nations join the anti- isil effort. further stated that although the fight right now is tactically stalemated the node dramatic gains on either side, they will move at the speed of governance and not the speed of its military capability. i would like to reassert this for general dempsey with your permission. they will include the assessments. >> of course. >> general, give us your assessment that russia is

building up the military base and sending soldiers and weapons into syria to prop up a side under the guise of fighting isis? >> we are witnessing a buildup of forces in syria by russia. as you know, they have been there all along but are increasing the footprint. with a stated as they want to focus on helping to counter isil, as i understand it. that is left to be seen, and as you know, russia is not transparent. we don't know what their true intentions are. the interaction, potential interaction of additional capability and operations, utilizing that capability could increase the friction

in that battle space significantly. >> general, the senate defense authorization bill calls for a 30 percent reduction in headquarters staff and cost at the department of defense starting with the seven and a half percent cut in fiscal year 2016. what impact will that have on your ability to conduct operations, and what is sent, if you want to submit for the record, planning to do to make that cut? >> if you take a look at what is going on in our region currently from pakistan, afghanistan, to yemen, to iraq and syria syria and to increase the tensions and other places throughout the region, it is clear we have an active region.

so in order to manage the things that we need to manage and work with our partner nations in the region we need appropriate staff to be able to do that. the reduction of the line on the budget. we have to do what we can then need to do. it makes it increasingly difficult to get things done. >> i want to thank you for being here today. are we providing support and weapons of the syrian kurds?

as i heard your testimony we only have four or five us train syrian fighters. what are we doing to support the syrian kurds if they are effectively pushing back isil on the ground? >> we are providing them aa tremendous amount of air support which is what they wanted. this is the element, a portion of the element with the folks that hung on at combined valiantly. it was doubtful as to whether or not they would be up to survive in that environment and continue to do things. they continued on an increase the size and activity and made a significant difference in the northeast part of the country. they have asked is sustained airpower strikes, and they have benefited from the

strikes. becausebecause of their aggressiveness they have made a tremendous difference in the northeast. >> they have not asked for arms? how does turkey -- how is turkey acting on the ground here in terms of obviously what they have given them. how you view turkey's role in all of this. forty-five us train fighters , that is a joke. what more can we do to help? >> up to this point they have asked us for arms, but that does not mean that they want. of course you know, as we go forward there are things that we can do to continue to help as they try to get

supplies into northern syria , work with the kurds in northern iraq to help ensure we have lines of communication that facilitate that. they need to partner with syrian arabs i think it is a combination of all these forces that is going to make a difference going forward. we expect a footprint to grow over time. ..

what that we will mean, i don't know. >> perhaps if they had more cash and money they would like to provide more support to the regime. >> my assumption would be that that would be the case. >> i wanted to ask, issues with the train fighters, are we going to provide, if they are under attack, what are we going to do to support her protect them. we will provide overwatch.

>> i am worried like the rest of my colleagues. there have been a number of questions about the train and equip mission. the good news is if you give them aa job to figure out a way to get it done. the bad news is, they are not willing to say what it is not going to work. at what point in time do you envision us admitting that while all good intentions and on paper all the work was done, finding willing fighters it can be screened appropriately when you have the vast majority that feel victimized by the current situation are running for the exits.

at what point in time and what is the discussion ongoing about the money you are requesting for next year? that seems very unrealistic. if we have successfully completed, and i believe you said the last information was 100. what is the number? >> senator mccaskill, it is between 10120. >> we are counting on our fingers and toes at this point. we had envisioned 5400 by the end of the year. i am worried that this is one of those instances where the good news about our military is dominating. we can do this, and the practical realities are not being fully embraced. >> thank you, senator. i absolutely agree.

we have the finest troops in the world, and they will figure out a way to get the job done one way or the other. again,again, what our special operations forces have done in northern syria is, they did not wait for the knew syrian force program or train and equip program to fully develop. at the outset they began to engage elements like the why pg and enable those elements and are making a difference on the battlefield. and there are tens of thousands out there right now fighting isil. ..

right now, small in number and clearly will not reach the numbers we have time for. nevertheless, getting very good to reallywill be able afford multipliers of other groups on the ground that happened very effective, like the coalition. >> the in the end of year with us bragging about 120 the new plan. it is a serious allegation of our government in terms of ability to oversee and make

decisions around the use of our military. end of theay at the investigation, when you can discuss it, i want to put on the record that i will watch very carefully about any potential it is important iistleblowers be protected understand maybe there are things i am not aware of, but i want upon the record i will be paying close attention to how the whistleblowers are treated in the aftermath of the investigation. >> i assure you we will do everything in our power to protect. this is important.

