of staff and served george bush extremely well. he is an american hero and a hero of the administration. >> host: the book is: "the quiet man: the indispensable presidency of george h. w. bush." we want to thank governor sununu for talking to us. >> defense secondretary carter talked about the fight against the islamic state. here is what defense secretary carter said at the house armed services committee. >> execution, however, is a two-way street and our training efforts in iraq have thus far been slowed by a lack of trainees. we simply haven't received enough recruits. of the 24,000 iraqi security soldiers we envisioned training by this fall we have only received enough recruits to train about 7,000 in addition to 2,000 counter service terrorism personal.

as i told iraqi leaders the united states is open to supporting iraq greater than we are we must see more commitment from all parts of the iraqi government. there are positive sides. i met with the prime minister, iraqi regional president and just last week with the speaker from iraq's parliament. they understand the need to empower more forces in iraq and address leadership failures. and because of the sovereign, multi secretarian iraq is more likey to insure a lasting defeat of isis the united states must continue working with and through the iraqi government in all of our actions. our efforts need to reinforce inclusive and multi terrorism.

not fuel the relationship with terrorism making the lasting de defeat of isis harder. the situation in syria is more complex because of a lack of partner and many competing forces there. regardless we will continue to strike isis and syria with the long reach of the airstrikes and operators. we will continue to work with syria's neighbors to impede the flow of fighters. our train and equip mission in syria has been challenging but the requirement for capable and motivated counter ground force means we must persist in our efforts. in conclusion i believe success in this campaign can and must be assure assured. it will take time on everyone's part the entire u.s. government entire u.s. coalition and most

importantly the iraqi and syrian people, together with your support were america's troops and families for which i and they are forever grateful we will achieve isis' defeat. >> up next, a swearing in ceremony with attorney general loretta lynch and then janet yellen talks about interest rates and jack lew testifies about interest rates and the economy later. live debate and vote from the senate floor hearings and current public policy events and every weekend it is booktv with non-fiction books and authors, live coverage of book festivals from around the country and a behind the scenes look at the

publishing industry. the best access to congress and non-fiction book c-span2. >> loretta lynch was officially sworn in as attorney general in april. using a bible that belonged to fredrick douglas she was formally sworn in by justice at the justice department. attorney general lynch is the first african-american woman to hold this position. >> please welcome our

>> ladies and gentlemen, please

welcome to president of the united states and the attorney general, loretta lynch. [applause] >> thank you. thank you, everybody. [applause] >> thank you so much. everybody, please have a seat. i was telling loretta backstage a little circumstance never hurts. justice sonia sotomayor is here. [applause] >> i want to congratulate deputy attorney general sally yates on her conformation. and i want to thank the elected

officials who are here today, the family and friends, colleagues at long last i am so proud to be here for the instillation of the 83 attorney general of the united states loretta lynch. [applause] >> we want to welcome loretta's family her husband steven hargrove. [applause] >> her father reverend lorenzo lynch. [applause] >> we want to say to ms. lynch as well thank you so much for your appearance. [applause] >> as i said when i nominated loretta in the country built on

the rule of law there are few perhaps no offices more important than that of attorney general. the person in this position is the american people's lawyer tasked with enforcing federal laws and making sure they are applied evenly and equally. that is the legacy of erick holder. we are grateful for his outstanding service. [applause] >> as one of the longest serving attorney generals in our history. i want to thank his wife, dr. sharon malone. where is she at? there she is. [applause] >> as attorney general eric was drive n by the belief that justice is not an abstraction. it is a real and tangigible way

the laws interact with daily life. she shares this belief bringing a wealth of experience to the justice department as a time when there is so much work to be done from keeping us safe from terrorist attacks, protecting our financial system safeguarding the environment, and upholding civil rights. and all of you at the justice department public servants that do incredible work day in and day out, could not ask for a better leader. she was born in segregated greensboro, south carolina raised by a fourth generation baptist minister and a school librarian both which don't seem to find speaking their minds. that is just my quick

impression. and more importantly, taught loretta the value of speaking up for what is right. as a young girl she went to the durham court house with her father and watch court proceedings and he will tell stories about her grandfather who tried to help everyone caught up in the laws of the jim crow doing so with a third grade education proving that no matter what the circumstances is we all have the power to make a difference in the lives of others. when she applied to work at the u.s. attorney's office and the fbi went to their house to conduct a routine background check her parents pulled out scrap books of her accomplishments and made the agents look through them. i am sure loretta was mortified.

and here is one of her old poems in third grade that won her a prize. i can picture the fbi agent sitting there, yes, ma'am. the agent later told loretta she probably wasn't a threat to america because if she were her parents would have documented it in some way. [applause] >> that is something i can appreciate as a father. so loretta sees the opportunities her family gave her to build a distinguished life in public service. after harvard law school she rose to be a strong prosecutor and spent years in the trenches battling terrorism and financial fraud and cyber crime. she went from the assisting u.s.

