need a robust plan going further. we must work together to prevent the loss of these critical weapons against disease. so i'm very happy to answer any questions. >> i'll recognize myself for five minutes. dr. wood corks yesterday fda commissioner posted a blog post titled fda's take on executive order national strategy combat antibiotic resistance. she wrote few issues are as critical or time urgent as combatting the growing threat of antibiotic resistance. it's a high priority for fda to work with our partners to find solutions for this serious public health problem, end quote. would you explain the urgency of this situation for public health and national security? >> as many members have already stated for public health we're already seeing excess deaths and

we're seeing people who, in fact, cannot be treated with any existing therapy that we have. and i think the threat here to public health is we can have emerging epidemics of these organisms if they will spread. right now they are fairly limited and sporadic but they will spread and we'll be in a situation where we literally can't treat an infection that is unfolding in a wider sense. in addition each year we're seeing greater and greater resistance problems for ordinary microorganisms. so doctors are turning to second or third line anti-microbial agents, agents we used to reserve for very selected situations. and as that occurs more resistance to those will evolve and so eventually we'll be empty handed. >> in the case of antibiotics

even slight variations in the bacteria's genetic makeup, can be the difference between a drug working or not working. understanding that back terry all resistance compounds this problem many times over y-is it important for our antibiotic drug plain that we have multiple drug options for the same class or family of drugs? >> yes. well, what we know when we develop an antimicrobial evolves over time after that antimicrobial is used. and after time it may be that it can be effective against certain forms of an organism and not against other more resistant forms. the mechanism of resistance is different. there are many different mechanisms of resistance. that's why having large number of drugs in a class or even improvements in the class can be extremely helpful in this situation because you can match the antimicrobial to the organize jannism you're trying

to treat. >> do we have the type of drug redundancy highlighted above that we need to effectively combat this problem right now? we do not, because it's sort of the cutoff line, the anti-microbials that are no longer useful against many infections is getting higher and higher every year especially for certain types of bugs. >> do you believe that we need to further incentivize new drugs if we'll address the issue of antibiotic resistance and if so what do you recommend. >> i do believe we have to incentivize it. it doesn't appear that it might not be a loss to business. that there isn't an attractive

enough business model to build those robust programs that are needed to both discover and then develop new classes of anti-microbials. for diagnostics, i will tell you that louie pastuer and alexander fleming would recognize the methods we use today because they invented them. so there's a lot of room at the top for improvement. we're using genetic sequencing of human genome which is huge compared to the microbial genome but used in clinical practice of advanced methods is not the norm and that improving diagnostics. >> could it be used in other unmet need areas than just

beyond antibiotics? >> well, of course i believe that that is possible. however, as i think mr. waxman said there are tradeoffs. you have to balance -- there are always tradeoffs in putting these incentives in place and being a physician and scientist i'm not the most qualified person to make those tradeoffs. i think congress has to weigh those. i can tell you that the urgency, public health urgency for this problem is severe, and will continue and i think you'll hear that from other experts as well. we're not over the hump here. we have not succeeded in developing a system that will continue to generate effective new microbials. we don't have that. we have sort of heroic efforts here and there. >> thank you, dr. woodcock. my time has expired. thank you, mr. chairman. both the executive order issued

yesterday in the report of the president's council of advisors on science and technology emphasized the danger of antibiotic using agriculture industry and while it's clear we should do more to encourage greater research and development of new drugs it also makes sense we should be investing in efforts to limit the further spread of resistant bacteria strains. so, dr. woodcock, in your testimony you point to fda's cooperative effort with cdc to promote greater stewardship including the get smart campaign i want you to elaborate on this role. >> well, obviously, there needs better stewardship both in human use of anti-microbials as already has been said, about half cdc estimates of anti-microbial outpatient prescriptions are not necessary

given the condition a patient has and that leads, especially if people only take the drugs for a little bit, kit lead to big problems. and also in the animal world. now in the human area fda is collaborating with cdc on these efforts but cdc is primarily the lead on improving better use in health care and that's a multi-faceted effort. in the animal health space, fda had put out a guidance, center for preventsive veterinary medicine to cease continued use of important human anti-microbials for growth promotion in food animals and they have secured the cooperation of the, all the manufacturers who are engaged in that space to my understanding and then there's a process whereby those indications are withdrawn and then use in food

animals would be required under the sue per vision of a veterinarian. that would be a great improvement. also as was discussed in the report yesterday, though, we need better surveillance and data to understand the link between anti-microbial use in animals or humans and the development of resistance. that's still rather poorly understood. >> all right. thanks. i wanted to get fda's views on certain aspects of the adapt act. as i understand the purpose of the bill's goal is to facilitate fda's ability to approve new antibiotics that have been tested in a limited population and for which the need for the drug is critical. i know you do approve drugs for limited use like drugs for rare diseases. why they are not meeting the current need and also like you to address whether you believe the adapt act is currently

drafted provides fda sufficient authority to ensure adapt anti-microbials will be labelled in a way that distinguishes them as different from other anti-microbials. it seems if we're considering allowing drugs on the market tested in very limited clinical trials we need to be confident that providers and patients understand the care in which these drugs must be used. >> yes. well, we think the adapt act has elements that we have been discussing for a long time. let me explain some of the situation. we approve drugs for limited population all the time. orphan drugs, rare subsets. but generally speaking the clinical community is not tempted to use those for somebody with a cold. right? it's for some rare enzyme deficiencies or rare cancer. with anti-microbials the big problem really is the use of outside of where it would

clinically be indicated, and one of the barriers for these higher resistant organisms is the occurrence is sporadic. we're very lucky that they are not widespread outbreaks, right. but because they are not widespread outbreaks it means the testing of them in broad populations is difficult. and actually that's good news because otherwise we would really be in trouble, all right, if there were large numbers of people suffering like this. so that means by definition if you're going to get these drugs on the market for these small populations of resistant organisms you have to have small trials and you'll have more uncertainty about the effects. so, more uncertainty about the effects, worry that they will be used in conditions where it's not warranted. those are the two issues we're trying to address. in orphan conditions, yes, there's uncertainty about the

effects. but the orphan community that uses these drugs usually those are subspecialists who are treating a very rare disease and have a very good understanding of what the study was done on the drug and so forth. it often may be the only drug ever studied for that condition. so, our thoughts and we have the administration has not taken a position on this but we have thought about this that to offer very small development programs is a big incentive, but the quid pro quo is to send a signal to the clinical community, you know, some kind of signal, some kind of message that this is special, there's more uncertainty and also really good, use good stewardship about this particular product because using it in a lot of conditions where it's not warranted would also more rapidly increase the development of resistance. >> thank you. >> chair now recognize gentleman

from georgia dr. gingrey, five minutes for question. >> mr. chairman, thank you for recognizing me. i know that vice chairman of the subcommittee, my colleague, burgess was scheduled to go next. thank you for letting me ask my questions now. dr. woodcock, thank you too, as a witness, we had you before our committee many times since i've been on the committee, and you're just always so straightforward and you explain things in a very clear way and i mean that sincerely. you do a great job. and we appreciate that very much. i want to continue in the line of questioning that mr. pallone started, and, again, i have limited time so let me get right into that. congressman green and i have been working on this adapt act,

as you know, and it's legislation that supports the fda's selectability to consider all forms of evidence in addition to data from clinical trials when considering novel antibiotics. how important do you believe adaptive and unique trial designs can play in encouraging new antibiotic drug development? and before you answer that part, just -- i'm sure everybody can hear and probably knows this, but in your typical phase three trials before a drug can get to market, you're going to have to have a population of 1,000 or more people that you're treating. and there are also other requirements that they can't have had an antibiotic within 24 hours of the start of the trial or at one point it was three days, i think and then we got it