again, you know, we need by organizations like this. it and are making provide by the spirit of this. >> thank you. i think the nature of your remarks are justified. how long has it been since we have had the program in effect? this have took knowledge is a total failure. it is just a failure. not so but that is the fact. it is time, way past time, to

react to that failure. i would say the whole idea that we have got to wait for the locals to take ownership and and do thisd without any leadership support sufficient from the united states or our allies is also a failure. they are not able to organize well. iraq are divisions within that make it very difficult. i just wish it were not so but i am afraid that is the reality we are dealing with. u.n. says 4the million refugees, 7,000,005th-place -- 7 million displaced. we need to deal with this in an honest way. way is to keep people

as close to home as possible. be staying at home, they are to be cut -- kept as close to home as possible. i spoke with a senior official recently and he told me on this refugee crisis is the greatest threat to europe since world war ii. see a plan to make it better. we have got to consider creating safe zones within syria. some places in syria now, refugees can stay. we cannot have millions and millions of people walking into europe. it is hardly worth discussing. i am really worried about this. i wish we had already done much better by being so slow to enact -- to act initially, this is what it has resulted in the situation is far more grim than

it should be in my in. general austin, i agree with you that a defeat of isil is not the end of the problems in the middle east. we have got extremism that witnesses have told us may be going on for 50 years. would you agree with that? it does not mean a total victory. there will be another problem as long as this ideology is out there. we need a strategy. an understood strategy bipartisan in this congress with our allies around the world to confront this long-term multidecade threat to the western democratic order. and to try to help protect people in the middle east from this disaster. do we have a strategy of that kind? our allies in the united states

and congress and republicans and democrats understand and agree on? ms. wormuth: we have a strategy to defeat isil in the middle east. largely in the middle east but obviously spreading to other areas. there are other dynamics in the middle east that are a part of this. of this. there's the broader conflict that has gone on for decades. the fact that many governments in that region are not very representative and have internal policies that don't give much freedom to their people so that is part of what is part of what is creating a problem. a big part of our strategy is working with these people.

>> well set in one sense. does that mean we don't support the king of jordan? >> i'm asking rhetorically. we have to have a more realistic policy than that. i was just reading a book on order and last night hit the part about george and the containment strategy that maintained western unity, free world against the communist total talent terry them. it went on for almost 50 years. this is the way it was expressed. southern expansionism was real and in harwich, the conflict was inherent in the two ideologies. it is incompatible to constitutional democracy. he said, it could be quote contained by a diligent

application of counterforce at a series of constantly shifting geographical and political points. i don't sense that we have any such strategy. i'm sorry we don't. i think radical islam is essential component. thank you mr. chairman. >> thank you both for being here. since senator commented about communism and segues into my first question why do you believe four years into this conflict that russia is deploying material and increase shipments to the outside regime and really setting up shop in syria and away they have it it

in the last four years? >> russia has been a supported of the asad regime for some time. putin has spoken more publicly russia has played today. part of what may be happening, part of putin's calculus is a shots regime has been under greater threat in the last several months and is so has advanced in some other areas. patent may be nervous about the stability of the a shod regime and may be trying to shored up. >> given that, how do we assess the possibility the a shod regime might fall? >> at this point the assessments i have read and the regime has considerable strength in terms of military forces. it is still most powerful military force on the ground. the support it receives from iran and russia remain

significant. there have certainly been battlefield losses that have been concerning, we are looking at how to deal with, we we are planning and thinking about how to deal with it. right now with the assumption is the asad regime is not an imminent danger of failing. >> are we concerned they will threaten our coalition aircraft? >> if they are trying to operate in the same space then that possibility is clearly there. >> how are we thinking of responding to that? >> for either of you. >> we are still in the early stages of what russia is doing. at the diplomatic level we are making very clear that

deployments that are going to shore up the regime and draw out the conflict are counterproductive and destabilizing. if this is about russia trying to join the fight against i cell we did expect military capabilities to be consistent with that. >> how are we making it clear to russia? >> their number of channels, secretary kerry speaks to his counterpart regularly and has been making that point very clear. on the military side and i'm sure general can elaborate on this, if in fact it gets to the point where we see russia aircraft operating in that area, we would need to set up some d confliction mechanism so we can continue our counter is so campaign. >> we know how to do that. my utmost concern is protection of our troops.