attorney's office in the eastern district of new york to chief of the long island office. long island in the house! [applause] >> and then u.s. attorney. she chased public corruption, she helped secure billions in settlements in some of the world's biggest banks accused of fraud. she jailed some of new york's most violent gang members and pursued some of the world's most dangerous terrorist and cyber crimes. the law is her land justice her compass. she is tough, firm fair but kind or intelligence and judgment and grace under fire earned the trust and admiration of those she works with serves and even though she is going up against. we are installing loretta lynch

today. it is not like she has been waiting around for the invocation. she hit to ground running from day one. she has already made her mark here at home and abroad because of her laser focus on the core mission of the justice department; the protection of american people. she understand the importance of improving the relationship between police communities and citizens. she understands the importance of criminal justice reform and that we have to be smart on crime not just tough. that is why she is committed to working as a partner with leaders of both parties who want to pursue reform that continues the trend of a falling crime rate and falling incarceration rate. she understand the importance of protecting the national security while securing our civil liberties. that is why she will safe guard

the programs that is critical to protecting american's lives and privacy. i see the fbi director is here and i know he is committed to doing the same thing. she lives out the words of one of our greatest attorney general's, robert f kennedy. the glory of justice and majesty of the law is not created just by the constitution, courts, officers of the law nor by the lawyers, but by the men and women who constitute our society, who are protectors of the law as they are themselves protected by the law. that is the story of our nation. our strength does not come from the words we have written on the page or the laws we put down on the books. it comes from ordinary citizens generation after generation, who do their part to uphold our founding ideas.

it comes from an unshakable faith in our ability to stand up for what is right and admit where we have fallen short and chose a better way forward. that was the cause to when loretta dedicated her life long before becoming america's top law enforcement agent. there is no greater partner in securing justice for all than our attorney general, loretta lynch. [applause] a

>> loretta elizabeth lynch please place your left hand on the bible of fredrick douglas. raise your right hand and repeat after me. i loretta lynch -- >> i loretta lynch. >> do solumnly swear that i will support and defend the constitution of the united states. >> that i will support and

defend the constitution of the united states. >> against all enemies. >> against all enemies. >> foreign and domestic. >> foreign and domestic. >> that i will bear truth, faith and allegiance to the cause. that i take this obligation freely. >> that i take this obligation freely. >> without any mental reservations or purpose of evasion. and that i will well and safely discharge the duties of the office on which i am about to enter. so help me god. [applause]

>> well, so much to say. so many people who mean so much to me. everyone here means something very special to me. and i thank you all. mr. president, thank you so much for your words, and your presence here today. to say that my heart is full is such an understatement.

one does not get to this place to this department to this theater or podium alone and i am no different. i owe thanks to so many who i am pleased to acknowledge. mr. president, thank you for your faith in asking me to lead the department that is the conscious of this nation that represents more than any other the fundamental promise of america of equal justice under the law. thank you, sir. [applause] >> justice sotomayor, thank you for your support here and over the years. you are an inspiration to me and countless young women who see in you a dream made possible. thank you so much.

[applause] >> thanks also to my good friend and colleague the deputy attorney general sally yates. she is a colleague and more than that a true friend. since our days as u.s. attorneys together it is an honor to lead this department with you and i thank you. [applause] >> thank you to all of you hear today. your strength and kindness have paved the way for all that i have been able to achieve and i thank you. and thanks to those who without this day would not have happened. all of those from so many affil affilations worked so hard on the road to my conformation. you harnessed to spirit of

public service and sisterhood to make this dream come to fruitition fruitition. [applause] >> i thank for your presence today and for my life and on this journey. and of course i must also thank my family for their steadfast support oversight and investigations -- over the months and others. my father who taught me to serve for others. my mother instilled in me a love of learning. her faith that a more just society was possible made me imagine a world without limits. a dedicated young minister who carried me on his shoulder to watch those not much older than i make history and a young

teacher who refused to let jim crow or anyone define her. their commitment to justice and to public service has been the inspiration for my life's work and why i dedicate this day, this event, and this achievement to them. [applause] >> i must thank my husband steve. my life partner and fearless champion who never wavered in support for my dreams and always urged me to fly. i have to thank my colleagues and friends at the department of justice. as we go forth, to implement the

laws that set us free and behind us together as a nation i would not have anyone else by my side as we work to preserve our national security and our cherished liberties. to make faith the world of cyber space. to end the scourge of modern day slavery and as we confront the nature of our citizen's relationship entrusted to serve. these are challenging issues and challenging times. even as our world has expanded in wonderful ways the threats we face have evolved and every day we seem to see abn increasing disconnect between the communities we serve and the government we represent. we see all of these things. but let me tell you what else i see. i see people speaking out in the time honored tradition that is made this country stronger. in their cries for justice i

hear the belief it can be attained. and they would not cry out if they didn't have faith we would answer. i see more. and our law enforcement quest for support, i hear the guardian call for tools to calm the water and keep the peace and comfort those who fear. our strength is to turn the challenges into great opportunities. many of the advances in equal and human rights come after periods of heart breaking loss but they come because we don't give in to the pools of retribution but we turn to the law. sometimes we forget this has never been easy. over 200 years ago, we decided what kind of a country we wanted

to be. we have not always lived up to the promises made but we have pushed every on and with every challenge we get a little bit closer. we have held the truth of the quality of all men to be self evident. we have have fought to maintain a government of the people by the people and for the people and we have followed a dream deeply rooted in the american dream. and at every turn when struggles threaten to tear us a part we turn to the law to reconnect ourselves with the highest principles and give voice to those fighting oppression and hope to those readdressing wrong and give meaning to the cry of never again and protect those who call us in the still small hours of the night when they are cold and frightened. these are our values and our beliefs and when we hold on to

them we do greatthi things. we have learned that ever generation must commit to the problems and make them real for to challenges of their time. this is how we have succeeded as a country and how we will meet the challenges today. if the ark of the moral universe does bend toward justice and i believe that it does it takes all heart and all hands to keep its path straight and true. my friends, i stand before you today, having been blessed beyond compare. i make these pledges to you here today. i pledge to you to lead this department of justice with integrity, honor and total dedication of the cause of

justice justice. to the people of the nation, i pledge your protection and legal rights are my sacred charge. to the law enforcement committee, i pledge this department will be your partner as we work to bring about our highest mission; the protection of the people of this great nation. and to all of my colleagues in this department of justice i pledge to always remember the place of justice is a hollowed place and continually strive to be worthy of the trust you put in me as we work together to uphold the constitution and serve the cause of justice. and to my family my wonderful family, i pledge to strive to continue to live up to the examples you have set. i make these pledges to and before you all upon the oath i have taken and the honor i hold dear. to everyone here in this room

thank you again for the trust that you have imposed in me for your faith, and confidence in me, and thank you for sharing this wonderful day with me. thank you all. [applause] ♪&%sm

