very carefully. >> whatsit the chance of u.s. economy be in an recession by the end of the year? >> i think it is quite low. i think the u.s. economy is doing well and otherwise indicated that we are watching this recent slowdown in the job market carefully, my expectation is that the u.s. economy will continue to grow and we have seen it pick up of a superstrong pickup in consumer spending and growth in the economy. if the weakness in the labor market the last couple of months was a reaction to earlier slowdown in growth, that looks to be reversing. i remain quite optimistic in the kinds of conditions that have been associated in the past with u.s. recessions, often that occurs when inflation is the economy is overheated and inflation has been quite high the fed has had to tighten monetary policy. we do not have any such

conditions until now. households are much improved shape and while there are negative influences in the economy, particularly in manufacturing stemming from slow go to broad the low dollar commodity prices, very seriously depressing causing job loss in the energy sector and slowing investment and growing, still overall the u.s. economy is progressing even with those negatives and i think the odds are low, it's really not what i would expect. >> thank you for your answer, a week ago friday think your ten year yield on japanese bonds and also on german bonds were negative. what impact does that have on the treasury yields with these investors, obviously looking for any kind of return to buy up our treasury bonds, what kind of

impact is that going to have unarguable? >> it does tend to increase capital inflows into the united states which push down our treasury yield source is considerably higher but in absolute terms it is really quite low. differentials in the stance of monetary policy also put impacts on the value of the dollar, the dollar has gone up around 20% against a broad basket of currencies since mid- 2014. and that has had a negative effect on our trade with the rest of the world and put downward pressure on hiring a manufacturing. >> are you concern of the fed submit raise rates that bond traders will ignore that reversing what you're trying to achieve by raising rates? >> i think one of the factors that goes into the influence of

pricing if this is what you're referring to is that the anticipated path of rates and there some further increases built into market expectations and often the response of markets to what we do depends on how our actual actions compare with those expectations. >> thank you. >> thank you mr. chairman it's good to see you again. i want to follow up on questions raised by senator corker and senator revere. as you know, dodd frank requires giant financial institution to submit livingwell documents that describe how these giants could be liquidated it in orderly and rapid way. in bankruptcy without either bringing down the economy or requiring a taxpayer bailout. a few months ago the fed and the fdic jointly determine the livingwell submitted by five of the biggest banks in the company

were not credible. those banks must resolve the problems identified in the living wills by october 1, that's 14 weeks from now. if the banks failed to do that, the fed and the fdic have the power to reduce the risks posed by these giant banks by for example raising capital standards or stricter leverage. these changes are critically important to avoiding another 2008 crisis. but the banks are unlikely to make them unless they believe that the fed and the fdic are serious about enforcing dodd frank. now i know by law you must consider increasing capital in higher level ratios. what i want today is to ask, can you commit that if any of these giant banks failed to resolve the problems in their living wills by october 1 that the fed will use the tools that congress

gave you to reduce the risks posed by these too big to fail banks? >> we would have a very serious review of the living wills and we have clearly stated a set of well identified changes that we want to see by october 1. now the decision about what we do if those deadlines are not met, those are decisions that my colleagues and i will need to look at very carefully, what is the appropriate sanction for doing that, but clearly we are very serious about wanting to see these deficiencies remedied and well aware that we have at our disposal the tools that you listed. so i cannot pre-commit today to tell you precisely what our response will be and we will work closely with the fdic as we

have been all along, but we are extremely serious about wanting to see progress and certainly we will consider using those tools. >> so you are required by law to consider them, what i'm asking for is a commitment. commitment. i have to say, i don't fully understand why you would make that commitment. these banks have known this is coming since dodd frank was passed in 2010. that is six years ago. they have been. they have been submitting living wills since 2013. there is no provision of the law for all of the extensions that you have given them so far. if any of these banks failed the credibility test on the fifth try they need to face some real consequences. otherwise why would they ever make changes if there are no consequences. >> will there will be consequences. >> well i very much hope so.