down to 24 hours. but, you know, you're going to have a limited population of people that have these diseases, and when they get to the hospital sick as heck, the first thing the doctor is going to do, the administering physician will hang some antibiotic even if it's wrong, they are going to start treating them and then all of a sudden they are not eligible and you have limited number of people. if you wait until you get 1,000 it's too late. so, if you'll kind of take that a step further and discuss that for us. >> thank you. and thank you, mr. green, for your leadership on this. i think it's very important. yes, there is a range and i think that's what people have to recognize. there's a range of development programs that are needed. for common conditions outpatient, pneumonia we have a lot of drugs out there that still work, right. we introduce new drugs we want them to be just as good as the

other drugs and they are going to need larger development programs, right and that's true for many. but for these very rare, fortunately, resistant organisms that are multi-drug-resistant and almost nothing to treat them these cases are occurring sporadically here or there or outbreaks in icus and we have to think of different ways of evaluating new treatment. we can't sit up a trial and wait for this to happen and expect we can enroll thousands of people. and it is true, in fact -- if we enroll thousands of people it would be too late because this would be a terrible thing. so, it is true that all anti-microbial drug development very difficult. in addition the economic problems, there's this huge difficulty in doing trials especially in people who are really sick you can't use a placebo, obviously. you don't know because the

problem with diagnostics you may not know for a few days what organism they are infected with. and so there are all these technical problems that make it very difficult to do anti-microbial drug development. so because we have a tremendous unmet medical need for people, where there's no treatment available, typically what we in case is we have more uncertainty. that means novel trials -- >> i commended the president for this on his executive order of just yesterday. and the $20 million award for the development for this point of care diagnostics. or someone a -- a pill or a piece of tape or something and

put it inside their mouth. if it turns a certain color, you know what you're dealing with right there and you don't have to shotgun approach. you can immediately go right to what you need. i think that's a great -- >> i agree. if we can bring diagnosis of infectious disease into the 21st century, we would have made a huge advance and really accelerated the development of therapy. so that is a good thing. >> thank you very much, mr. chairman. >> i recognize the full committee. fs you've done a wonderful job at fda and your responses to questions from both sides of the aisle have been very, very thoughtful and i want to commend you for the work you've been doing. and thank you for it. i want to echo the comments by mr. pa lone about the comments

about strong labelling or logo in the comments of the adapt act. i think it is a prominent statement with the abbreviated pathway that came to market without this requirement. i'm not sure that -- that the whole thing would work. it would be much less likely to achieve its purpose of fostering and facilitating development of critical new antibiotics for life threatening resistance pathogens. in judicious use of a drug developed through this pathway could result in both patient harm and in more rapid loss of the drug to antibiotic resistance. so i want to undercore that point. i want to ask about a concept that you mentioned in your tempt designed to spur development of new antibiotics. that's delinkage. as i understand it, under this model, the sale of antibiotics would be from the returns of

investment. we don't want, say we want more antibiotics sold, we want to make sure that antibiotics that are sold and used are antibiotics that could have stayed effective for as long as possible. so some other funding mechanism would be created besides the traditional way of selling more drugs to assure a company was able to make a profit from developing an antibiotic. as others have noted the usual pharmaceutical business model doesn't fit very well in the case of antibiotics, we need to however recognize companies need to be able to recoup their investment and make a reasonable profit. and others raise the notion of exclusivity, and i mention that it is a very dangerous idea we don't want to force patients taking one type of drug to fund development of another. so ensuring that raantibiotic

developers are linked to a product aep how much is sold seems like a brilliant way to approach the problem. could you elaborate and tell us more about what ideas you have along the lines? >> well, yes. because right now, we have incentives that actually weigh against our objectives. the objectives is that we have the use of new anti-miebales possible and the inincentive, if you spent $500 million developing the drug, you need to recoup that amount of money and fair prove it to stay in business and develop the next generation. and so these invent ifs are side ways. and they are counter veiling. so that's one idea that's been raised that we mentioned to delink the need to have a large volume of the antibiotic use which would then lead to faster development of resistance. so if that were delinked from

the -- >> you have ideas of how do that? >> as i said, i'm not good at financial matters and so -- >> we depend on you for everything. >> there is pharmaceutical, food and other things that fda does. >> there is an effort to address the antibiotic resistance problem just released report on combatting antibiotic resistance from the president's council of advisors. and it stresses the importance of increasing the longevity of current antibiotics by improving the appropriate use of existing antibiotics an it discusses the need to lock at both human use and animal use of existing antibiotics. we know there is a lot of inappropriate use of antibiotics and both on the human side and i

believe on the animal side. the p-cash report explains the role of this type of inappropriate use. you agree that diagnostics are important for stewartship efforts, and you alluded to this earlier, but can you describe how the widespread diagnostic would help preserve existing antibiotics, as if the fda issist taking any actions to foster the development and use of these tests? >> i believe that diagnosis should be the foundation of therapy. and unfortunately, in the infectious disease space, often you're treating well before you know or before you ever know like what the person has. and this is a fundamental problem. like i believe the add vent of rapid strep testing has really reduced the use of drugs for presumtive strep that often is cold. colds or something. and respiratory infections. so if we could get more

certainty into the diagnosis early, be able to reassure the doctor and patient for family, that no, this is not a dreaded bacterial infection that needs an anti-microbial, we could go a long way, i think, to lowering this inappropriate use. so the dying note of iks and key are just far away from that right now. we need to stimulate that. >> are there more incentives for that? >> i believe so. >> gentlemen now recognizes dr. burgess. five minutes for questioning. >> thank you. again, welcome to our humble little side committee. your last statement, dying note offic nost /* diagnostics are the key. we have had discussions on diagnostics and i realize it is not your part of fda talking about increasing the regulation of testing particularly

laboratory diagnostic tests or laboratory development tests rather. but that factors into the equation and time it takes to get through the pipeline and also if it takes the testing longer to get through the peep line we are actually making things harder on ourselves, are we not? >> yes. we have recently for example we've had a workshop with brookings on this issue of the co-development and technical issues and the final guidance that we put out recently on diagnostics for life threatening disease, we will fill the drug if it is not baked yet. there were g gnome tests that could rapidly change this

situation. so i have great hope that this will be coming soon. every disease, cystic fibrosis for example, there are 150 different mutations in that gene. each of which may to a different feeno type in diagnosis. that goes with cancer and many other diseases. we need to rapidly get to a point where we have a true standard that we can agree upon and so we know what we're dealing with. and we will rapidly improve development of drugs for these serious conditions. >> i share your enthusiasm for g gnomic testing. i seem to remember in my first term on this committee, many, many years ago, talking about some of the same things. and it is sort of like the flying car. we're still waiting for that to happen.

on the issue and at hhs, you did your study on the antibiotic initiatives and development for new drugs, vaccines and rapid diagnostics for bacterial diseases. and talked about moving the needle in monetary terms for companies by a reduction of the time for clinical trials. correct? >> yes. >> is it really possible to move the needle on that? >> well, i believe for the, say the limited population antibiotic development use, that is possible. that's only one factor. but if you have a very high bar getting on the market then you need much stronger incentives for, i believe, for those very rare resistant organisms, we could have very small development programs and that there is societal agreement that having a treatment available for those is better than having nothing.