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>> thank you for coming for today's ceremony. please come back it the department of justice and join us. [applause] >> two members of congress discuss issues before the house of representatives including the u.s. military strategy against isis the with drawl of troops from iraq, international trade, and the affordable care act. we will talk to missouri republican vicky heart a member of the armed services and attorney general committee and democratic member joe courtney. washington journal live at 7 a.m. eastern on c-span. >> on cspan, saturday night at 8

eastern we will talk to supreme court justice about gay rights, and sunday night at 6:35 an interview with presidential running ted cruz. saturday morning we are live for the annual roosevelt reading festival. we have sheila collins and mario manning on how books helped the moral of the military in world war ii. on sunday night at nine we talk about the need for a sexual revolution in the middle east with an author and on american history tv on c-span 3 we are live with the civil war's end and aftermath.

saturday morning with universities of california profestpro professor visits us. and sunday morning we continue beginning at 8:30 with gregory downs on the consequences of the civil war and later at 11:00 a discussion about treason and loyalty during the war with william blare. get the complete schedule at cspan.org. >> federal reserve chair janet yellen said the federal reserve will not be raising the taxes. she talked about greece and the global economy at the one hour news briefing.

>> good afternoon. today's federal federal open market committee reafirms the quarter percent target range for the federal funds rate. since the committee last met in april, the pace of drop gains has picked up and labor market conditions have improved somewhat further. inflation has continued to run below our longer run objective but some of the downward pressure on inflation resulting from earlier sharp declines in energy prices is abating. the committee continues to judge that is first increase in the federal funds rate will be appropriate when it is seen further improvement in the labor market and is reasonable cost of inflation will move back to its 2% objective over the medium term. in the meeting that ended today, the committee concluded these

conditions have not yet been acheefbda achieved. the committee will determine the timing of the initial increase on the federal funds rate on a meeting by meeting basement depending on the assessment of incoming economic information and outlook. let me emphasis the importance of the initial increase should not be over ppstated. the stance will likely remain highly accommodative for quite a time after the initial increase in the federal funds rate in order to support continued progress toward the objective of maximum employment and 2% inflation. i would like to review recent economic developments in the outlook. the u.s. economy hit a soft patch earlier this year.

real gross domestic product looked to have changed little in the 1st quarter. growth and spending slowed and mid exports were a drag on growth. part of this weakness was likely the result of transportation factors. despite the soft 1st quarter the fundamentals underlying household spending is favorable and consumer sentiment is remaining solid. looking ahead, the committee still expects moderate pace of gdp growth with continuing job gains and lower energy prices supporting household spending. the labor market data has shown further progress toward the objective of maximum employment but with a slower pace than late last year. job gains over the three months

have averaged about 210,000 a month down from 280,000 per month over the second half of last year. but still well above the pace consistent with trans-labor growth. the unemployment rate at 5.5 percent was unchanged from the reading at the april meeting the labor rate participation rate inched up. the broader measurement that includes individuals who want and are available to work but have not searched recently and people working part-time but would rather work full-time has continued to improve. but it seems likely that some cycle of weakness in the labor market remains. the participation rate is below

the estimates of the underlying trend and wage growth is relatively subdued. so although progress has been achieved, room for further improvement remains. inflation is continued to run below our longer run objective in part reflecting lower energy prices. energy prices appear to have stabalized recently. my colleagues and i continue to expect the affects of the transportation factors dissipate and the labor market improves further inflation will move back toward the 2% objective over the

medium term. survey based measures of longer term inflation expectations have remained stable. the committee will continue to monitor inflation developments carefully. this assessment of the outlook is reflected in the individual economic projections submitted to this meeting by fomc par participating. each one is based on the monetary process. for economic growth people participating reduced the projection in line with the disappointing data from the 1st quarter. the central tendency of the growth projection for 2015 is 1.8-2% down a little more than one half percentage point from the march projections.

the central tendency rises to 2.4-2.7 percent next year somewhat above estimates of the longer growth rate. the unemployment rate projections for this year are higher than march. at the end of this year the central tendency for the unemployment rate stands at 5.2-5.3 percent. a bit above people participating in the estimates of the longer run, normal unemployment rate. they see the unemployment rate declining further over the course of 2016 and 2017. finally, fomc participants project inflation to be low this year largely reflecting lower energy and non-energy input prices. the central tendency of the inflation projections is below one percent unchanged since march.