we are going to make sure we have the ability to protect ourselves at all times. on occasion, searing aircraft are flying into spaces that are not too distant from where we are operating. we are able to make sure number one, we maintain vigilance and number two, we keep battle space, we work with a battle space in such a way that we avoid conflict and encounter if at all possible. >> i appreciate that has been our policy today. given the total failure of our ability to influence the outcome of the syrian civil war, are we assessing whether we should take a different response with respect to a side? >> and engaging with the syrian

troops? >> we continue to look and believe what would be the best solution is to get a political transition and get asad out of the government while retaining the government structures so you have a situation of chaos on the ground. russia with its relationship with the regime could contribute with helping to find that solution. that would be a valuable contribution from russia. >> there would be but there is no incentive for russia to do that. >> what is the incentive? >> they want more than anything a more stable syria. they're quite fearful of isil as well. they are just as concerned as we are.

so i think russia does have an interest in having a more stable syria and constructively for them to engage in work with us in other countries who would like to see a transition there. to come up with a diplomatic way to make that transition happened. >> i think that would be a positive outcome, it's not clear to me that we have seen any action in the last four and half years to suggest russia will play more positive role. thank you. >> thank you mr. chairman. >> general austin thank you for your service in both syria and iraq we have misplaced individuals that are part of the discussion. individuals moving into europe. in terms of numbers right now, this would be a question for either of you to we have an update on the total number of individuals displace between

syria and iraq that you can share with us this morning question mark. >> i believe it is around four million. it is a very large number. >> that would be from syria question mark. >> that would be from syria and iraq. there are more than 1 million refugees in turkey right now. hundreds of thousands if not 1 million refugees in jordan. the neighboring countries are already hosting large numbers of

and if there be a concern of military and our desire not to do more harm than good and what we provide. at the same time our expectation is weird doing operations throughout the area. we don't want to get into areas where we will cause more damage. right now we are challenged because you do not have the observers that would make it more efficient than what it is today. can you share what you are doing to try to improve that situation and how you would like to see that handled? >> we routinely use our intelligence, surveillance, assets, manned aircraft to make sure we understand what is going on the ground before we employ weapons. we are diligent in our efforts

there. not overly cautious to the point where we can't take advantage of opportunities to engage the enemy. we are mindful of the possibility of committing civilian casualties. >> is it fair to say were were not using any of our observers at all. we don't have any forward air observers on the ground. >> that is correct. our j tax are operating in the command centers. what that does is it allows the j tax to have visibility over what is going on in the target area and enables them to gain visibility of where the friendly troops are. this is the biggest challenge we encounter throughout this battle space. in many cases the people we are

trying to help don't have a handle on where their people are. it slows down our ability to engage. >> when you are training individuals in iraq and those who want to fight back and syria, we understand and i don't think there's anyone who doesn't think were not on schedule that's a fair assessment right. in terms of the number we want have trained for iraq you nationals and syrian nationals? >> i'm struggling with my sign. we would like to see a lot more forces available to be trained and we are encouraging the government of iraq to recruit those forces and bring them on board. what we have discovered, is that those forces that have been trained by us are doing pretty well on the battlefield.

>> is it fair to say one of the problems is that in our ability to discern which ones we can use and which ones we can't based on our review of their background, if they want to go in and fight aside it's eliminating them from being part of our team. >> that is correct sir. we are focused on encountering isil. >> thank you mr. chairman. both of you have testified that the process has resulted in far fewer fighters for us to train. does this mean we are turning away thousands of potential fighters? >> i would say two things. one because the the authority we have focuses our program on

fighting isil, there are a number of individuals who might like to receive training or equipment from the united states but they want to fight the regime. that is that is not the focus of our program. the other way the standards affect the recruiting pool is we want to make sure we have confidence in the people we bring into the program and we can give them equipment to trust them to use that appropriately, trust them to fight on the battlefield that is consistent with the arms conflict. in many cases people don't meet those standards or are younger or under the age of 18 for example. or or otherwise not medically qualified. >> is one of the assessments you are doing to review whether or not we are being unrealistic regarding the kinds of factors we want you to take into consideration before they trained in individual?