so we could have strong development programs. we could say to the clinical community no that this is different. no that this didn't is a huge development program. we're offering a tool but you aught to beware, and be a stewardship in this tool. we have worked with new guidances to try to lower the cost of a development program. so that the pipeline can be, you know, more robust. >> you know, on the issue of judicious use and stewardship and i hear the words that are set on that. but you know, you talk about using things outside their area of indication. we tend to think of the world in which we live. but i'm from texas and i'm just a little bit south of texas there's a dirent world where there is not a prescription requirement and you simply go to

the pharmacy and say, i need this. and the pharmacist may direct them to a particular drug or may just simply come in with a recommendation from a family member and make that purchase. so it is an obviously harder to control that with the jurisdiction of the united states where it is happening right outside. is that correct? >> totally agree. everybody is outside with modern air travel. and so we are getting soldiers back from combat to have acquired very dire resistant infections. we have travellers coming back in the united states that is many countries with anti-microbials that you use freely available to consumers without intermediate areas. we want to put the oldest on the doctor, treating a patient in the emergency room, with a kid and concerned family. and putting the illness on our

physician here. none of those constraints exist. i agree with labelling. i agree with making the indications well known. and tried to put the federal government in the second-guessing the judgment of a physician. >> and we agree with that. because treatment is empirical, we can't indicate, you know. it has to be suspected. and you know, you can't say -- you can't treat a patient because this wasn't studied in clinical trials if there is nothing else available. or if clinicians, as you said, must use best judgment when a patient present before them. we agree with that. we want to give the best directions and information to the clinician so they are aware of not only what clinical situation they are dealing with, but how much information pertains to the drug and what kind of drug it is. >> okay mr. chairman, i will yield back. >> thanks, gentlemen. i now recognize the gentleman

from texas. mr. green. five minutes. >> thank you. it is a pleasure to have you before our subcommittee. i want to commend you and the fda on the efforts for the gain act. i know at left two drugs have been released. i want to thank you for your efforts on the adapt act legislation. i co-sponsor it with my friend. in talking about large clinical trial design, can you tell me your thoughts on how the unique nature and incentives or disincentives in the antibiotic space can makeprohibited? >> certainly. not only is it hard to discover new antibiotics, it is expensive to develop then. the reason is, it is what dr. burgess was talking about. you have a patient before you with pneumonia that could have all sorts of different organisms

causing the pneumonia. without rapid diagnostics, you don't know what is causing the pneumonia. when you're trying to do an investigational drug, have you a sick person in front of you. you have a prolonged consent process where you have to have informed consent. people are not going to wait often to go through that process to start a sick person on antibiotics. and so then we have the issue there pretreated with different things until they get into the clinical trial. and then you have all of the headrojenaity. it is not fair to have the noncomparison group with no treatment. you have to do the comparison trial, and those are called noninferiority trials. you want to show you are

statistically as good as. so those challenges tend to increase the number of people enrolled -- needed to be enrolled in clinical trial in a very large number. they are hard to get, hard to enroll. clinicians off t clinicians often don't want to take sick people and get them in a clinical trial. >> the scenario where more trials may help develops seek and create the next antibiotic effective against drug resistant bacteria, can you tell me how the act may pursue novel antibiotics? >> yes. we envision that you can trade-off like the medical need, and we do this in many cases, so if you have a tremendous medical need, people will die quickly and you have nothing to treat them with, then you accept a lot of uncertainty about the estimates around safety and

effectiveness. in exchange for something that may work for that patient, right? that means can you have shorter, very small development programs if the need is huge. on the other hand, if we're talking about another drug for pneumonia, not talking about that. we're talking about resistant organisms. where there's really very little. and we actually think there are multiple development programs that could be done depending on this level of need. in some cases, you may only have ten infections in the united states a year of this certain organism. in other cases, you may have hundreds. can you get more robust program there, right? but then you're exposing more people when you approve the drug because there are hundreds of people, maybe thousands of people out there, having the condition. so you would basically match the development program in the medical need together. and put that together. but then, we would like to have a very strong signal or symbol or whatever. not of a fearful significant

until or whatever, but informative signal to the clinician that the drug had gone through this kind of development pathway. so they would understand that. >> thank you. and i hope, you know, with this hearing today, we could move the adapt act across the line in the future. in continuing weeks and months, i plan on continuing the i do log. including with our panel today to strengthen this proposal and complete the next step in fighting our public health crisis. i want to thank you and your staff for your hours spent working with our offices during the august recess. and i know we can continue that effort because this is important. again, thank you for being here. i yield back my time. >> thank you for your leadership. >> thanks to the gentlemen and i recognize the gentleman from new jersey. five minutes for questions. >> thank you very much, mr. chairman. good morning to you, dr. woodcock. >> as members of the commit oo we hear the firsthand for the

need for greater innocecentivei. >> some of the witnesses on the second panel have recommended a wide range of incentives that would encourage greater development. do you believe that incentives we identify in the antibiotic space might also benefit other areas of unmet need, such as rare diseases? >> well, as i said earlier, i believe that there's a trade-off between the incentives you offer. there's always some trade-off there. and there are various orphan diseases that for which there are many for which no development is occurring. so i think that you have to determine whether, you know, those trade-offs. economic trade-offs. and i'm not qualified to say what is the right course. i think that's the position that congress makes those decisions.

however, i can tell you that anti-microbial development is urgent and a public health issue. the orphan drug says people are suffering from those. have a tremendous need for therapies to develop -- be developed and many, many are not being developed. we are doing things such as working with the national organization for rare diseases and so were to get better natural history studies, that would innocentvise and make it easier for the court of this orphaned disease. and what's needed to study it. however, there is still major financial obstacles. >> thank you. as you know, i share the rare disease caucus on the republican side. and i have in my office virtually every week parent of children who suffer from rare diseases where there are no medicines at all. and as a society, we have to do a better job. i've read the testimony of those on the second panel.

and i hope we can move forward and you say you may not be qualified but i think you are one of the great experts in the country on all of these issues and we look forward to working with you in that area. >> yesterday, the president announced an executive order on the five-year plan to combat antibiotic resistance. what role dr. woodcock will the fda play in helping facilitate the president's order. >> yes. we have been working with the planning group on this. and the fda has a wide range of responsibilities. ef everything from animal health and those issues. surveillance activity which are done of anti-microbial resistance which is primarily cdc lean but fda for example, the norm system which is mentioned in those reports, which monitors anti-microbial resistant organisms in food and

so forth. and these things are intended to be strengthened. in addition, we will work on a better doubling our efforts to innocent advise microbial development and an interest in better diagnostics put out in the report. >> thank you. and may buckwell win all of its games in autumn, except of course to lehigh. >> thank you. now recognize the gentleman from illinois. five minutes requested. >> thank you, mr. chairman. >> it is good to see you back here again. but i think you're being too i could. the business model to whether

it's going to be in diagnostics or testing, is the same business decisions that we make in our home. it is simple about risk and reward. >> aep so, what the reward and what is the amount of risk. aep i think that you all play a big role in that. >> and i'm very excited about this debate about the diagnostic space. and in the opening statement, i today go on to the world wide web. technology allows us to know. pastor born in 1822, certainly, if they can recognize our test prague seed urs now, we've got work to do to ramp it up, i think. and that's the whole, by a similar debate, and the genetic

markings and all this other g gnome stuff that's going on, so i'm very, very excited. also, i've been involved in helping along with following dr. gangry's lead. and i look forward to working with gene in the next congress and we are having discussion dose that. so you have the same questions, right, from us. so i think that what we really want to do and we'll hear from the next panel, is let's get a handle on this risk and reward. and i'm not so adverse to innocentadvising the private sector, in going through the process and helping them do that. than they taken a then go and, you know, and places that no one else is going to go. >> mm-hm. >> so one of the first questions was, as you have seen companies leave the field of antibiotics,