as the transtory factors holding down inflation abait the central tendency rises to 1.9 percent next year and 1.9 to 2.0 percent in 2017. returning to monetary policy as noted, we reaffirm the target range is appropriate. as said in our statement the decision to range the change will defend on the expected progress toward the objectives of maximum employment and 2 percent inflation. we continue to use measures of labor market conditions indicators of inflation pressures and inflation expectations, and reading some financial and international

developments. we continue to anticipate that it will be appropriate to raise the target range from a the federal funds rate when the committee has seen further improvement in the labor market and is reasonably confidant inflation will move back to the 2% objective over the medium term. we have seen progress on both fronts as noted. even so the committee judges that economic conditions do not yet warrant an increase in the federal funds rate. the committee reviews the disappoint disappointing economic performance in the 1st quarter as transtory my colleagues and i would like to see more decisive evidence that the moderate pace of economic growth will be sustained so the conditions in the labor market continue to improve and inflation moves back to 2%. once we begin to remove policy

accommodation, we continue to expect as we say in our statement, even after employment and inflation are near mandate consistent levels economic conditions may, for some time warrant keeping the target of the federal funds rate below levels the committee uses normal in the longer run. in other words, policy will be david dependented, economic conditions are currently anticipated to evolve in the manner that will warrant original gradual increases in the target federal funds rate. compared with the projections made in march, most fomc par participants lowered their paths to the federal funds rate consistent with the projections made for gdp growth and the unemployment rate. the median projection for the federal funds rate continues to point to the first increase

later this year. with rate rising to about one and three quarters percent of late 2016 and two and three quarter percent in late 2017. in 2016 and 2017 the median path is about a quarter percentage point below that projected in march. the median projected rate in 2017 remains below the three and three quarter percent or so projected by most fomc participants as the longer run value of the federal funds rate. even though the central tendency of the unemployment rate by that time is slightly below its estimated longer run value and the central tendency for inflation is close to our two percent objective. participant participants provided a number of explanations for the federal funds rate running below its

normal longer run level at the time. these included in particular the recidual affects of the financial crisis which will in hibit spending and credit for a some time. i would like to emphasis the path of the federal funds rate are conditional on participants individual projections the most likely outcomes for economic growth employment inflation and other factors. but our actual policy decisions over time will depend on the evolving economic conditions. accordingly, if the expansion proves to be more vigorous than currently anticipated, and inflation moves higher than expected than the appropriate path will likely follow a steeper and higher trajectory. if conditions were to prove weak

weaker than the appropriate trajectory would be lower and less steep. finally, the committee will continue its policy of reinvesting proceeds from maturing treasury securities and principle payments from agency debt and mortgage-backed securities. the committees sizable holdings of longer term security should help the longer term final conditions. thank you. i will be happy to take your questions. >> hi from the "washington post," as you mentioned, almost all of the fomc participants believe the first hike comes this year but two colleagues

believe 2016 is the appropriate time and the imf called on 2016 as the appropriate time and marth markets place a greater lift off in january than september. what is the misunderstanding here? what do they have wrong? why do you think waiting until 2016 is a mistake? >> well there are obviously a range of opinions both in the market and among committee members at this time on what the appropriate stance of policy is likely to be later this year and next year. but importantly, when the people write down their dots in the sep they are making forecasts about what unfolding data is likely to show. but the participants will all

be their views will evolve with unfolding data. for all of us the appropriate policy decision is going to be data dependent and all of us will be looking at incoming data and our opinions about the appropriate timing of normalization are likely to shift as we look at how the data evolves. differences in the appropriate assessments of the appropriate stance of policy in addition to reflecting different views and the outlook there are a set of risks that all of us need to weigh in judging on the appropriate time of the beginning of normalization. on the one hand waiting too long to begin normalization can risk significantly overshooting our inflation objective given

the lags in the operation of monetary policy. and on the other hand beginning too early could risk derailing the recovery we have worked for a very long time to try to achieve. and so we are trying to assist those risks. i want to emphasis sometimes too much attention is placed on the timing of increasing the rate. what should matter to the markets of participants is the trajectory of policy. and our policy decisions have to a a a evolve in what is happening in the economy. it is anticipated the conditions

will evolve in a manner that will make it appropriate to raise the federal funds rate gradually over time. >> madam chair, i wonder if you might character the progress made toward fulfilling the fed's true criteria. somewhat confidant? not confidant at all? some improvement in the labor market? a lot of improvement? and how should we judge when those criteria have been fulfilled? >> it is judgment the committee will have to make. it will depend on a large range of data and not on any simple indicators.

it is not as simple as saying if this declines at x it will be stable enough to increase. we have to look at the pace of job creation what is happening to labor force participation, to part-time employment for economic reasons, to job openings, to the pace of quits, to wage inflation and other indicators of the state of the labor market. i said we agree the slack has diminished to some extent and over a longer span of time. over the last several years, we have made progress in moving toward the goal of maximum employment. there is some progress on that front, but the committee wants to see further progress before

feeling it will be proposed to raise the rates. on inflation, there has been some progress in the sense energy prices appear to have stabalize stable stabalized. the big declines in energy prices came toward the end of last year and beginning of this year and they will not wash out of the inflation data until later this year. the fact the prices stabilized means the pressure from the source is diminishing. the dollar appears to have stabilized as well. it has been running under our 2% objective but declining import prices have been reducing that

pressure. my confidence will rise that inflation will improve and i expect that to put pressure on core inflation. >> thank you. john hilton from "the wall street journal." two questions, if i may. i want to ask you about a comment that the new york fed president william dudly made that in retrospect the feds should have raised interest rates more aggressively in the 2004-2006 sicklecycle. i wondered if you agree with that and if any lessons should be applied from them today.

and second a measure to audit the fed bill or object them to a progress rule. there is a shelby bill out there and i wonder if there is anything congress can do make the feds more affective and accountable. >> so on the first question you asked about about the rates rising and the feds indicated they would rise at a measured pace and that turned out to be 17 meetings with 25 base point increases at each meeting. previously we do not expect to follow any mechanical 25 bases points every other meet.

