were here yesterday because goldman did a piece basically asking why oil is not anticipatory. >> and there is china in a worldwide market. obviously, russia is the wild card. we have no idea about anything, yet we pretend. >> remember when they started dealing with the guy who

started oxly? like that. we're going to be capitalist. we're losing capital in this country. >> not john lennon. >> i love when you do this. >> someone stopped me on the street. it was an older woman. it's supposedly more related to >> then lennon. he held up. >> so it held up a lot better than the communist party. >> the shares, you get people to set it up.

they did get it done when they included options with the 1.4 billion proceeds. that is a new low. we're down to about a $13 billion market value, and as we point out, it's reflective of what we've been through. we can go back further to. over $100 billion market value at one point. >> remember, word got out. >> i do. >> they weren't stupid. >> every sale is a good sale. >> yeah. >> yes. >> that's obvious. >> ford did not get a great price. >> but it's better than where the stock is right now. >> you did not mention lucid at all. >> lives has a higher market value that rivian does right now.

it dollars 20, you see the stock price there. you could argue all that has been taken out. what they buy and don't own. again, both companies have been hit by worries about their ability to hit their target. >> it cuts in favor. a couple steering wheels go off, you know? >> meanwhile, unused cars, jumping. >> probably the most negative thing. endless, endless rise in prices. then and went the wrong way. i just feel like that's one of the things where, listen, we underestimated it, and he is referring to that. he was referring to campbell.

every one of the price increases held. >> what? >> i'm just saying. our only hope is chatgpt. like, you can laugh. i think -- i bet you boeing has a huge number of people who can replace -- its engineers, not metal benders. it's the engineers that will be under fire the most after we get through. they'll be making human eye markets, and they believe we'll have a one to one ratio of them versus people. >> i'm painting a scenario. >> chatgpt. judges? referees.

>> we've still got umpires calling balls and strikes, even though we can see every time they call it wrong. >> it's lovably in the march 21 keynote. they seemed to get that keynote right here. >> really quick, on a sort of related note, tiktok is on the cover of the new york post. actually, it started raising the possibility of a ban in december because of a statement out of the national security council today. >> this could actually happen. last fall, meta-, how much time it's been on wheels? it's like a visionary. you put as much money on reels

as much as possible. i've seen some real cool advertising done on tiktok. it is hard to imagine a platform going away given how many millions of people use it, enjoy it. i know it's got a lot of detractors for obvious reasons, but not necessarily because of the security implications. because it's mental health, it goes across the board for so much social media, particularly when you are dealing with younger people. >> do you think there will be action at the end? >> if got to figure out a way to get that. 16 billion in profit. >> general atlantic. significant owners of bytedance, the owners of tiktok. if this is really going to come to pass, they've got to meet objections with some sort of

which they had been contemplating at the end of the trump administration that the chinese could be using it for spying. >> it's going to be who lost the u.s.. that is what the chinese are going to say. which leader lost? that is going to be the narrative the next five years. just like we had the pain of losing china to the communists in the '40s. >> they have one guy who runs the country. >> who lost america? >> no way. >> the machines are going to say it. sign up and find out more and join the club. always, use the qr code on the screen.

jim was pointing out, the 10 year, back to 3.9. back in a minute

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watching some movers this morning, your biggest s&p laggard will be etsy, back to the 200 day for the first time since halloween. as we've been parsing through data that shows at least apparel, econ, one of the worst performing sto f tecrsorhe week of march dow is flat. we'll get trading with jim in a minute

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let's get to jim and stock trading. >> stitch fiction last night, revenue declined 20% just extraordinary what makes me think of this is maybe this is the end of fashion. people rent the runway, nordstrom, people used to pay up, and now it's like everybody is just kind of looks just kind

of whatever they want to. >> i'm glad you said it. i mentioned this, citi credit card data, last week's biggest loser apparel, down 28 the gainers were cosmetics and pet shops. >> right estee lauder is doing well elf is doing well. but sometimes you're on a boat and not thinking about this stuff. i want to thank michael, who is the most brilliant person in our business, because that was the time of my life in panama. and yes, i did not think about this space or rent the runway or anything else. david, they are not -- no machine is ever going to catch a cubera of that size. and they're not edible we threw them back, catch and release, except the tuna >> you caught a tuna >> mie dale caught a 185 pound tuna, two and a half hours work

to bring him in. we didn't throw that back. we had a month of sushi in one day. looking forward to tonight -- >> she has a book out, international women's day. and george kurtz dblew the numbers away and cloud strike did great was not gap positive it was nongap. >> adjusted ebitdas in our sites. >> a machine mocked me like you mocked me. >> yes plenty of source material. >> take my voice any way, take the things iav he said and it'll be an endless morning.