when he found that these five things submitting living wills that were not credible, you said quite explicitly that each of these banks remain too big to fail and that if any one of them crash they would risk taking down the whole economy unless they got a government bailout. the entire goal of the liminal processes to push the biggest banks to fix this fundamental problem. i am glad that the fed finally determined that some of these living wills were not credible. it is not going to mean anything if you're not willing to use the tools that congress gave you to force these banks to reduce the risk they are pushing off onto the taxpayer. i have a second issue to cover here briefly. then i want to follow up on senator brown and senator menendez question about diversity. i think diversity is very important. there is a growing body of research showing for example

that gender diversity and leadership makes for stronger institutions. perhaps it is not a coincidence then that there is a stunning lack lack of diversity at her biggest financial institution. not a single one is led by a woman. while the fed's leadership is somewhat more diverse, it's not a lot better. of the 12 regional fed presidents, tenormin. as you know, congressman and i along with hundred 20 park collects sensual letter a few weeks ago about the lack of diversity among the fed's leadership. i appreciate the response you sent us last week in which you acknowledge that greater diversity can help improve the fed's decision-making and that there still work to be done to improve diversity among the leadership. let me start by asking, does the lack of diversity among the regional fed presidents concern you? >> yes. i believe it is important to

have a diverse group of policymakers who can bring different perspectives to bear. i think as you know is the responsibility of the regional banks class. see directors to conduct a search and to identify candidates. the board reviews those candidates and we insist that the search be national and that every attempt be made to identify a diverse pool of candidates. we monitor those searchers while they are ongoing to make sure it's been done. >> but then let me just ask you about the outcome. because just as you said under the law when a new regional fed is selected by the regional board, that person must be

approved by you and the others on the board of governors before taking office the fed were recently reappointed each and every one of these presidents without any public debate or any public discussion about it. so the question i have is if you're concerned about this diversity issue, why didn't you use either of these opportunities to say enough is enough. let's go back and see if we can but a qualified regional president who also contributed to the overall diversity of the fed's leadership. >> so we did undertake a thorough review of the reappointments of the performance of the presidents and that is the board of governors have oversight of the reserve banks. their annual meetings between the boards bank committee and the leadership of those banks to review the performance of the

president and there were thorough reviews. >> by your tell me diversity is important yet you just signed up with all these folks without any public discussion about it. i appreciate your commitment to diversity, i have have no doubt about it, i do not question it. it just shows me the selection process for regional fed presidents is broken because the current process has not allowed you and the rest of the board to address the persistent lack of diversity among the regional fed president. i think congress should take a hard look at reforming the regional fed selection process so that we can all benefit from a fed leadership that reflects a broader array of both backgrounds and interest. thank you. >> thank you mr. chairman. thank you for being here today and i thank you for your hard work on behalf of all of america and

frankly you have a difficult task and one that will not be any easier before the year is out from my perspective. i did find it quite interesting the opening comments of my good friend, the ranking member mr., senator -- from ohio he seemed to suggest that the failure of the economy somehow dress on the shoulders of my party. i thought to myself that the american people are not really looking to assign blame for why the economy is so anemic in the so-called recovery hasn't truly reache into those folks living paycheck to paycheck. it would be easy for them to remember that at the beginning of the so-called recovery that the democrats control the white house, the senate, and the house until early 2011 what did they do with that trifecta? they created the most onerous regulatory stage in the history of our country.

it continued until even last year when the administration proposed 80000 plus pages of new regulations according to the competitive enterprise institute within economic impact or cost to the economy of $1.85 trillion. said differently, this anemic recovery, perhaps as anemic because the precatory burden created during the first couple of years. i would suggest to the people in my home state of south carolina were working paycheck to paycheck do not believe that we are actually having a strong recovery in the number seem to bear that out. first-time homebuyers down for the third consecutive year and that disproportionately impacts african-americans who have a home ownership around 45% so the challenge continues, the economy grew the first quarter by 1.1%.

we saw a real income sense declined by 65 6.5%. americans eligible for and using food stamps is up over 20%. last month we saw 38000 jobs created in our labor force participation late rate in 2007 was seven was 66.4%, 2010, 64.8%. you have to stop and say god bless you some of sneeze, is that okay with you sir? and in 2014, were have an for now. is this is fun topic. and 62.4% and 62.6 percent. i'll suggest that the numbers themselves bear out the fact that perhaps the in the make

recovery is not a recovery folks working paycheck to paycheck. i do not know who is to blame but i can tie the american people want solutions more than plain. my question to you is as you look for the rest of this year, do you anticipate more for the job creation numbers that's 38000 in the same month where we celebrated 4.7% unemployment rate only because 400,000 people stop looking for work so when you take a real unemployment number based on the 2007 labor force participation rate we would be at 9%. >> so we do expect further improvement in the coming year. the unemployment rate the unemployment rate fell substantially over the last year