they will evaluate uncoming conditions and move in the manner we regard is appropriate. i think with the benefit of hindsight it might have been better to raise the rates more rapidly during the 2004-2006 six crisis. you asked about the feds and the shelby bill. the shelby bill has a title in it that addresses a number of issues pertaining to the fed.

i suppose i would ask what the problem is. we want to be an accountable for and transparent central bank. i think if you compared the transparency of monetary policy decisions in the federal reserve with other central banks we are one of the most transparent central banks in terms of information we provide to the public in a whole variety of ways. the feds are accountable and we work well as an institution. i am not certain what the problem is that needs to be addressed. >> thanks very much. dan from the financial times. my first question has to do with the use of the balance sheet and the suggestion that a short rate

should be a hike today from the lower ground before the fed continues considering ending reinvestment. i wonder if you could give more clarity on how the fed intends to approach the issue of ending reimbursements on its balance sheet and would you see any argument for a tapering of the investment to smooth the profile of maturity. and the second question we should expect to see this in the official statement. >> the balance sheet in the reinvestment policy was issued a normalization statement giving principles of normalizing policy. and what we said at the time was

that we expected to cease reinvestment after we began the process of normalizing policy. the timing depends on economic conditions. the committee does -- has not made further discussions about how to go about doing that so the president was expressing his only personal point of view. this is a matter the committee has not yet decided and i cannot provide any further detail and it is something we will be thinking about. you asked about gradual. in the sense you already have a

statement, the last paragraph of the federal market committee statement says the committee anticipates even after employment and inflation are near mandate consistent levels economic conditions may, for some time warrant keeping the target federal funds rate below levels the committee views as normal in the longer run. that is kind of a mouthful. i think the spirit of the sentence is consistent with my use of the word gradual and consistent with what you see in the summary of economic projection participants are projecting a lot of uncertainty. but they are projecting increases that average around hundred base points her year.

at this time the assessment that participants have over the economy jug to them that it will be gradual in that sense. >> madam chair if i could, given your discussions over the past two tay days, the state of the economy and improvement you have seen do you think it is likely we will see a late increase this year and to follow on that the comments from the imf and encouragement you got to hold off on raising rates until next year specifically they said

your colleague, madam laguard mentioned even though there is a risk of slight inflation, there was concern a rate hike could trigger market viability with consequences going well beyond the u.s. borders. how do you respond to that concern? are you factoring in the context for the decision making? and was it appropriate for the imf to make those recommendation recommendations? >> your first question about a rate increase this year. again, the committee tries to give an incudication in the summary of projections about how economic conditions will unfold. their best projections of that and what the appropriate policy will be given in light of those expectations. and clearly most participants are anticipating that are rate increase this year will be

appropriate. now, that assumes, as you can see, that they are expecting a pickup in growth in the second half of this year and further improvement in labor market conditions. we will all be making decisions that depend on the data we see in the months ahead. ...

>> >> the importance of the timing of the first decision to raise rates is something that should not be overblown whether september or december or march. what matters is the entire path of rates. the committee anticipates economic conditions to call for a gradual evolution of the fed funds rate to normalization. with respect to the international spillover cover this is something we are attentive to. we have to put in place a policy that is appropriate to conditions in the u.s.

economy but we cannot promise there will not be volatility when we make ted decision to raise rates or to do our very best to communicate about policy and expectations to afford it any type of needless misunderstanding that could create volatility in the markets and a potential spillover as well to the emerging markets and i have been trying to do that for some time to do my best to make good on that pledge. >> the associated press parker you talked about the fact you cannot promise there would not be volatility but there are two schools of thought that the fed learned from the mistakes which the temper

tantrum and you will telegraphed this so well that will limit its and the more pessimistic school of thought seems when you do start raising rates they have been low for so long it will make the temper tantrums a mild in comparison. which camp to follow? >> i think our experience mitt is hard to have confidence to predict the market's reaction to the fed decisions there have been surprises in the past prattled think the committee anticipated its decision would cause the temper tantrum but all i can say is that uncertainty in the markets at this point about long-term rates does not appear to be unusually high.

we can only do what is in our power of need this volatility to have repercussions for financial stability generally with the attempt to a communicator as clearly as we can about policy decisions but they depend on and what we've looked at. we will be responding to the incoming data. and it is clear the market is also responding you can see that in the daily market reaction to the surprises of the economic data. of course, none of us can forecast what that will be. >> your the latest economic projection shows the unemployment rate to evolve more slowly this year and more quickly next year.

can you talk about what is changed with your assessment ? >> productivity growth is a factor that affects the pace of improvement in the labor market productivity growth has been extremely slow the last couple of years. and the pace of improvement of the labor market that we are projecting reflects the notion there is likely to be a hiccup in the pace of productivity growth that is something that is uncertain and it is conceivable that productivity growth support something i hope we will not see because with those

implications of living standards to see substantial improvement in the labor market. but in addition those that don't show up in the unemployment rate with the participation that appears to be depressed to some extent because of cyclical weakness. the fact labor force participation rate remains roughly stable over the last year there is the underlying downward trend shows some slack is taken up of that impact of labor force participation and i expect that to continue and also to see improvement with the degree of part-time employment for economic reasons.