is that an individual you're looking at. >> we are looking at our recruiting and screening process all of the time. even before the first class was reinserted we were looking at how to speed up our recruiting process. we are looking at the criteria we have in place, our view is that right now or criteria is consistent with the requirements that congress gave us. if we were to loosen them we would absolutely have to come back to you all. >> that is my question is if you are seriously considering asking us to reevaluate the criteria that congress established. we are talking about what is going on the ground, i'm concern - and you mention this in your testimony that you're looking at effective ways to counter

icicles effective campaign. there are concerns of isil ability to move without having direct contact with isil. so taking action in our country and elsewhere, what are some of the effective ways you are countering isil messaging strategy? >> we are taking steps that are effective but we need to do more. we have been working closely with the number of countries in the coalition to identify communicators inside communities who have credibility with muslim populations. who will be able to lay out a compelling reasons why isil theology is completely bankrupt. we have been working with governments to counter

extremism, working to get our message is out about military successes. a lot is working with the private sector and civil society to get the right kinds of messengers to speak to these kinds of groups. it is a very challenging part of our effort and we need to do more there. >> i completely agree with that. i think the lone wolf phenomenon and the problem is one that we don't have a good handle on. i think you mentioned that you thought there were signs that iran would like to be more active in supporting syria and possibly because of the agreement and getting their hands on more money as sanctions get lifted. what are the signs that you have seen? >> we know iran is already supporting syria, are you expecting they are going to put

billions more into their support of a side? >> they are already supporting syria. you are exactly right. as things become more dynamic and syria and the regime is increasingly challenged, it is my assessment that iran will on to continue to shore them up in a greater way. >> it's not as though our country will stand by idly while iran proceeds with that kind of program. were not kind of program. were not just going to sit there. >> absolutely not we were focused on looking - we have sanctions of our own to try to block arms going to countries.

we have worked with folks in the coalition to, we will continue to use those tools to limit iran's ability to support the syrian. >> thank you. >> thank you mr. chairman for calling this important hearing. thank you secretary and general for taking time today to answer our questions it is deeply appreciated. it has been one year since pres. obama announced to the world that the united states would undertake a strategy to degrade and defeat isis to bring some sense of stability to iraq and lead to a negotiated end to the civil war syria. it was my belief that presidents goal that he outlined to achieve that goal may have been beset

from the outset from some flawed assumptions and contributions in a region of the world that is anything but easy to predict. this compounded by string of recent events is white may be time for us to reassess the way the united states abuse this conflict and chooses to respond to it. i think we need to start by prioritizing u.s. national security interests. general, what is your assessment of the most significant threat the conflict of syria and iraq posed to the security of u.s. citizens and our freedoms. in in other words, at the end of the day, what needs to be accomplished for the u.s. government to fulfill and perform its constitutional duty

to protect the people of the united states and our interest? >> thank you. this is a transnational threat. if left on checked it will continue to expand and try to take up an occupied territory and govern. in doing so, it will try to erase international boundaries, it will try to do a number of things that will cause tremendous pain and suffering throughout the region. it will also export terror. it will export terror to other parts of the worlds and particularly to places like our homeland. we see the beginnings of this and this lone wolf activity. we also see, what we are concerned about individuals who go into iraq and syria and fight

as a part of this effort and potential he returned back to our homeland and bring the skills back with him. it is a threat to us and i think the threat will continue to increase. >> the administration strategy is to create an environment in syria that will be likely to lead to a negotiated settlement of the civil war and results in power. in your opinion and given your knowledge of the region, what level of pressure would need to be leveraged by mr. aside and his supporters, especially other minority groups view some opposition groups as a threat to their survival. how much investment would be needed from the coalition and

countries to provide stability in hypothetical post a sod syria. >> i think a sod would only be willing to come to the table to negotiate a settlement if he feels like he is threatened. as things continue to develop in the country we see a number of elements who are fighting the regime. their efforts come together and place increasing pressure on a sod. shod he is losing capability every day. the wildcard is other countries

could sure him up and it could extend things for a different time. in a post a sod environment we have to consider their number of elements that will continue to be there and continue to fight if their remnants of isil there they will can tune you to fight. whatever the transition government looks like. , it has the ability to do its job. >> thank you i see my time has expired. >> i was in.