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good wednesday morning welcome to another hour of

"squawk on the street" i'm sara eisen here with carl quintanilla, david faber live for you as always at post nine of the new york stock exchange moments away from day two of fed chair jay powell on capitol hill we'll take you live to the q&a when it happens. ahead of that, markets are kind of steady here the s&p 500 is down 5 points the dow is pretty much unchanged. just flipped negative. had early gains. the nasdaq hit the hardest because that two-year yield, the short term yield, continues to move higher on the back of what powell said yesterday and the data we have gotten, adp strong again today, private sector jobs getting openings. >> 10.8 million, looking for 10.5 unbeatable >> and that's probably why the market is turning lower right now. adds to evidence that things are strong and what did powell say yesterday?

if the data continues to come in strong we'll do faster and higher hikes and keep them higher longer. the two-year yield, let's look that's the reflection of where the fed expectations have been, closed above 5%. at the highest levels since june 2007 and what's happening is the end of the year, or the ten year, we've seen those rates come down and that means the curve inversion is getting deeper. we're now at levels on the inversion which is a key recessionary signal because of the fed hiking that's going to have to come on. since the '80s that's the last time we saw this hiking to put us in recession. >> when i was in my prime and you were not born. >> are you making fun of me or yourself there >> i'm not sure. going where you were about to go we've been talking about that inversion for some time it continues and, of course, there is a course that says we're going to get 50 basis points perhaps instead of 25. >> it's on the table

powell put it on the table when he talked about faster hikes here's stultz, towards the 50 basis points the next test is jobs, a job report on friday, and cpi report next week ahead of the march fed meeting. if all of those numbers look firm or hot, 50 is on the table. that's what the market is telling you. and then another one, and then another one. and then we could stay at these high levels and the market priced out the cuts. >> that's the key, how long we stay there if we get there quickly where do we end up? where's the terminal rate? many think it could end above 6% wasn't long ago we were all debating 5 and do we stay there for a long period of time? >> the key question that nobody knows and the market is struggling to price and figure out, what will be the impact of the tightening what's it looks like on the other side, is it a hard landing? is it a soft landing the more the fed has to do, the

chances of a soft landing get pushed out, right because the tightening has a lagged impact and it hurts the economy i thought the back and forth with elizabeth warren, the senator yesterday, pushing him on this idea he's going to tighten and drive up the unemployment rate was interesting because he was so defensive. do we have that sound? >> chair powell, if you could speak directly to the 2 million hardworking people who have decent jobs today who you're planning to get fired over the next year, what would you say to them how would you explain your view that they need to lose their jobs >> i would explain to people more broadly that inflation is extremely high and it's hurting the working peemt of this country badly, all of them not just 2 million of them, but all of them are suffering you under high inflation and we're taking the only measures we have to bring inflation down. >> and putting 2 million people

out of work is just part of the cost and they have to bear it? >> will working people be better off if we walk away from our jobs and inflation remains 5, 6% >> she's not wrong that we're going to have higher unemployment eventually because of the tightening to the economy but she's dead wrong in the fact that we have historically high unemployment -- historically low unemployment rate right now the problem is we have historically high inflation therefore, because the fed has a dual mandate, they're missing on the inflation side of the mandate. so if she wants to change, change the mandate from congress we have job openings in this counted with low employment. >> wish he said, 2 million is a lot, 85 million is a lot more, meaning the overall labor force dealing with these high prices all the time especially when you're looking at a lower, where excess savings is expected to go dry in q2.

>> this is what the fed does it fights high prices. this is central bank's mandate, it cannot let inflation get out of control historically that's damaging to the economy and labor force. this is what they have to do even though it's taking heat one more chart because it is international women's day, talking about inflation and powell, he's bloun out a lot of the coverage i had planned look, even inflation is unequal. a great chart from bank of america and it looks at some of the prices in the uk but of items like shoes and apparel, and you can see the lighter color blue, that's for women's clothing and women's boots and women's electrical items, tools, hair cuts are all in there and then the other one, the lower one is for men >> which is for men? blue is for men, then. >> blue is for menlit

light or white bluish is women's. the bottom line is it's higher for women. women have seen shoe prices go up 80% in the uk the last two years. and for men, less so just to show you the tax >> i thought the better chart was the wage gap as women get older. >> after you have your first kid, the wage gap intensifies and worsens. as the kid gets older and you get older, worse so. to a the strong degree we've seen good progress in gender equality in the last year, women have joined boards and economies and startups first of all, that takes us to 132 years to achieve gender equality, maybe better than more than 200 years which is where we were but there are also worrisome signs. women make up a huge majority of the jobs in health care and education, and those are the

groups in the economy that have seen the fewest wage gapes during the increase. child care costs a litany showing the gains in gender equality may not last. >> women added to s&p boards, 34 this year, best start since 2019. >> good. maybe we won't have to talk about it one day. >> maybe sadly i don't think we will. although you do live longer then men. so you have that. >> says the aging male at the table. >> i tried insulting myself first to cut her off but she went there it's true, i'll die before you sarah. >> you never know, david let's not get morbid. >> you never know. that's why we live >> let's talk about the markets right now, bring in mike santoli. of course equity markets try to adjust to the powell testimony from yesterday and all the things sarah brought up.