are they small, medium or large? how would you classify them? >> well, i would say that the larger companies, most of them, have left the area for bet are pastures, so to speak. where they see a business model return on investment. and similar with many, the medium companies. there are many small start-ups trying to get into the anti-microbial space. they may have one product they are trying to develop. >> and we have talked a lot about the adapt act today. and there's been success in that process. do you think there's additional things we can do to inventvise, like the adapt. what other things can we bolt on to encourage additional incentives for the adapt act or other processes we are talking about. >> well, i think you have to

think about what are the alternatives, all right? i know there is some government development. there is government awards, usually under contract. for certain entities. and there are few of those. but what is the -- what are the other ideas to develop a robust, you need drug discovery effort. that means people, scientist, working full-time in laboratories trying to figure out the new molecules. this is way before you get tested in people. and it doesn't involve the fda. what i understand from the community is anti-microbial discovers become hard. and i didn't know that until i talked to them. that they've screened like, large numbers of molecules and this pathways and so forth. and it's harder, it's hard to find the new generation. and so, that means a very robust scientific effort has to go on and a basic science of microbes

and also in discovery of these new molecules. and do that, somebody has to have the faith that they're going to make money from that. 10, 15 years hence. okay. and they don't have that faith right now. i can tell you. so i don't think whatever has been done is enough. because you have to consider, if it's not commercial development, how is it going to happen? where is it going to happen? >> and would you help us as we go through this process, help us, this committee, identify ways to help innocentivise? >> absolutely. >> because you are helping with these people. and with this labelling debate, where i understand it, we also went through this debate with the paper labelling and information on pill bottle s s a that -- labelling through the web and labelling through, there has to be a better way tan just

keep putting stickers on the pill bottles and things. and i would like to be -- that's just a statement -- >> can i respond to that? >> the centers for drug says working on developing a patient information leaflet. a one-pager that you get either electronically or at the pharmacy that tells you every other country has this kind of thing. that tells you how to take the drug, what it's for and so forth. but we have proposed and we are interested in going to an electronic physician label. which is the thing that's folded up inside the pill bottle. we would like to move that to electronic with paper options for those who are still electronically impaired. shall we say? but most of the world can easily get that information at drugs at fda, at many other sites. >> thanks, gentlemen. i recognize the gentleman from florida. five minutes for questions. >> thank you, i appreciate it.

thank you for your testimony, dr. woodcock. we ask questions. we submitted questions for the record in nop november and tove. and i want to ask one question again. can you tell me how many treatments were used for the first time and within the last five years have any approvals, and with the marker, and never been before treated before within the last five years. and mou many markers with the fda used within last five years if you can provide that answer. >> we are working very hard and that is a very provocative question. and what we had a very long debate last week among the senior people and the definition of the biomarker. and which of the end point, such as fev-1, which is how fast you

can breath into the machine, is that a critical point or biomarker? clearly in my opinion, it is a biomarker. but not everyone agreed with that. so we are working very diligently on that. so the answer is yes, we have approved a large number of drugs on biomarker point all the time. and a very significant portion of a drugs don't approve. and there are novel ones. in the last five years. but to get you the count was more effort. we today resolve the definitional issues. >> where did you think you might get answers? >> i'm not in control of that timeframe. and i believe you will get this response. >> we will continue to follow up. >> there so good question, it really provokes thought internally. >> thank you. >> there was approximately 450 million in direct funding in fiscal year 2015 antibiotic

crisis. this was across the dhs, dod and usda. about 75% was used for basic and applied research. with the rest directed toward stewardship and surveillance. how do they coordinate their reference? >> there is a long standing anti-microbial task force at the agency level across the government. that was headed at hhs and fda has been a part of that. and the formation after higher level task force. that will direct the implementation of this strategy that was announced. that has long been coordination across the government agencies. and i believe the report discusses that. >> okay. on this, how is the u.s. coordinating with the world health organization? and they are working to come back the resistance.

>> and we do have, we know others have relationships with world health. we think the executive order yesterday and the strategy conceives of much tighter collaboration with who in a very concerted way. >> thank you. >> now recognizing the lady from colorado. >> thank you very much, chairman. i think this is an excellent discussion and i just wanted to ask you to clarify one thing, dr. woodcock. and on the next panel, talking about the report on initiatives by the eastern research group. and what that report concludes is that shortening clinical trial time frames is an unlikely

contributor to innovation. we've been hearing counter arguments to this that without something like the approach taken in the adapt act that i'm a co-sponsor you've, it isn't feasible to do drugs that create the most serious pathogens. so from that per spekspectivper may not have the most sufficient antibiotics. but it would also need to be paired by others -- be paired by other incentives. i'm punder wondering if you will give your issues. because i'm even wondering if we should go forward with the adapt act. >> there are barriers to apt eye microbial -- drugs for anti-microbial resistance. i do agree that i think theeye microbial -- drugs for

anti-microbial resistance. i do agree that i think the i think the stream lining of clinical trials, streamlining organism, will stimulate under that area. why? partly because developers have told me that. part two because we know from experience that if we have a clear path to market and people understand that, they are willing to put their money down on a kind of bat, that they will have a molecule that can get through. but there is clearly not sufficient. number one, we're only talking about the most resistant organisms here. in a small cadrey of drug to treat them. we also need a robust pipeline of discovery that will lead to new drug candidates for all kind of infections. so if the limited population idea and a streamlining of clinical trials which wouldn't just decrease the cost and you

know, the number of people needed, so it would do a number of things. that is one thing that we can do at fda that we think would be beneficial and be beneficial for patients but it is not going to fix this problem we have of investment. >> thank you, there chairman. i yield back. >> i think that concludes this round of questioning. we will have follow-up questions i'm sure from members. we will send them to you and ask that you please respond. again, dr. woodcock, thank you for being so forthright and clear in your answers. and we will now take a three-minute recess as we set up for the second panel. >> thank you. >> the 2015 student cam student competition is going on opened to all middle school and high school students the greater documentary on the three branches and you showing how

policy, law and the judicial branch of the federal government has affected you or your community. there are 200 cash prizes totaling $100,000. in his weekly address, president obama talked about the u.s. response of the isis terrorist group. gaveessman cory gardner the republican response and talk about energy and jobs. >> over the past week, the united states has continued to lead our friends and allies in a strategy to degrade and ultimately destroy the terrorist group known as isil. our intelligence committee has not yet detected specific threats against america. right now they pose a threat to the people of iraq, syria, and

the broader middle east, but its leaders have threatened the united states, and if left unchecked could pose a growing threat. so last month i gave the orders for our military to begin taking targeted action against isil. since then, american pilots have flown more than 170 airstrike against them in iraq, and france has now joined us in these airstrikes. going forward, we will not hesitate to take action in iraq or syria, but this is not america's fight alone. i will not commit our troops to fighting another ground war in iraq or in syria. it is more effective to use our capabilities to help partners on the ground secure their own countries' futures. we will use air power, we will train and equip partners, we will advise, we will assist, and we will lead a broad coalition of nations who have a stake in this fight. this is not america versus isil. this is the people of that region versus isil, the world versus isil. we have been working to secure

bipartisan support, because i believe we are strongest when the president and congress work together. we have been consulting closely with congress and last week secretary of state kerry, secretary defense hagel, and military leaders worked to gain support. a majority of democrats and republicans in the house and senate have approved a key part of a strategy by wide margins, giving our troops the authority they need to train syrian opposition fighters so they can fight isil in syria. those votes send a powerful signal to the world -- americans are united in confronting this danger, and i hope congress continues to make sure our troops get what they need to get the job done. meanwhile, more nations are joining our coalition. over 40 countries have offered to help the broad campaign against isil so far, from training and equipment to humanitarian relief to flying combat missions. this week, the united nations continues to rally the world against this threat.