>> reuters. to your point madam chair to need for a decisive evidence to initiate the first rate hike how close you feel the economy is to that now? also that employer cost and monthly wages are at the six year high so how is a risk change that it could strengthen quicker than you are expecting? >> the committee estimates though long run normal level of unemployment rate is by zero or 5.5% with the unemployment rate that still exceeds the committee's best attempts to estimate what is a normal unemployment rate

for this economy. as i mentioned, there appears to be unusually large elements over and above that with that depressed labor force participation and part-time work for economic reasons for it is fair to say most members or participants would not judge a at to be at maximum employment. increases are still running at a low ripple but there has been some tentative signs of wage growth to pick up with an increase of the growth rate of the employment cost index with a growth of average hourly earnings with signs of strong for wage growth it

isn't yet definitive but that is a hopeful sign. but inflation not only headlines but to strip out of food and energy with core inflation runs the space objective -- the objective so greedy to see additional strength in the labor market to move closer to capacity with an output to shrink to have confidence that inflation will move back at 2 percent but we have made progress. >> market watch. turning to the housing market, of both french and house prices have been rising rapidly squeezing

americans on both sides. how comfortable are you with this and does the impact of monetary policy? >> the increase of house prices is restoring wealth of many households that is the major asset and it is an important part of the american household sector. for all of the households that were under water the house price increases are improving their financial condition all but the same time it makes housing less affordable for those who are looking to buy purpose same time housing overall is still a low level of mortgage rates it does remain affordable.

credit availability remains constrained for mortgages anyone who does not have christine credit-rating will find it very difficult at this point to qualify for a mortgage and i think we're seeing quite of did of reluctance with the job market and the history of what has happened to house prices for people who want to to buy homes for those who want the flexibility to move so the demand for multi housing is high and the prices are moving up because of that. >> i have a question on europe.

and every day it gets more likely so how do you know, the difference could it affect the u.s. economy? and when you decide to increase interest rates? >> unfortunately greece and its creditors face a very difficult and consequential all decisions at this point and in the days ahead. my hope is they will continue to work together to try to find a solution to the current difficulties. obviously the european leaders place great value on preserving european monetary integration and people have made clear it is important to remain in the euro area and it is a difficult

situation and. in the event there is not agreement by to see the potential for disruption that could affect european economic outlook and global financial markets. through trade and financial with each markets that is spillovers to the united states. >> i would like to come back to consumer spending for gore has ben very

disappointing for many months. i am wondering to you think there has been a meaningful shift to persisted in the behavior of households with respect to spending and saving or are you more inclined to look at a retail sales figures with a return of the american consumer. >> we have received data that suggest consumer spending is growing at a moderate pace. i would say car sales were very strong but nevertheless the pace of car sales with

retail sales and spending on services to suggest improvement through questions at this point about how much impact we have seen of lower energy prices on consumer spending with the decline of oil prices touche translate with the improvement of household improvement of $700 per household with that response and it is hard to know this point that reflects a cautious consumer that is eager to add to savings to

work them borrowing or to survey the evidence that the consumers are not yet confident with the improvements they have seen to spend for energy for gasoline that would be permanent they may think it is a transitory change and not yet have responded so the jury is out there but we have seen a pickup in household spending. >> fox business. a shift to the decision of the aig case the judge said '' there is nothing in the federal reserve after any other federal statutes to permit the federal reserve bank to take over private corporation to run its business as if the

government were the order by yet that is exactly what the bank out of new york did and it went to cite the replacement of a.g. ceo and to take control of business operations. did the fed to break the law to resist aig during the crisis? and if the decision is upheld on appeal how does that affect the federal toolbox to help firms in the future does it make that assistance to legal or do they have to change the law to make a fix? to read the federal reserve strongly believes its actions with respect to ag in 2008 were the goal and proper and necessary given

the disorderly failure of that company with so likely implications for the economy and the flow of credit and businesses in the economy and we believe the terms of that intervention were tough and appropriately so to protect taxpayers from the risks that those rescue lowe's presented at the time they were made. i shed emphasize that dodd/frank changed our authority to say that the federal reserve may in a future crisis may not intervene to attempt to

redress the issues of a particular company. at the same time it gave the government has set of new tools that we could use like the agees situation or lehman brothers to try to resolve such a situation to pose systemic risk in the orderly way. at this point the federal reserve under dodd/frank, if necessary with the future crisis to engage in the broad based programs similar to what we had in 2008 to provide support for the asset backed securities to enable small businesses to

students and credit cards and credit throughout the economy to support the issue of commercial paper. at this point i believe we're working with the department of justice to decide on the neck steps -- and next steps. >> so much discussion about rising rates with the potential negative and and many may be anticipating it a positive way. >> so in my mind the most import - - the decision to raise rates would signify

very clearly the u.s. economy has made great progress to recover from the trauma of the financial crisis and hopefully that would be confidence inducing for many households as of course, this has been a very difficult period. many retirees and i hear from some almost every day that are suffering that they have anticipated obviously this is the adverse consequences of a period of low rates. at the levels that we have

to pursue the of goals of maximum employment and price stability to every household including from having a better job make a market and a secure economy but yes yes, when the time comes to raise rates. >> just to follow up people on fixed incomes but what kind of assurances that they will never raise rates?

what kind of assurance can you give for that to happen in? >> i cannot guarantee ironclad promise the from those projections that we anticipate the economy will all grow into the labor market to improve its inflation will move up that 2 percent the objective over the medium term with those conditions unfolds we see that as appropriate to raise rates that those conditions should be in place later this year that might not have been it is not the

ironclad guarantee but we anticipate to the appropriate later this year. >> dow jones. could you shed additional light how operations will be in their initial phase? . .