>> seems we may have gotten a little bounce. the actual jobs opening number is airy, i don't think it necessarily fits with the other labor market indicators. so the quit rate is how many people left their jobs, down from 3% to 2.5%. the bigger picture what happened yesterday? the market priced in perhaps another quarter point over the next six months. that's really what happened, whether it comes as a half point rate hike in march or later on, that's what we adjusted to so really the stock market just swept away friday's rally. we didn't escape from the messy range we've been in for several weeks right now before the powell testimony yesterday but you also have not really sunk back. to me it's this uneven type of market where regional banks are under a lot of pressure and they're at risk of breaking down if you look at the five year chart of the regional banking,

it's bounced off recently but going back years why? commercial real estate regional banks own half of all real estate debt that's one part of the rate sensitive economy. and then you have industrials trouncing things like utilities and other defensive groups in this utility year to date. so these conflicting messages about the economy boiling down into what's going to be the tone and choice that powell makes we have a fed blackout after this week in terms of their speaking. it's all about the jobs number nothing is going to up stage that the fed is not looking to make tricky bank shots to get inflation down they have to see the numbers lower. but employment and inflation what powell could have said multiple times yesterday is we don't know how many jobs might have to be sacrificed. >> he said that. >> yes but you can say inflation is

down from 10 to 6 we have 3.5% unemployment still we don't know what the relationship is. we'll let it play out, do what we need to do. we wanted a data dependent fed we have and the data has been stronger. >> we talk about the fed and what hey're going to do. there's earnings risk here with what the fed is doing. >> for sure. >> the dollar continues to go stronger, everyone expected it peaked and it was going to go down and that was a relief for earnings at the highest level now since december bank of canada paused on rate hikes. that was expected but shows the fed is now getting more out front of other central banks and that makes the dollar more attractive in the world. and it hurts earnings. interest costs are going to go up for these companies so i think the question might be that you're -- >> taxes are up. they 'also filtering through this year. >> no doubt the pressure and a lot of the debate has had to do with what's the right valuation on equities if rates are where they are

but yes, there is wear and tear on the earnings number, too. that's why it's a selective market not one you say buy it. it makes all the sense in the world even though markets have acted better it's more who's better positioned and have we priced in earnings risks >> others argue just in time inventory affect the way companies order. certainly the amount that corporate did that fixed did going into the prior cycles. >> people pointed to wal-mart in the guidance saying interest was up 750 million this year that's huge. except if you look at the revenue base of walmart and what the earnings base is it's sort of going in the wrong direction but not a killer. >> mike, thank you mike santoli stay close as we get through day two of testimony. one key laggard. ad adidas, the company reporting a net loss

the kanye problem continues to be a massive issue for this company's financials warning of the first annual loss in a long time they took a big loss this fourth quarter and slashed the dividends, david, by 80% goes from bad to worse for adidas they're having other issues but the kanye issue -- >> why don't you explain it again for those who may not have been following the day-to-day. >> they terminated the relationship with kanye, it took them too long, three weeks after his anti-semitic tirade and threat so they did that and were left with inventory on their books and lost sales, the estimates were 5 to 6% of overall revenue. he was so hard to work with. bashed them throughout the relationship they waited too long they did it too late now they're suffering and they have to explain themselves >> just want to take you -- so

adidas down more than half a percent. take you to washington, capitol hill where jay powell is taking questions from members of the house committee. sorry, we're not going to go to that now we're going to wait and hear further questions. he's still doing his testimony on day two monitoring that on the hill. in the meantime talking industrial action. stocks coming off the big selloff but one name this week cummings as the company continues to combat inflation risk and supply chain challenges joining us is ceo jennifer rumsey great to have you here on international women's day. thank you. >> thank you for having me. we've had the conversation about what the economy is going to look like on the back of the tightening what are you seeing in your key

end markets which are usually a pretty good leading i said cater. >> before i come to that, i want to know we had an exciting announcement this morning, really our next break through as we accelerate our destination zero strategy to decarbonize our industry notice behind me, the accelera we announced we're branding our new business accelera by cummins. we've been investing in our destination zero strategy to decarbonize our ampplications around the world advancing the engine based solutions we're known for and improving efficiency and using low and zero carbon fuel we have built the broadest portfolio of zero carbon in our

industry for the world so today we 'asserting that position to grow and lead through the decarbonization transition by announcing accelera by cummins and this year predicting to grow the revenue to $400 million, and we projected by 2030 in this business we'll see revenue between 6 and $13 billion all focused on bringing the zero emissions technologies into our market and adjacent growth offered in the green hydrogen infrastructure space it's an exciting day and i wanted to note that as we start our conversation. >> appreciate you sharing the news with us what about evs does that play into the strategy here what signals have you gotten from that market in the past year or so >> exactly there's a lot of interest from our customers and how they decarbonize. our industry serves a wide range of different applications, buses, pick up and delivery

trucks, pickups, mining, our customers are focused on how do i start today and what solutions work for me as we go forward in the future we announced today we'll more than double the number of electric school buses in operation over the next 12 to 18 months in our partnership with blue bird. an example of a market that wants to move. the technology is capable. there are customers that want to afford to adopt the technology we shouldn't lose sight of the fact our industry is really at the heart of our economy we're serving those applications that keep our economy and our world running. and so it's going to take time and that's why the dual path focus is important and the recognition of what it takes to accelerate and drive forward the zero emission solutions is critical for our business. >> what about how i started, you know, jennifer, asking about the economy and what signals you're