america has the unique ability to lead this effort. when the world is threatened, when the world needs help, it calls on america, and we call on our troops, whether it is to degrade and destroy a group of terrorists or to contain a threat like the ebola outbreak in africa. we ask a lot of our troops, and while politics may be divided at times, the american people stand united around supporting our troops and their families. this is a moment of american leadership, and thanks to them it is a moment we will meet. thanks. >> i'm cory gardner, representative for colorado's fourth congressional district. growing up in a small town on the colorado eastern plains, island communities work best when people of different backgrounds who may sometimes disagree pull together and look out for each other. that's what my parents and grand parents were about, and that's what i try to do for coloradans. americans are at their best when they are giving each other a

hand and looking at for those who need help, regardless of race, color, gender, or creed. many of you would agree with me that congress and the president to learn a thing or two from places like my hometown and the extraordinary people across the nation that were together every day to build a better life for themselves, their families, and their neighbors. we face a norm is challenges today, challenges that if left unresolved will undermine our ability to give our children and grandchildren the better life we want them to have. working harder every day, only to see opportunities slip from their reach. higher prices, college tuition, and conditions made worse by the failed policies of the president and senate majority. president obama continues to rely on economic overreaching based on european models of the status quo rather than american ideas of growth and exceptionalism. to be clear, i do not think president obama and the democrats are trying to hurt the

economy, but their policies have certainly done damage, and those wrong policies are taking a terrible toll and hurting a lot of people who voted against the president, and a lot of people who voted for him, especially those struggling to make ends meet. we care about the victims of these misguided policies because they are our families, our friends, our neighbors. those who agree with us politically, and those who disagree with us. they are americans. president obama and his allies in congress have forgotten that they were elected to represent all americans. they lined up with special interest actions that have lost jobs, hurt the poor, sold-out the most vulnerable amongst us and left too many behind. for too long, this administration and democrats in the senate have obstructed policies that would get americans back to work. they would have us believe that high unemployed and declining salaries are the new normal, that we should just used to the disappointment of low expectations. that's not good enough for my community, and i know it is not good enough for yours.

yesterday, the keystone pipeline delay turned six years old. things to the presidential in action, we are no closer to building the hype on today than six years ago. as a result, thousands of americans are missing out on good paying jobs the pipeline would create. americans know that political failures like this are the main reasons washington is broken. republicans agree, and that is why we have repeatedly called for president obama and the senate to take action, pass our jobs bills, and get america working again. who is hurt most by the obstruction? not the big corporations, not the rich. it is people looking for work, people in need of a good paying job. it is disappointing that the president and his allies have chosen divisive politics rather than fact and common sense. we have a duty to put politics aside and americans first. congress, the house and senate, and the president, have a patriotic duty to fight for all americans. in my home state of colorado,

responsible developing of all types of resources has fueled a responsible energy revolution. not just traditional energy. wind farms and hydropower provide a model of success for the nation. if the president would stop blocking responsible energy development on public land, the nation could benefit even more. putting an end to regulatory overreach would help colorado and parts of our country they continue to struggle. the new energy economy means more jobs, more money for parents to send kids to college, and more coloradans being more certain that the next generation will have greater opportunities than their own, a greater starting point we can pass on to our children than the one we inherited from our parents. president obama can learn a thing or two from colorado when it comes to energy development. constituents regularly tell me we need more colorado in washington, and less washington in colorado. colorado support the keystone pipeline because we know that its benefits do not end with

more jobs. it would be a major step forward in making north america energy secure. at a time when the middle east is becoming more unstable, a prudent president would embrace a true all of the above energy strategy. we pass legislation to expedite the approval of liquefied natural gas exports. this bipartisan bill would lift 45,000 people off of unemployed rolls. many of our allies are tethered by countries like russia, which dominate the eastern european energy market. this would make america safer while creating thousands of sorely needed jobs at home. energy independence improves the stability of our families and provides economic security from the threat of terrorism by organizations posing imminent threat to our nation, like isil and others. the president and congressional democrats don't understand this is not about oil companies or billionaire donors. this is about american people who are hurt by their decision

to block jobs at the behest of special interests. this is about putting americans back to work and making our nation more secure, about taking away the fear about your children's future, knowing they will not have less opportunity to have a for filling life, but more. this is about sending a message to the world that the united states still believes in what made this nation great, and unyielding belief that a brighter horizon is always within reach, and this is about taking care of our neighbors, no matter what side of town they live in and what political party they belong to. we don't have to live in an economy whose rationale seems to be managed decline instead of inspiration and innovation. we have the power to change the course of our nation by getting government out of the way and letting america work. we are the united states. we are liberty and opportunity, optimism and resilience. we are together in america on the rise. i'm congressman cory gardner from colorado. let's get to work.

>> the next, federal reserve chair janet yellen talks to reporters about the future of jehrest rates and then johnson threats facing the u.s. your calls and comments on washington journal at 7 a.m. bobinia congressman goodlatte who chairs the house judiciary committee. he talks about the reduced public mistrust of the law enforcement and the vote authorizing the prague -- the president to arm syrian rebels. here are his remarks. >> you have toys recognize the president of the united states wherever it is. he is the commander-in-chief of armed forces and need to have the flexibility to act under exiting circumstances.

you have to be very careful how you write that language. i have also not been interested in giving the president. we need to make sure that we are, as it pertains to carrying this bite into new countries. syria is unique because there are a number of different forces, including the assad a government in which we have many concerns as well. how we handle that is important and important for the congress to have this input, was intended it into other areas, the congress should be consulted. goodlatte is on newsmakers tonight at 10 a.m. and 6 p.m. eastern on c-span. >> campaign 2014 debate coverage

continues on monday night at 730 p.m. eastern with the pennsylvania governor's race. thursday night at 9:00. lee terry andween state senator brad ashford. owat sunday, the io debate. c-span campaign 2014, more than 100 dates for the control of congress. >> janet yellen held a news conference wednesday. it followed the announcement that the fed will keep a keen interest late low as the economy continues to grow on us lopez. followingd a meeting the open market committee which is the branch of the federal reserve of the chairman's monetary policy. this is about one hour.

release of this information is not meant to convey any change in the stance of policy. policyknow, the view on is almost policy statement which i won now discuss before coming back to the normalization plan.

as indicated in the policy statement, we decided to make another reduction in the case of purchases. the committee also maintains its for guidance regarding the federal fund target and reaffirmed its view to the highly accommodative stance of monetary policy remains appropriate. me discuss the economic conditions that underpin these actions. the economy is continuing to make progress with the objectives of maximum sustainable clement. conditions have improved further in recent months. although the pace of job growth has slowed recently, job gains have averaged more than 200,000 per month. of 6.1% inyment rate august, 2/10 slower than the data available at the time of

the june meeting. --ader measures of later labor market utilization such as the use have sown a similar improvement and the labor force participation rate has flattened out. these developments continue to trend with a gradual progress for the employment objectives. the labor market has yet to fully recover. there are still too many people who want jobs but cannot find them. too many who are working oft-time with perforation full-time work and too many that are not searching for a job but would be if the labor market was stronger. statement, the range of labor market indicators suggest the remains a significant underutilization of labor resources. seekommittee continues to

sufficient underlying strength in the economy to support ongoing improvements in the labor market. growth roseal gdp to an annual great of 1% in the first half of the year, that transitory reflects factors, including a dip in exports. indeed, profits of domestic final demand -- the spending by domestic casual and businesses -- grew about twice as much as udp. indicators of spending and production in the third quarter suggest that economic activity is expanding at a moderate pace. continues to expect a moderate pace of growth going forward. installation has been running below the committee's 2% objective. with longer-term inflation expectations appearing to be

well anchored, and economic -- they continuing committee expects inflation to move gradually back towards its subjective. firmed.n has this outlook is reflected in the individual and economic projections commit data submitted within the meeting by the participants which for the first time goes through 2017. as always, each participants projections are conditioned on his or her own view of

appropriate monetary policy. the tendency of the unemployment rate projections is slightly lower than the june projections at the stands at 5.5% end of this year. committee participants generally see the unemployment rate declining to its longer than normal level over the course of 2016. edging a bit below that level in 2017. the central tendencies of the projections for real gdp growth 2014 down slightly from june projections. over the next three years, the projections for real gdp growth runs a somewhat above the estimate of longer than normal growth.