it is our expectation and plan that we will reduce the level of the overnight rop facility and we have a variety of ways in which that can be done. with respect to market reaction we always in evaluating the economic outlook have to take account of financial conditions whether it's the level of long-term interest rates or the value of the dollar's in assessing the economic outlook. to outlook. to the extent that there are market reactions and market movements to whether they are in reaction to decisions

of hours or reaction the other event we we will always take to the. >> you back steve back there. good to see you. you mentioned that the dollar stabilized. since mid-march it has given up a good bit of its gains from last summer. to what extent do you think there will be an ongoing drag's from the dollar taking into account the style retreat. >> i think we still are and

have seen an appreciable increase in the value of the dollar is the most of our trading partners. it is a significant appreciation. i think we have seen that it has had a negative effect on net exports and so served as something of a drag on the economy and problem that drag is going to continue for some time to come in addition import prices for nonoil imports continue to fall pushing down core inflation. eventually i expect that impact. it is a factor affecting the

outlook. that said -- that said we have no targets. we we take movements and the dollar and economic impact as one of many factors affecting the outlook and in spite of the appreciation of the dollar the community of these and thinks that the economy is likely to do well enough to call for some tightening way this year. >> john hellmann with american banker. last month's senator elizabeth warren and congressman elijah cummings sent a letter to the jl asking about an inquiry into that and other regulator implementation of the community reinvestment act. the concern being cia has implemented is not giving

blighted communities like baltimore and other places enough access to basic banking services. do you think the fed is doing everything it can to give access to those communities? 's do think it needs to be doing more? >> we take cra very seriously and evaluate for those things that we supervise. we have a set of guidelines and a very conscientious in attempting to evaluate performance is something we take into account in assessing applications that we received from mergers and have very active programs to try to bring together community groups with banking organizations such as to try to provide them with information about how

they can assess community needs and best address the. but we are looking at cra and continue to look to see whether there are ways in which implementation can be improved. >> thank you very much. >> up next, next, treasury secretary jacklin testifies about financial regulation and the state of the us economy.

as he navigated the turbulent end to the civil war. this sunday night at 8:00 p.m. eastern influence and damage's. from martha from martha washington to michelle obama

sundays at 8:00 p.m. eastern on american history tv. >> the committee will come to order.

this hearing is for the purpose of receiving the annual testimony of the chairperson of the financial stability oversight council. i now recognize myself for five minutes to give an opening statement. when democrats 1st past the dodd frank act they claim the financial stability oversight council is one of the scoundrels. f sock would now be able to clearly identify risks such an take action before emerging threats metastasized into another and another crisis. a fatal flaw was always a failure of dodd frank supporters to recognize that among the greatest threats to washington policies including those of the very agency heads that sit on the council. fc -- fs oc oc simply refuses to look in the mirror conspicuously omitting references.

a greater risk-taking across the financial system is encouraged me at the council refuses to identify this risk. the council warns of increase liquidity it never acknowledges that have drastically reduced liquidity failing to mention dodd frank amplifies the threat then that requires the profound threat recently identified by the federal

reserve bank of richmond. 's. hard-working taxpayers are now on the hook for a a staggering 60 percent of the liabilities of the entire us financial system's. the council turns a blind eye the other threats barely receiving a mention and it gets worse, unsustainable national debt, 18 trillion counting perhaps one of the greatest existential threats that we face. more debt incurred under this administration that our nations 1st 200 years totally ignored. this is beyond negligent beyond egregious and dangerous and defensive. the growing permission is any meaningful reference to economic growth or lack of

it. along with obama care dodd frank is at the center of the ministrations economic policies. as we approach the 5th anniversary. >> he disclosed weakest recovery in the postwar era and economic recovery that is created for .1 million fewer jobs has provided $6,175 less income for every citizen compared to the average postwar recovery. again, compared to the average we see an economic recovery that is left 4.6 million fellow citizens mired in poverty. apparently can find no link between economic growth and stability on the side of the atlantic. also nowhere to be found in the council report is that the opposed to our stability, growth, and personal freedoms posed by the erosion of the rule of

law. our president seemingly never tires of admonishing us is that he has a pan am phone. regrettably never seems to have handy a copy of the constitution. as americans become less governed by the rule of law and more governed by the whims of washington the unaccountable and unelected including the financial stability oversight council which operates largely out of public view yet his decisions of the potential

to profoundly altered lives and livelihoods of every american's powerful government administrators publisher. when it comes to systemic risk washington is a large part of the problem. now recognize the ranking member for five minutes. >> thank you, mr. chairman, back. today we received the annual report of the financial stability oversight council as required by law. this year marks the 5th anniversary of the enactment of the dodd frank wall street reform and consumer protection act. hard to act. hard to believe's and was

five years ago we were coming to grips with the magnitude of the financial crisis which cost the greatest loss of wealth in a generation. all told the financial crisis cost our nation more than $13 trillion in economic growth and 16 trillion in household wealth, not to mention the devastation of an unemployment rate tough a 10%. in the lead up to the gross is nobody in the private sector or in government is looking at the stability of our financial system. nobody have a responsibility to deal with emerging threats before they cause damage to our economy. that is why we created the financial stability oversight council as part of dodd frank. looking in every aspect of our financial system command

it serves as an advanced warning system to identify and address systemic risk posed by large complex companies, products, and activities before they threaten the economy. the council has insured for the 1st time that our financial regulators are working collaboratively to identify and respond to emerging threats to financial stability's. with the announcement outlining enhanced engagement opportunities for public input they have double their efforts to engage with the industry and congress in a transparent. in this 2015 annual report the f sock knitters substantial progress to protect americans from another crisis and indeed if taken important steps to prevent if discovering

oversight gaps in our financial system by designating complex interconnected and reforming key markets like asset-backed securities and money market mutual funds. however, five years after dodd frank became law's mouth was in college earning fighting the battles of the past. the financial system would magically unlock growth in the market would suddenly police itself. they continue to ignore the lessons of the last verses by doing all that they can to undermine fsc. focusing merely on the college of the other side of the aisle. aisle.