seeing there your end markets? any sign of slow down? >> we continue to pay a lot of attention to what's happening in our global markets we're coming out of two years where our customers had really high demand and we have strong back logs, strong orders that are taking us out well into this year we're paying attention to those broader economic indicators, of course inflation rates and what's happening at this point, demand is there, my team is focused on making sure we're continuing to work through the places where we have supply chain challenges so our products are performing well, we see strong demand and the opportunity to continue to grow as we address this need to decarbonize our industry. >> jen nifer, it's david faber. you're talking ability reaching net zero by 2050 so still 27 years from now most importantly judging how committed you are to this in

terms of capital allocation, can you give us a sense how that is being apportioned within the company to generate the revenues this year and the profits you think for years to come? >> yeah. one of the benefits in this journey towards zero we are investing in engine based solutions and growing that part of our business and delivering strong revenue and cash to our bottom line that allows us to continue to invest in engine based solutions as well. >> i think we lost her we'll work on getting your audio back apologies we'll try to fix that -- >> she's back. >> jennifer, you there >> yeah. can you hear me now? >> r yes, we can hear you. >> great 37 when i look at capital allocation, we're generating strong cash in our business and that allows us to

invest in the range of technologies to decarbonize. and we will continue to deliver at least half of our returns back to our investors in the form of dividends and share repurchase as we continue to invest and grow the company for the future. >> the inflation reduction act is that having an impact at all in terms of how you're choosing to invest? >> we were active in advocating for the climate provisions part of the inflation reduction act in order to move the new technologies forward you need incentives to drive adoption of the new technologies and go about the infrastructure to support it it's more expensive today for our customers and we need to scale up and drive costs down. so we think these are positive and we see interest in infrastructure sides and our business for green hydrogen production as well as for our customers. that these incentives will help them start to adopt these new

technologies. >> you say the outlook for china is cloudy. i wonder if there's any way to be specific and talk about how committed you are to the market as policy vis-a-vis the u.s. gets more complicated? >> the china market has been done for us since the 2020 time frame. they had an emissions change over and with the strict covid lockdown policies it hampered the economy there. of course they lifted the lockdown policies last year so we're starting to see some signs of improvement of the economy in china. it is an important market for us, it's a large truck and commercial application market for us today so we're starting to see improvement projektcting in if total about 7% growth in china this year and accelerating that growth as we go through the year but we're continuing to watch it closely as it's still cloudy.

>> how about inflation, how would you characterize what's happening on pricing. >> -- and is the supply chain fixed? >> those are the questions we've been wrestling with, we've been able to take up our build rates and meet customer demands better so we see issues inflation has been a challenge the last couple years. in some places we're seeing some stabilization. and we've really focused on working through some of our long term agreements in particular and making sure we were able to recover some of the costs that come as a result of this -- the inflation. so you saw that improving our performance last year atz we saw not only record revenue for cummins, but also record returns for the company. >> jennifer, thank you for joining us today really good to get the color and the news as well >> thank you >> jennifer rumsey, one of the

few ceos in the 500. we're unchanged going into powell day two not sure he can be more hawkish than he was yesterday. i guess he could be. i'm not sure why the market was surprised given the strong data we've had going into the powell testimony from the last time we heard from him at the enmeeting. but a big adjustment in terms of rate adjustments, going higher and staying longer and that's why the market has been hurt and it's tentative today. >> came in this morning, adp ran hot. which is interesting because they have this new model they've only policied about six prints under the new methodology. and they under shot payroll four to six times so a hotter than expected number on friday. we'll see what happens, but for now get to the fed chair. >> there's been a lot of discussion over the past 24 hours about the effect of rate increases on the economy a lot of debate what you said

yesterday in the senate. but no one asked you this directly we have a march meeting coming up in two weeks, how do you think about the march meeting? what's your approach to that what are we likely to see? >> thank you so i won't repeat what i just said in my testimony, but if i turn to the march meeting, i guess i would say that we have some potentially important data coming up, data to be analyzed one of them came out at 10:00, that would be the jolts report which i haven't seen since i was sitting here at 10:00. but we're also getting a jobs report on friday and cpi and ppi inflation report next week so that will be important and we'll scrutinize them. when we say we'll look at the totality of the data, that doesn't include the reports yet to m come they'll be important in our readings and the overall projection of the economy. we'll be careful to analyze it

we have not made any decision about the march meeting. we won't do that until we see the additional data. to your point, though, we're not on a preset path and we will be guided by the incoming data and evolving outlook. >> you also said higher longer is that still the case >> yes as i said in my testimony, we look at the data since january and also the revisions to the november and december inflation data and they suggest that the ultimate level of interest rates is higher than we expected. >> what are those economic factors? >> so back to january, as i mentioned, the nice -- the softer inflation readings of november and december were rev revised up, a strong inflation report for january, an extraordinarily strong employment report, strong consumer spending, strong manufacturing data right across the board. as i pointed out, some of that may have been achkted by very warm january weather but nonetheless all of it pointed in the same direction.