finally, the participants continued to see inflation moving gradually back to 2%. the central tendency of the inflation projections is 1.5% to 1.7% in 2014 rising to 1.9% to 2% in 2017. as i noted earlier, the committee decided today to make another exception in that case of acid personages. two years ago when the fo most see began its purchase program, 8.1%mblem and rate was at and lowering it was expected to be much lower than desired. without additional policy accommodations. the intent of the program was to achieve a substantial improvement in the outlook of the labor market and to ensure that inflation was moving back towards the committee's longer run goal of 2%. in light of the cumulative

process towards a maximum employment and the improvement in the outlook towards labor market conditions since the inception of the program, and with the likelihood of inflation writing consistently below 2% having diminished, waiver zeus are purchases -- we have reduced our purchases. starting next month, we will be purchasing $15 billion in security per month down $10 billion. information broadly supports the committee's expectations of ongoing improvement in the labor market and inflation moving back over will endhe committee this program at the next meeting. the committee will continue its policy of reinvesting for maturing treasury securities and principal payments.

the committee's sizable holdings of longer-term securities should help maintain accommodative financial conditions and promote further progress towards the objectives of maximum employment at 2%. regarding interest rates, the rig -- the committee reaffirmed that it will likely be appropriate to maintain the correct market range for the federal fund rate for considerable time after the purchase program ends. especially if projected inflation continues to run below the committee's 2% longer run goal and longer-term inflation expectations remain well anchored. this judgment is based on the committees assessment of realized and expected progress towards its objectives of maximum employment at 2% inflation.

an assessment that is based on a wide range of information, including measures of labor market positions, indicators of inflation pressures and inflation expectations. further, once we begin to remove policy accommodations, it is the committee's current assessment that even after employment inflation and a new mandate level, economic conditions may for some time toward keeping the target federal fund rates below levels that the committee views as normal. this guidance is consistent with the task for appropriate policy as recorded in the participants projections. as i will explain in a moment. we anticipate it will continue rangeablish a target rather than a single point for the federal fund rates when

normalization begins. for each participant, the midpoint of this target range. notably, over the central tendency of the employment rate in late 2016, slightly below its estimated value, and the central tendency for inflation is close to to the 2% objective, the medium production at the end of nearly a.9% remains percentage point below the longer run value of 3.3% or projected by most participants. provide aarticipants number of explanations for the federal funds rate running below its longer and run normal level at that time, many site residual

effects of the financial crisis which although slowly diminishing are likely to continue to restrain household spending, constrained credit availability and expectations for future growth. as these factors dissipate further, most participants expect federal funds rate to move close to its longer wrong level of 2017. let me reiterate however -- the committee's expectations of the passive the federal funds rate is a confusion on the economic outlook. if the economy proves to be stronger than anticipated by the committee, resulting in a more rapid convergence of employment objectives,n to the increases in the federal fund rates are likely to be occur rapid thanto be more

currently envisioned. conversely, if economic performance disappoints, increases in the federal funds rate are likely to take place later and be more gradual. let me turn to our statement on policy normalization principles and plans. this statement is intended to provide information to the public about the eventual normalization process. it is not single a change in the current worst future stance of monetary policy. as is always the case in setting policy. we will determine the timing and pace of the normalization so as to promote its statutory mandated maximum employment stability. since the crisis, the federal reserve has been providing extraordinary accommodations using nontraditional tools of

monetary policy. the intentions has always been to return to a more traditional approach. throughout this, the committee has been preparing for the normalization process. in june 2011, the kimye set out the broad principles -- the committee set out broad principles for how it envisioned the normalization process to take place. 2013, we noted that the conditions have changed significantly in ways not anticipated in june of 2011. including the size of gasosition on the ballast balance sheet and those envisioned that was appropriate. the document released today reflect the updated plans which readers of the minutes will know have been under discussion since the last few meetings.

manyew approach retains broad objectives and principles from the original. also, some the elements. as was the case before the crisis, the committee intends to have monetary policy during normalization primarily through actions that influence at the level of the federal funds rate and other short-term interest rates, not through active management of the balance sheet. the federal funds rate will serve as the key rate to communicate policy. to begin normalization, the committee will raise its target range to the federal funds rate. the committee expects the federal funds rate will vary within the target range. move outside of that range on occasion. such a move and should have no material effect on financial

conditions or the broader economy. the primary tool for moving the federal funds rate into the target range will be the rate of interest paid on accessory reserves. the committee expects the federal funds rate will be below the rate wall reserves are so plentiful as is the case. i would like to emphasize the overnight system will only be used to the extent necessary and will be phased out when no longer needed to help control the federal funds rate. in addition, the committee will

adjust the particular settings of these tools as needed and could deploy other supplementary tools as well to ensure that we achieve our desired policy. turning now to the plans regarding the balance sheet, the committee intends to reduce the security holdings and a gradual and predictable manner, primarily by ceasing to reinvesting payments of principal on securities held in the system of the market account. timing for ceasing reinvestment -- the committee now expects this to occur after the initial increase in the target range for the federal funds rate. the committee currently does not asicipate spelling insurance part as the normalization process. although limited sales might be warranted in the longer run to reduce or eliminate residual

pace of, the timing and such sales will be communicated to the public in advance. intentioncommittee's that the federal reserve will in the long run hold no more securities of the necessary to implement monetary policy sufficiently and effectively end the securities will primarily consist of treasury security. , today'sed earlier release of the committees updated normalization plan is no way intended to signal a change of the stance of monetary policy. rather, it is meant simply to provide information about how the committee envisions the normalization process in light of the changes in economic and financial circumstances that have occurred since we put forth our original plan more than three years ago. that said, conditions could

change further and we will learn about our tools during normalization. that itittee has agreed is prepared to make additional adjustments with the normalization plan it for an by economic and financial developments. thank you. let me stop and i will be happy to take your questions. >> thank you. there were some debate going into the meeting about whether you will remain in a statement -- i want to know if you can tell me a couple of things about it. -- whatd be included does it mean timewise -- it is to questions. a form oftement forward guidance and how do you square this idea of a date when you and others have continually

said that your dated attendance to the point that when the data were to turn, would it not necessarily be a considerable time of rate? >> of course, the committee is gust its forward guidance today. it discusses what the appropriate forward guidance is at every meeting. assessment asthe economic conditions and the appropriate stance of monetary policy. in terms of what the term considerable time means -- the committee decided based on its assessment of economic conditions, the characterization of -- remains appropriate. i think to be look for examples at the projections of individual

participants that have revealed in the -- it is the view of each participants. committee, aot a committee collective you. it is relatively little change in the assessment of the outlook by participants between this meeting and the assessment in june. was littlelook changed despite the change in the and dissipated unemployment rate and a very slight uptick in the inflation projection but really quite minimal. the outlook has not changed that much from june and the committee felt comfortable with this characterization. said this calendar-based guidance. i want to emphasize the risk of mechanical interpretation of what the term in suitable time