congress' ability to focus on the knew, emerging threats to financial stability identified in the 2015 annual report. like the consumer financial protection bureau fs oc has become a a leading component of republican deregulatory agenda's. finally waste countless hours working to undermine engines of job growth in america competitiveness with the export import bank they make it possible to shut down and just five legislative days. whether to renew a proven job creator republicans are wasting their time and countless document requests and inquiries from an obvious effort to undercut ability to protect homeowners consumers, and the american economy. so welcome and thank you for your resilience in the face

of efforts to stop the council's important work. i would forward to your insights. i hope to learn more about what fs oc is currently going to monitor's for risk and promote financial stability. additional details i we will be interested to hear whether republicans believe fs oc should take any action to address systemic risk or simply wait for another crisis. crisis. thank you and i yield back the balance of my time. >> the gentle lady yields. today today we welcome the testimony of the honorable jacqueline. testify before community on previous occasions. welcome. we're happy to have you back without objection your written statement will be made a part of the record.

you are now recognized for five minutes to give an oral presentation. >> thank you for having me today and for this opportunity to testify. i would like to begin by recognizing we are a few short weeks away from the five-week anniversary of the enactment of wall street reform the creation of the council. as we approach this milestone it is clear that have made this more safer and resign. wall street reform has been protections in place. small small businesses that need access to credit and working men and women trying to save for children's education, down payment on a home with her retirement. wall street reform is worked five years ago the council was created to be a a forum for the entire financial regulatory community to come together to identify and

respond to potential threats today the council is doing exactly what congress decided to do for asking the tough questions that will make a financial system safe are the shining a light on emerging threats before they can involving the next financial crisis. moreover the council's moreover the councils member agencies were collaboratively leverage the expertise. the council has also established track record of conducting work and open-minded and deliberate manner. the council asks hard questions. before discussing this year's report i want to emphasize what you general report is important. provides transparency about the council's work. each report covers a range of issues based on extensive data-driven analysis.

current risks and emerging threats along with recommendations for specific actions to mitigate risks. the findings the findings and recommendations set down a marker for action and a roadmap to your head providing congress and the public a way to hold the council accountable for making progress. the report highlights the councils recent work and demonstrators continued commitment to openness and good governance. for example this year's report highlights highlights a series of initiatives including enhancements to the councils transparency policy supplemental guidance and ongoing engagement with the public focusing on 11 key areas many of which have

been reported. these include the potential incentives for greater risk-taking, the need for continued progress in the continued reliance on short-term wholesale funding. for each of these areas the report highlights were progress has been made's and where more needs to be done. the financial sector has been a leader of other industries adapting cyber security measures and still we have seen several incidents affect the largest prize substitutions and community banks or form the bedrock of the financial system. strengthen best practices. i commend the committee for focusing and we look forward

to working with congress. this year's report identified several new potential risks which the council and member agencies will monitor. the council will pay heightened attention to ongoing regulatory efforts will bolster the resiliency of central counterparties season three. the market structure across asset classes and market function efficiently. the council recommends continued vigilance and the extent of the impact of market function. promoting financial stability and protecting the american public for the next financial crisis should be a

common objective that we all support. yet opponents continue to advocate rolling back these protections including the ability of the council and member agencies to respond to future threats to financial stability. as the council for report demonstrates threats to financial stability the marketplace.

we simply cannot let our guard down. i want to thank the other members of the council and all our staff involved. as we approach the anniversary we will continue to work with this committee to continue addressing these threats and promoting the strength and stability of the us financial system. thank you, and i would forward to answering any questions. >> the chair now yields himself five minutes for questions. i alluded to it in my opening statement, but by chance are you familiar with the bailout from a report of the richmond fed? >> i have seen it. i'm not sure which one you are holding. >> am sorry? >> have seen it, but i'm not familiar. >> you have reviewed the document? >> unfamiliar with it. >> your familiar with the fact that it indicates there have been increasingly implicit guarantees of the crisis. >> i understand that that is the amount that is on a peace of paper. it's. >> do you have any reason to challenge that? >> look, if you look at the experience we have had we have seen -- >> i'm just asking -- >> i have not looked at that peace of paper i can give you my response. >> let me quote from the report. $26 billion according to the richmond fed in explicit and implicit federal backstop the. one of the final conclusions of the report is that it is

essential to restore market discipline and achieving financial stability to shrink this federal safety net. >> i net. >> i don't want to comment on a report i have not read. do you believe it is important to achieving financial stability to shrink the size of the government federal safety net? do you believe that the extent of the federal safety net's should be shot?

for reform in the area of gse. >> can i take that as he is? >> you don't have to look at the report. >> the agencies themselves. we can also agree that of the ten voting members i'm

not read the entire report. identify emerging threats to financial stability. can you.to any page airport they identify a policy will? we can't find it. >> we identified the threat. many have a connection to federal policy. >> you also have the mandate to make recommendations. how you make a recommendation if you can't cite a source? >> it is not my view that the regulation is a significant risk.

>> increasing evidence that we are suffering greatly liquidity in a corporate bond market. this report cites it. we know that the midmarket companies poured cash. the our jobs and economic growth. many many economists believe this will be the source of the next financial crisis. somehow the thin red can connect this on illiquidity to the vocal. sec commissioner randel your cftc commissioner the treasury larry summers' enthusiasm for keeping it institution safe.