>> let's move to regulation. chair powell, in january the federal reserve put out a policy statement noting permissible activity if done in a safe and sound manner however if a bank can demonstrate to the fed if it can conduct that activity, the capital impact of the s.e.c.'s staff accounting bulletin precludes banks from offering digital asset custody service at any scale. are you aware of the staff accounting bulletin and its impact on custodial services >> i am aware of it. it's an s.e.c. accountable bulletin, 121 i think. >> that's right. >> certainly aware of it and we do follow general accepted accounting principles in our regulation. >> yes without objection i'll submit it for the record my lertd to the bank regulators about this

so while the fed said it can be done in a safe and sound manner the s.e.c. has regulated it so it cannot be done. next question about bank capital standards. you have questions about this yesterday. chair barr has announced a holistic review of capital requirements as i said in in my opening statement, a lot of question bs about this process, and previous statements by members of the fed governors about the adequacy of current capital standards. and so, while the vice chair for supervision announced the feds when engaged in a holistic review, what is the process? there are a lot of questions people have about his statements so we want to understand why it's necessary for the fed to conduct a holistic review and what the process is.

and so, you know, my general question is, do you still agree with your previous statements about the adequacy of a generalized basis of our financial system or are we to read into this that we're not adequately capitalized and there's a high level of risk in the system we're unaware of at this point >> the why really is just that as a new vice chair for supervision, vice chair barr is looking at everything, it's typical of the last two people to have the job, that makes a lot of sense in terms of the process, it's -- you know, it's certainly conducted under vice chair barr's leadership with input from the staff and discussions with governors on that committee. and i'm kept broadly apprised about what's going on. but the bottom line is nothing has been -- nothing has been

proposed to the board, formalized at this point, a lot of work is going on, discussions going on within industry and that sort of thing when we get to the place that's appropriate, the board will be carefully briefed, ultimately vote on a proposal and that will go out for comment and we'll solis it comment from any and all commenters it'll be a wide open process >> thank you i yield back recognize the gentle woman from california, ms. waters, the ranking member. >> thank you chair powell i agree with what you said on february 1st, that congress must raise the debt limit because of what you described as the highly risky consequences of failing to do so you are perhaps the most important expert on the debt limit which is why i find it very concerning that your recommendation to raise the debt

limit in a timely manner is being ignored by my colleagues on the other side of the aisle i'm also concerned that the consequences of this brinksmanship are imminent fitch ratings said this week, they may look at downgrading the u.s. debt based on the escalating brinksmanship they are observing. even if congress ultimately addresses the debt limit at the last minute. this is history repeating itself standard and porous downgraded our debt back in 2011, the republicans last controlled the house and threatened default the bipartisan policy center later found that the 2011 debt limit debate cost us $18.9 billion. in higher borrowing costs. even though we never defaulted so put that into perspective, that could have been leveraged to provide up to 200 billion in

loans to small businesses through the state small business credit initiative or to provide hundreds of thousands of people down payment assistance to buy their first home so i want to emphasize that house republicans, including most of the republicans on this committee, at in qualms about paying our debts when trump was in office, three times they addressed the debt ceiling in a timely manner without holding our country hostage but republicans in the house are ready to tear down the hard work of americans everywhere to render the pandemic and build back a strong economy. can you describe for us the risk you see if congress continues to delay actions on the debt limit both for our economy and individuals and families >> let me start briefly by saying we have no role and seek no role in what is at the heart of fiscal policy except i will limit myself to the two things

that other fed chairs have said about this one is just that congress raising the debt ceiling is the only alternative, there are no rabbits in hats to be pulled out on this. two is just that no one should assume that the fed can protect the economy from, you know, the nonpayment of the government's bills, let alone a debt default or something of that nature. which we don't think will happen here but no one should be thinking we have the tools to protect the economy from the potential effects of that. >> thank you very much i don't want to miss what you said i somewhat quoted you, when you said that congress must raise the debt limit because of what you described as a highly risky consequence of failing to do so, is that your language? >> must in the sense that's really the only way for the debt limit to be raised is congress must act again, these are fiscal discussions and with we're

not -- we don't want to be part of them. and really they're between, you know, elected officials. >> but you are an expert on the subject? >> well, i spent a lot of time on this as you recall. >> as an expert on the subject you are concerned about the high risky consequence of failing to do so. is that correct? did i correctly quote you? >> that's correct. >> thank you and so, again let me just go a little bit further the chair mentioned he had written a letter or maybe had some conversation from janet yellen about the time limit that she had attempted to describe. is it your understanding that she said she could maneuver and kind of manipulate things so that she paid the bills that were coming due, but this could only last until about june

is that your understanding >> honestly, i would really have to not try to interpret the secretary's words. that's up to her to do >> can she keep us afloat until about june >> that's not more pe to say these are questions for the secretary. i'm sorry, ms. waters. >> have you had any conversations with her about the statement she made about being able to manipulate the debt and pay bills that are coming down out of another count, et cetera? did you have that conversation with her >>, the conversations that you and i have privately don't go anywhere, i don't talk about them with anybody and the conversations i have with secretary yellen i don't -- >> i don't want to -- >> the gentle lady's time is expired. >> beg your pardon >> the gentle lady's time is expired. >> did i have equal time with you? >> sure did.