means. repeatedly, the decisions the committee makes about what is the appropriate time to raise its target to the federal fund rate will not be dated depended. now, opening comments just i emphasized something i said previously which is that if the pace of progress in achieving our goals were to quicken, if they were to accelerate, it is likely the committee will begin raising its target to the federal funds rate sooner than it is now anticipated and might raise -- might then raise the federal funds rates at a faster rate. the opposite is also true if the projections were to change. mechanicals no interpretation of the time

period. i think it would not be accurate to describe the committee's guidance with the timing of the federal fund rate and when it will move above zero. as being calendar-based. the committee started with a what general statement of determines how long it will keep the federal fund rate target at zero. it is said that it will be looking at the actual and projected piece in which the gaps between employment and inflation and the goals for those variables are closing. then, what the committee does at after seeing the assessment will take into account many different indicators and take into account inflation pressures and other things -- it goes on to provide

at that meeting its assessment of the implications of its view of the data at that time. that assessment really has not changed over the last several meetings. the committee based on its assessment dates meeting at self comfortable saying based on its assessment, those factors, it considers it will be likely appropriate to maintain the current target range to a considerable time after the assets purchase program and ends, especially if inflation remains below the 2% objective. --ould not describe that as by no considerable time, it sounds like a calorie concept but it is highly conditional and linked to the committee assessment of the economy. >> thank you.

mean, would help us -- i square this circle because having cap the guidance the same , having referred to significant underutilization of labor, having pushed gdp projections down a little bit yet the rate past its deeper and seems to be consolidating higher -- it is dated depended, what accounts to the faster projections on rate increases if the data is not moving in that direction? >> the close projections for 2014 are down a little bit, but the unemployment path is also marginally lower. so, while the projections in measures of the labor market are probably depended on the growth outlook, it is not totally dependent on the growth outlook. the committee assesses the labor market as continuing to improve and you see a small reduction in

the path of the unemployment this year and over the rest of the projection period. if you ask me -- you asked me why the projection fund rate has passed, each participant knows the reason they wrote down what they did. say it is, i would relatively little movement in the path. i would view it as broadly in line with what one would expect with a very small downer reduction in the path for unemployment in a very slight will --hange in the

>> coleridge is the gap between performance of the labor market and that is with our maximum employment objective. gaps change, those and you see in the projections they are a modest reductions in the size of those gap and modest -- very small change but at a slightly faster pace at which the gaps would change. i would describe the change both for the economy and path as quite modest, but the fact that they move does illustrate the principles that i think is so important for market participants to keep in mind that what we do will depend upon how the data unfolds.

there is uncertainty about that, and as expectations and the actual performance of the economy change, you should expect to see a change. it is also not above that the further you go out in the projection. the set of dots. in 2017, big range out and that reflects different forecasts by different members of the committee about how rapid progress will be. what you do not see in these so-called dot-plot is the uncertainty that to each participant sees around their own projection. things will depend upon how the economy evolves that will change over time, and there is a good deal of uncertainty associated with this. >> thank you.

madam chair, the economy has been growing for five years and some eight economists believe the expansion will last another five years. in your view, why is economic growth not increasing more inflation in wages? slack in thebout labor market, where are there other forces at lake? -- to my mind, it reflects the labor market. ishad a deep recession, as perhaps to be expect it in the aftermath of a very significant financial crisis. in thed headwinds economy recovering, so the recovery has been slow and growth has been positive and it

butlasted for five years, it is slow relative to past recovery that has not been an associated with financial crises. while unemployment has come at way down from the slightly over 10% level it reached, at 6.1% it theins significantly above levels that most fomc participants regard as normal in the longer run, five point two -- we continue to discuss whether or not the unemployment rate in itself is an adequate measurement of utilization of labor resources. jacksont into detail in

hole and will not repeat all of that there, there are other ways in which we see underutilization high levels that have come down only very marginally of part-time employment for economic or involuntary part-time employment. remaining shortfall of participation as a result of cyclical factors and so, i think there still is, and the statement says a significant underutilization of labor resources and a very modest case of wage increases that has picked up very little is essentially a reflection of that. i want to come back to the interest rate projections put

out today. the public would be an enlightened by knowing a bit more about where you stand in relation to these projections, and with that in mind and in the name of transparency, i wonder if you could describe to us if you are within the low end of the high-end? i also want to ask about san francisco fed paper that came out recently that suggested market expectations have been running below the fed's own projections. i wanted to ask you if you see that as well, and if it is troubling that market expectations might not aligned with what the fed put out today. or ask with respect to myself, the committee has had discussions during the years that we have been providing of theorecasts participants to the public as to whether or not it is desirable

from the standpoint of committee functioning to identify who is who in these pictures. for her occasionally -- an individual will indicate in their speech what their personal vehicles are, why have not yet decided that it would be a desirable thing for the point of view of our decision-making process to identify individuals. we have a subcommittee on communications that now is chaired by vice chair fisher and the sill be considering cp and whether changes are appropriate, but until and unless there is some change in the committee's stance on this, i do not want to identify myself. you asked second about the san francisco fed paper that did

point to a notable diversion between market views and the views of the committee. i would say that there have been any number of different analyses of this topic, there are many different serving measures and interpretations of what the market thinks. not, frankly, think it is completely clear that there is a gap. there are different views on whether or not such a gap exists. that there is a gap, one reason for it could be markets and participants have different views on the evolution of economic conditions . for example, i think i would note that to blend the committee participants write down their forecasts for the federal funds rate, they are showing the funds

mostpath they consider likely. there economic forecasts are of the conditions that they think are the most likely ones. you do not see the full range of possibilities there. rate iss of the funds the path and that each individual thinks is most likely. market participants, understanding there are a range of possible outcomes, with upside and downside possibilities, are doing something slightly different i think when they are determining market prices. they are taking into account the besibility that there can different to economic outcomes, including, even if they are not very likely, ones in which a

outcomes will be characterized by low inflation or low growth rates appropriate path of will be low. so, differences in probabilities of different outcomes can explain part of that. .e want to learn market participants may have different views than the committee does, and that is something we want to try to in further and learn market views apart from information of this type. what i can say is that it is important for market participants to understand what are likely response or reaction function is to the data. our job is to communicate as as werly as -- as clearly can win our policy stance will depend upon the data. i promise to try to do that. high.