>> .. i was not an original supporter when senator mccain raised the idea of a no-fly humanitarian zone in the fall of 2013. i listened to general dempsey told us why that wasn't a good idea and generally agreed. by the time senator king and i went to lebanon in february of 2014 and saw a million refugees

already into lebanon, i became converted. when senator mccain pushed the idea of humanitarian zone first there was only about 750,000 syrian refugees in turkey, there is now 1.8 million, it will be two million soon. there's four million, the number is four million syrians have fled outside the country. there's 7.8 million internally displaced syrians in the country. they could easily leave the country as well. a humanitarian zone in northern syria would be very difficult to do, but i think the benefit of that compared with four million and then climbing, it could be six, seven, eight million refugees, some of whom could be very, very dangerous leaving the country, i think we would have been wise to do it when senator mccain suggested it, and i think we would still be wise to do it. having met with several refugees in turkey and a lot of those who fled the country would go back if they felt there was a place where basic needs would be met and they would be safe. i would encourage that. that's not your decision to make. i would encourage that to the administration. let me talk about the -- general austin, you said a second ago in

response i think to senator mccain's question, that you thought the war against isil would go on for years. is that correct? general austin, you set a second ago in response to senator mccain's question that you thought the war against isil would go on for years. is that correct? >> yes sir, it is. >> i don't think go on for years and the chances of success in the chances of isil are dimmed. i don't don't think those are compatible statements. that isil chances of surviving are dimming and that the war will go on for years, i don't think that those are compatible statements. it seems like the isil threat is expanding geographically. we are talking heavily about iraq and syria. there is isil presence in libya that we are paying attention to and they are in afghanistan. largely those are disaffected taliban.

boko haram has pledged allegiance to isil not yet threatening the u.s. and there may be some presence in yemen. is that correct? >> that is correct. that there is. >> the battlefield against isil is expanding. we are actually engaging in some new activity. my understanding, general austin, you you indicated we have undertaken airstrikes to support and train syrians in syria when they have been threatened. is that correct? >> that's correct. >> there is also a change in policy to protect those syrian fighters if they fall under threat and a top attacked by the assad regime? >> that's correct. >> i tactically, completely agree with that. what is the legal predicate for the united states undertaking military action against forces of the assad regime? >> senator our determination is

that as you know, very well, we can defend against isil under the 2001 plan and if our forces are attacked by a regime under certain circumstances, the presidents could exercise his article to rights under the constitution. >> if the u.s. is attacked, if our forces are attacked. >> i meant i meant our forces, meaning the forces that we train. >> i have not seen an interpretation of article 2, ever, that would allow the united states to undertake action under article two to protect others fighters. you can take action under article two to protect the us. the president doesn't have to ask anyone's permission for that. but to undertake action to protect others fighters, i've never seen an interpretation of article two that would do this. the last thing i will say, there's a lot more criticism i would get into here. i worry that congress is

criticizing you. we are acting like fans in the stand. we have not authorized this war. we have not authorized this war yet. i believe it is carried out in violation of basic legal principles because congress has not done what congress is supposed to do. we can be fans in the stand and throw all the criticisms we want, but we are in the 14 month of an undeclared war that is based upon a legal justification that is facetious in my view. congress has allowed it to happen giving up their article one response abilities. now we've been told the wars way to go on for years, my question to my colleagues is how long are we going to allow the president to wage and executive war without congressional authorization. i think. i think were afraid to touch it so we can criticize it as much as we want. we will have many more hearings like this and we will have critical things to say. if were not willing to do

our constitutional duty, why are we here. we are supposed to be the owners of this team. >> if that's the question, i will say say wars are not one with paper resolution. they are one with iron resolution and that is clearly lacking in our resolution with the ups islamic state. >> thank you for coming and for all the thousands of troop you represent and their service in your service and i want to speak briefly about the reports that there may have been some efforts to cook the books. i know you acknowledge this in your opening statement. there were ongoing questions to include with the ig. you you have an on going challenge in your reporting that affects your operations. putting aside the investigation, could you tells what steps you are taking to confront those challenges you face on a daily basis?