>> if i did, thank you i yield back. >> i recognize the vice chair of the full committee, mr. hill of arkansas >> thank you, mr. chairman and thank you chair powell for being with us. don't wait until we ask if you want to come volunteer and and ask. thanks for talking about your commitment to price stability we had this discussion last june i think that's the primary mission of the fed and only priority of the fed is price stability because it's the legislative branch and executive branch that are responsible for, quote, full employment and having that policy environment and makeing sure that's right. so your commitment to price stability is welcome by this committee. yesterday in the senate you suggested that you supported a regulatory framework abroadly regulatory framework for digital assets, is that right?

>> yes >> is it your view that if we had a regulatory framework here in the united states for digital assets there be more transparency and rules of the road for consumers, investors and developers >> absolutely. >> if we had those rules of the road for business seeking to use and develop block chain as a potential new technology in their business and tokenized payments that that would be beneficial to business to know how to go about that. >> yes, and to ensure it's done in a safe and sound manner talking about banks. >> and my next point would be that, to help banks, investment brokers, custodians understood how they could participate in that market in a safe and sound manner you agree a regulatory framework would help on that >> yes : finally we've grown up in our country, it's yu neek unique in

the world and we have a dual banking system and we have insurance regulated exclusively by the states. so would you believe that that regulatory framework would also have to preserve some sort of role, subject to safety and soundness, for states to play some role in that regulatory framework for digital assets >> let me just say i think the work -- it certainly works in banking and insurance. i have no problem with those. >> you consider it possible that it could also work in digital assets. >> certainly possible. >> thank you turning to a topic that's been a subject here for four years, central bank digital currencies, article one of the constitution reserves coin and coin -- money issuance to the congress and we've in turn delegated that to

the u.s. treasury which from 1912 engaged as their fiscal agent you testified before, to issue a central bank digital currency that would have to be authorized by statute by congress is that still your testimony? >> that's absolutely the case. potential forms of the wholesale cbdc we need to look at. we've been talking about retail cbdc and that's something we need congressional approval for. >> what would be the parameter on something that's not a retail cbdc you think that could be issued in some form or fashion without congress' direct statutory authorization. >> for example it would be something between banks so it would look like a bank reserve you ask why we might need it, that's a good question too but just something within a wholesale market >> but that speaks that you might have a block chain between banks and the fed using a central bank digital currency

token to settle transactions institutionally inside the -- yeah so that leads me to fed now. which is supposesed d to be up d running i think this summer. somewhat behind the scene there. i would like to ask you to formally have this full committee briefed on that by the federal reserve. i know the chair of the kansas city bank was involved she's now left and i think the committee has a lot of questions about fed now, how its interoperatability will work, how it's going to roll out. and also a question we've been asked why the fed wire system isn't up 24 hours a day, seven days a week now to benefit consumers using venmo. do you have a thought on that? >> i'm not sure why we're not 24/7 on that of course, be delighted to come up and brief the committee on -- >> we'll take you up on that

and mr. chairman, i yield back >> now recognize the chair of the -- the ranking member of the capital market subcommittee mr. sherman of california for five minutes. >> i want to thank you for bringing to our committee's attention several years ago the importance of tough legacy libo some $16 trillion of instrument where the creditor wouldn't know how much the debtor was supposed to pay this committee we passed legislation over a year before the libor hit the fan. you issued regulations seven months before the absolute deadline i hope we do this in other areas and it's my understanding that with those final regulations we're done and solve it had libor issue. is that correct? >> that's my understanding as well >> good.

people talk about inflation and they somehow say that it's a matter of the personalties and politics in the united states. others argue that the entire world is hit by inflation because ukraine and covid. i think we've got the answer to this question. in that inflation is considerably higher in the euro zone than it is in the united states today and it's very hard to say that joe biden is responsible for inflation in germany i commend the ranking member for bringing up the debt limit and the harm that's already done to our economy. if we solve the problem tomorrow we have less investment than we would have had yesterday and i would say that i commend the president. he's going to issue a budget plan tomorrow and perhaps in their time one of our republican colleagues can tell us when the republican budget plan will be released we are all eagerly awaiting it housing a huge part of

inflation. and it's -- we've left it to local government but the permitting process there guarantees scarcity, which guarantees high housing costs. mr. chairman, we've talked back in 2001 and several times even before that about wire fraud and having just bought a home, i saw the process up front everybody is very nervous about one thing, and that is will the buyer of the house be tricked into wiring their down payment to the wrong account or will the seller -- the buyer be tricked -- or the escrow agent be tricked into sending the money to someone other than the seller of the property we talked about this back in 2001, where i urged you, wit your fed now system, which i'm glad is on track to move

forward, to have what the brits have, when you send the wire, you identify not only the number of the account you're sending it to but also the name of the person or entity that's supposed to receive that. at that time, back in 2001, you said that pay matching is not the best way to do it, there are other ways to do it and you'd be happy to get back to me as to how you're going to make sure that an email from a nigerian prince does not get the wired funds, particularly in a housing transaction wired to an account number that turns out to be in l le legos. what progress do you have? when can they have a system to send it to a named system as well as a number. >> i hope we did come back to you in a timely way on that. it's a problem you brought to our attention over many years.