washington post. my question is about the new exit principle that you say you do not plan to end reinvestment until after the first rate hike. can you give us a little bit of a sense of what are the conditions when you eventually begin to end the reinvestment. it sounds like tapering the reinvestment as also on the table. what is in your decision on whether to and/or taper? and do you have a general timeline for how long you think it will take to shrink the balance sheet once you start? >> and questions. i think the committee will read -- will be focused on the intent to use the path of short-term interest rates as our key tool of policy. and of course, market participants will be very focused, as we are, on what is the appropriate timing and pace

of interest rate increase when that time comes. i think the committee would like to feel that it is successfully begun the normalization process and that we are successfully communicating with markets and will bew that process playing out over time. i think when the committee is comfortable and that at process is established, is working well, and we're comfortable with the outlook, that they will begin the process of seizing or or eventuallying, ccing the investments. depend ont it will economic conditions, but we want to make sure normalization is successfully underway. two shrink our ceasing the by

investments, to get back to reserve levels before the crisis, i am not sure if we will go that low but we have said that we will try to shrink our balance sheet to the lowest levels consistent with the efficient and affect of implementation of policy. it could take until the end of the decade to achieve it those levels. you said a few moments ago remaining at some labor force participation shortfall. this seems consistent with the recent paper. thatat not the house view it is unemployment plus part-time workers who want full-time work so participation is out of the equation? the second croatian the -- the anond question, there is

idea in circulation that you might stay for longer as a means of compensating for some of the damage done during the recession. this is an indication that debate has been settled and the ideas off the table? >> what was the first question? >> has labor force participation been removed from the equation? >> the recent brookings paper by indicatesists clearly , and i said this at jackson of are structural reasons, particularly demographics but not only demographics, wide labor force participation can be expected to decline over time. i agree with that and i will leave most of my colleagues when the doors that as well. however, they did indicate in they see some

remaining cyclical shortfalls by one technique they use. 1/4y placed the estimate at technique, it could be 1%. my view is there is some cyclical shortfall. something within that range, but nevertheless it is a meaningful cyclical short while. view,iving my on personal not a committee assessment. the -- given the underlying downward trend in labor force participation, we might interpret the flattening out of labor force participation over the last year as showing that that cyclical component has diminished somewhat. i think there is something that

remains, but eventually i would certainly agree with the authors. we should expect, over time, to see labor force participation declining. we stayed low for a very long time. we have been at sea row for a very long time. ero for a very longtime and given the level of employment and inflation. recovery has been slow. we have been doing unconventional policy buying assets. in a general sense, we have been , if your longer than complete that sentence, many policy rules would suggest.

in a sense, that is a policy we have had. is appropriateit to begin to normalize policy and to raise the level of our target rates, --erm interest short-term interest rates, it would still take some time for rates to get back to levels. of 2017, the participants are on average projecting that rates will reach the levels they considered normal in the longer run and we could make a similar statement where the funds it rate would stand relative to the recommendations of rules. that would take some time to return it to those kinds of levels. the associated press.

madam chair, there were two dissents from today's decision. i would like to get your thinking on how you treat to sense. in chairman bernanke ease eight years, the largest number of dissents was three. do you see two dissents as a yellow flashing light that policy may need to be moderated? >> i think it is very natural that the committee should have a ange of opinion about decision as crucial as what is the right time to begin to havelize policy and we do a range of views in the committee. i do not consider two dissents to be an abnormally large number.

president plosser and fisher have been quite clear in all of their speeches recently stating that they think the time has come to begin normalizing up policy. perhaps, have some concerns that if we do not begin to do so soon, that the inflation will pick up and be above levels that they would consider desirable or that they have some financial stability concerns. but, the committee adopted statement by a majority and i do not consider the level of dissent to be surprising or very abnormal. >> there has been a another unemploymentthe forecast. does it appear the potential is

much lower than you thought and therefore slack is closing faster. secondarily, how concerned are you about events in europe? there has been a little bit of downgrading, i think he even in the longer run, normal growth rates that the committee participants have written down. you are certainly right in saying that over a number of years now there has been a pattern of forecast errors in been onther we have track with respect to unemployment or unemployment has come down in some cases faster than we anticipated anti-at growth has pretty persistently been surprising the committee to the downside, and that is a

statement about productivity growth which has been pretty disappointing. we have had downward revisions in the level of potential output and to some extent, at least for a time in the projected pace of growth, so that has been there. there are a range of views about long-range growth. a lot of people are writing about this topic. i think the committee longer run estimate is neither, at the most pessimistic nor at the most optimistic and. i have a question -- had a question about europe. >> certainly we have discussed the outlook for europe. the very low level of inflation that they have seen recently and

the decline that they saw in inflationary expectations and the slow pace of growth. it is one of a number of of risks on the global economy and we certainly hope they will be successful in seeing the pace of growth and inflation take up. i think that will be good for the global economy and the united states. >> the financial times. let's come back to the forward guidance. the committee has recently criticized it as being calendar-based. you correctlyd earlier, that is not correct. if it does not have a defined meaning, what purpose is it serving? will you revisit it in the near

future? >> we're constantly discussing forward guidance and thinking about whether it is appropriate and how to revise it. we did do a major overhaul in march. participants who have spoken out on this topic recently want to make sure that we have the flexibility that the committee has the flexibility to respond to unfolding developments. ify want to make sure that progress really does turn out to be faster than we would expect, that the committee will be in the position to start sooner tightening monetary policy. they do not want to be logged into something that the market sees as calendar-based and firm commitment.

emphasize data dependence of our policy and make sure we have appropriate flexibility. i agree with that. we doaid earlier, i think not have any mechanical interpretation that applies to this. aboutes an impression what we think will be is noriate, but there mechanical interpretation and i have said repeatedly, and i want to say again, if events surprises and we are moving more quickly toward our objectives and the committee sees a need to move sooner or later, depending upon what the data is, that we theyto feel -- i do feel have the flexibility to move in and it is important for markets to understand that there is uncertainty and this statement

is not some sort of farm promise about -- firm promise about a particular amount of time. >> good afternoon. the one aspect of the forward guidance is the statement which you have reiterated about the funds rate probably needing to stay below time aftersome achieving mandate-consistent levels of inflation and so forth. the assessments of our appropriate fund-right level shows the fund-rate level getting up to the normal level at the end of 2017. if you look at the set projections of unemployment, inflation, and so forth, they seem to get back to those mandate-consistent levels by the end of 2016 if not much sooner.

what is the justification for awaiting that much longer to get that to normal, particularly when you have such a large intend toeet that you reduce only gradually. is there a danger of getting behind the curve? secondly, can you envision a time when the reduced reserve russia's you may have to resort to sales that you do not now?ipate >> on the first question of some time before rates return it to normal levels, as i mentioned, you can see in the sep that by the end of the year, -- at the 20 17, many see normal longer run levels. the economy, in their view, read have probably gotten back to

normal levels of unemployment levels oformal inflation sometime in 2016. so, that looks like a year or more that we will be below normal, longer-run levels. we asked participants why they hold the views that they do about appropriate policy, and there are a number of different explanations that participants give, but a common view on this a that there have been variety of headwinds resulting from the crisis that have slowed to a sluggish recovery from the crisis, and that these headwinds will dissipate only slowly. are dissipating. an example is the fact that the this point isat

available really to those with pristine credit. credit conditions there are abnormally tight. another thing that we see is that households expectations about their likely income halves quite depressed relative to pre-crisis levels. that is something that may be holding back consumer spending. would be that those forces will dissipate over time, but only very gradually. in addition, you have had slow productivity growth and a slow pace of potential out it likely investmenthe pace of spending. those are some of the things that participants mentioned is why it will take some time to get back. the fedry is not that is behind the curve in failing

funds rate tohe normal levels when the economy has recovered, it is rather that in order to achieve such a recovery in 2016 or by the end, it is necessary and appropriate to have somewhat more accommodating of policy than would be normal in the absence of those headwinds. foxbusiness. i would like to follow-up on the question about europe. tomorrow, scotland is going to be voting on independence for great britain and there is some concern that if it does vote to break from rate britain, that this could cause some turmoil in global financial markets and the economy. and you concerned about that? do you see any impact of scotland is meant for independence on the european

economy and potentially on the american economy? if so, is the fed doing anything in preparation? >> scottish manager about to go to the polls tomorrow. they have had a big debate about this topic in light of that. i do not want to weigh in on this today. cracks thank you. news wire. my question is about your particular view. aboutwas some discussion internally and externally, whether it was the fed predictability in two thousand four. that's kind of created the conditions of complacency that led to the housing bubble. i wonder if you would be more inclined to be gradualist in your approach and more transparent and outlining future moves, or whether