and we continue to focus on that >> the bureaucrats who are working on this don't want to do what the brits did they've proven it can be done. you said you were going to accomplish the same goal in some other way. and it has been awhile and it's not solved. nor are you aware of any solution i would hope you would go back and say we don't want to add this anxiety to every real estate transaction two back to the drawing boards, follow what the brits have done and have a payee matching. finally, as to crypto. cryptocurrency is what it means. hidden money that's what it means and if we impose know your customer and anti-money laundering statutes to it, it won't be crypto anymore.

what crypto wants is to have part of the ecosystem above the water line visible and subject to know your customer. and then have the rest of the iceberg below the water line -- >> the gentleman's time is expired. go to the gentleman from texas, mr. sessions, now recognized for five minutes. >> thank you very much chairman powell, thank you for joining us today we appreciate not only your professionalism but your direction. chairman powell, i know that the fed considers divergence as in you talked about it and spoke in your opening statement about consumer price index, personal consumer expenditures, inflation, gdp and all these things are talked about in your report, monetary report, march 3, 2023. thank you. a couple days ago, i had had an

opportunity to see that -- an economist art laugher, arthur laugher, produced a report that spoke about literally this country doubling gdp now i know we're putting cpi, pce, inflation, all these things into a mix but he said that if we made changes in health care to efficiencies we could double the current gdp rate my question to you, and i hope you can answer this, what do you think about that is that something that is in this document that i have missed and it's seemingly to a person who follows this as art laugher does for 50 years, what do you think is an important way to look at efficiencies in health care thank you. >> that's not in our monetary policy report, no.

i'll just say one thing, and that is, we do spend something like 1. -- sorry, 17 or 18 in that range percent of gdp delivering health care other similarly wealthy countries spend 10%. it's the delivery system, it's not the benefits are rich. it's just the delivery system are expensive. that's a trillion dollars a year we spend and get nothing for it. this is fiscal policy but i'm responding to your but i think he may have meant if we had a delivery system that saved that trillion dollars that doesn't get us anything, then that would be great for the economy. which i would agree with. >> you've spoken of supply chain disruptions because it, in fact, is an inhibiter or accelerator as we gain that advantage? you just talked about some seemingly which would offer some

validation to mr. laugher as he spoke about the huge importance of this. is that something you should start paying attention to to where policy people not only at the fed but your fed banks around the country would start looking at and putting pressure on us to gain those efficiencies, as result of a global view? >> so on supply chains generally, they have suddenly been tremendously important in inflation, as you know, for the last couple of years and for the first time really have been something that we've had to study carefully. in terms of health care delivery, that is strictly a question for you and for, you know, the parts of the government that are charged, whether -- the fed does not have a role to play and does not seek a role. >> and yet, as i look at this, you've got a role in projecting

conf confidence you've got a role in education a role in who's in in the work place. you've got a role -- my -- interest rates and yet my point is, it's such a staggering number that impacts us, just love to have you go back perhaps we from this committee need to give you some direction on that. but i think you've -- your testimony today, it recognizes the staggering impact on that. i don't think it's political the answer may be political, but i think the actual numbers are not political. it's an inefficiency that is happening across the country, not a regional matter and so, i wanted to get your take on that, and i appreciate you being here as always. thank you for your confidence and your hard work that you give this country mr. chairman, i yield back my time. >> we'll now recognize the

ranking member of the agriculture committee, mr. scott of georgia for five minutes. >> thank you very much, chairman and welcome back, chairman powell now chairman powell, listen to me very carefully here. i thinke verge of making a terrible mistake. back in 2008, if you recall, barney frank then and miss waters asked me to take a look and kind of work with you and the fed. you were a board member in 2008. and we came to the conclusion that we needed a more actionable playing feel between our large banks like goldman sachs,

citigroup, and our regional and smaller banks, like truist and our community banks. and we changed that. but now i hear that the fed and the fdic plan to drop a new rule, which seeks to the long-term and higher capital requirements that were created and you and i did this, back in 2008, and you'll remember. that were created for goldman sachs. and now we want to apply these rules to the regional banks. there's a big difference and we've omitted this difference if you proceed in this manner i think it's very misguided.

you were a board member. and we saw that we needed to have a better playing field to protect. and if you all go along with this, it could put many of our regional banks and small community banks out of business. so, i want you to reverse this first of all, tell me, am i speaking the truth are you all planning to all of a sudden here put the smaller and regional banks under the same heavy or financial load as your large worldwide banks? tell me. >> no, we're not planning that we believe strongly and always have in tailoring to address the different size and risk characteristics of financial

institutions and certainly, nothing like that for the regionals. they won't have anything like what the very large, most systemically important banks have in terms of overall regulation >> yeah, because i remember clearly, you and i were back, i think we were on this side then, talking about this in the same committee room and you worked with us on that i'm glad to hear that. where's that coming from i mean, it's a concern it's just a rumor? have there been any discussions about removing the playing field and the guardrails that we have here, the differentiations in the requirements between the regional banks, community banks, and your larger global banks there's nothing to that? >> well, i would say this. we're required by the law now

and we're doing this, dodd/frank required or suggested that we should tailor. and then the s-2155 then required it. and anything that we do will reflect appropriate tailoring. >> all right so, we -- that's off the board we're not going to change and put the smaller and regional pa banks into the same financial obligation role as larger banks? we got that right from you, correct? >> yeah, that's right. >> all right good now, let me turn to china. i'm really worried about china and right now, people may not know it, but china is the world's largest economy. in terms of purchasing power now, at our last meeting, i talked about this move, where we didn't blow the balloon up

and this is an example of what i was pointing out >> gentlemen's time is expired we'll now recognize the chair of the science committee, mr. lucas of oklahoma for five minutes >> thank you, mr. chairman chairman powell, i would like to follow up on the topic of capital standards. one of those things we've discussed many times together. as you know, commodity markets have seen significant volatility in the last few years. and during times of tremendous economic uncertainty, like we've seen, end users turn to the markets to hedge risks, particularly to those in the agriculture and the energy successors and i know that the fed is early in the review process of potential changes in capital requirements can you -- well, i'll ask anyway can you commit to ensuring that these changes will not increase the cost for banks, providing those commodity derivatives end to users >> i -- it's a really

specific -- can i go look at that -- i mean, i'm not exactly sure that the work even addresses that so -- >> fair point. >> i'll need to come back to you on that. >> fair point. and that particular response makes me feel better after all, these products are very important to my folks and make a great deal of difference in how they're able to address their issues. so, as you discussed earlier, and as you've consistently assured, the fed is not a climate-making policy maker. you and i have talked about this issue again many times in the past however, i'm concerned that the fed could be heading in that direction and could be laying the groundwork for climate-related stress tests that would reduce access to capital for the entire sectors of the economy this would also open up the federal reserve, potentially, to political pressure, and force the fed, in fact, to make policy decisions related to climate change we've seen, for example, this administration turn to regulators to impose climate policy as an alternative to the

legislative process. chairman powell, how careful are you in ensuring that the fed does not place itself into the climate debate and how can congress ensure that the fed's regulatory tool kit is not, shall we say, warped into creating a climate policy outcomes >> so i think we do have a narrow but real role there, around bank supervision, making sure that banks can understand their risks overtime from climate. i think my colleagues and i all understand that it's a tightly circumscribed role that we're playing in and we're not looking to move into an area where we're becoming a climate policy maker. i would completely agree with you, over time, that border needs to be very carefully guarded. and i will tell you that i will do that as long as i'm at the board of grngovernors.

>> i very much appreciate that it's a very important sector to the state of oklahoma. it's vital we resist the demands to do that sort of thing now or in the future. i very much appreciate that response and with that, i yield back the balance of my time, mr. chairman >> the gentlemen yields back the gentlemen from massachusetts, the ranking member of the digital asset subcommittee, mr. lynch, is recognized for five minutes. >> thank you, mr. chairman thank you, mr. chairman. and for your willingness to come here and to update us. last week the treasury department announced that leaders from treasury would begin to meet regularly with leaders from the fed and from the white house to discuss a possible cbdc, central bank, digital currency and other payment innovations. in the statement, it was mentioned, and i'll quote from it, it said that the fed is encouraged to provide periodic

public updates, as it continues its research and its technical experimentation on central bank digital currencies i was wondering, first of all, when you might be expecting to share some of these public updates? what's the timing on that? >> so we did go out for comment, in general, on the cbdc a year or so ago, and i do expect that we'll go out i can't give you a date, but we'll certainly go out and engage we engage with the public on an ongoing basis. we are also doing research on policy and also on technology. that's what we're up to. >> i'm aware of the -- the boston fed has a partnership there. the hamilton project over there with the folks at m.i.t., media lab, are doing a great job but, you know, it says here that the discussions would include technical experimentation.

i was just wondering, at what level are you talking about making decisions on architecture for a cbdc, a retail cbdc. >> we're not at the stage of making any real decisions. what we're doing is experimenting in kind of early stage experimentation, how would this work? does it work what's the best technology what's the most efficient. really at an early stage on -- but we're making progress on sort of technological issues the policy issues are equally important, though. we haven't decided that this is something that the financial system in the country would want or need. so that's going to be very important. >> right >> well, i think i speak for the chairman as well, we'd love to have more dialogue with the fed on that. and maybe bring in the folks from m.i.t. as well, and just make sure that congress and this committee is up to date as others let me switch over to fed now. there are some champions of digital currency and stable coins in particular that continue to site the need fo