>> i have recently, and continue to, emphasize to all of my subordinates that my expectation is that i get candid and accurate intelligence assessments from my staff. i also and besides to my entire command that the welfare of my people is extremely important to me. i care about my people. my expectation is that they have a climate that is conducive to providing for a good, healthy, sound work environment. >> thank you. i would have to say to as someone who regularly consumes intelligence products on the islamic state and our campaign against them as a member of this committee, i was very surprised to hear allegation that books are being cooked because those products

would not paint a pretty picture of how this campaign is going. i want to move now to events in syria, in particular, russia russia's military buildup and reports in the last few weeks that russia's senior officials and aircraft carriers and have battle tanks now. in in addition to life-support systems that were designed for a large and continued presence, how many airstrikes is the coalition conducting on a daily basis in syria? >> we are conducting overall about 24 airstrikes in iraq and syria. about one third of those are in syria. what efforts if any do we have to d conflict this battle space now that we have hundreds or thousands of russians running around with battle tanks and

airstrike technology? >> we continue to look at what the possibilities of encounters are, sen., and we make sure we have measures in place to ensure that we don't have an inadvertent encounter with either russia or syrian aircraft. >> do you have positive identification that there is no russian on a target before they strike that target? >> the russians have not started, to my knowledge, have not started operation so we have not encountered that yet. clearly these are things that we will continue to work and think through. >> assad's other supporter inside syria, do our pilots have to have 100% confirmation that there are no iranian members

before we issue and airstrike? >> we have to have certainty that they are isil targets that will be engaged. since you know, know, we can see what we are shooting at or what we are engaging, this is not an issue. >> there is a report recently in the media that russia offered, in 2012, to help the west remove assad from power but the u.s. denied that. is that an accurate report? >> i don't believe that's an accurate report but that was from several years ago and i was not in this position at that time. i don't believe it's accurate. i don't believe it's accurate. >> do you believe iran and their proxies can be a partner in the fight against the islamic state in any way or any part?

>> no not really. we are not cooperating with iran and iraq right now. we are d conflicting, as you know well, they certainly have a role role with some of the shiite militia and the popular mobilization forces, but we are not cooperating and i don't see iran as having a productive role in either iraq or syria. >> they had to rely on u.s. air power and they are relying on russian airpower trying to rely on them to help with the islamic state is like trying to rely on gasoline to put out a fire. >> thank you mr. chair, general, i want to touch for a few moments on the intelligence issue. i consider this extremely grave, a grave issue because if we

don't have reliable intelligence we can't make good policy. this keeps happening. this goes back to the day of vietnam, the iraq war and this allegation, these allegations are extremely serious and i hope you will, i understand we have an ig investigation, but investigation, but his commanding officer, i would hope you would just be all over this. i want to ask you a direct question. have have you ever ordered, suggested or hinted to any of the intelligence command that they should sweeten the intelligence report in order to portray a more positive view of the success of our efforts in iraq or syria?

>> absolutely not. absolutely not. >> i hope you will stay on this because as you know, better than any of us, if you don't have good intelligence you are not only going into the battle blind, if it's cooked intelligence, you're going into the battle with one hand tied behind your back. i just am extremely concerned about this issue. this is a question for the record. you use the term progress in your statement a number of times. of times. progress here in progress there. not now, but for the record, i, i would like a very specific list of what you consider progress. where we are succeeding. generally, it doesn't look like that. it. it looks more like a stalemate and i think again, we should have this information and i know

some of it is in your testimony. i would like, if you could, a one pager on where you think progress has been made. >> i would be happy to bribe that sir. we will get that to you right away. >> thank you and i think from a broad question of policy, and this comes off a lot of other discussion we've had, assad and isis are evil twins. isis largely came into existence in reaction to assad. in retrospect, and like senator like senator mccain, i was very reluctant to get involved, but in retrospect, the longer we have left assad there, it has created a situation both a humanitarian crisis and a situation that has allowed isil -- isil didn't even exist when we started having these hearings. it has allowed them, it has given them it enemy and an opportunity to make hay with the population. a strategy that ignores assad, and for example, trains troops to go into syria only to fight isil but not assad, i think we need to recognize that is not a logical strategy. part of good strategic inking is

that you modify your thinking according to change in circumstances. the circumstances are, he's losing his capabilities every day. i'm sorrgeneral, i've been hearing that it every hearing since 2013. aside is about to go. he's about to collapse. i know you. he's about to collapse. i know you didn't say that today, but we have got to find a strategy that allows us to move assad aside in some way. working with the russians if necessary or the iranians because he is the irritant that is keeping this thing stirred up. finally in terms terms of our troops, the fundamental problem is we are not going to defeat isis with airpower. everybody knows that. we are trying to rely on a week force in iraq and no force in syria. how do we refine the strategy, general, and you know that in order to root them out, you have

to have troops on the ground. we don't want them to be americans. how do we break through this? to train and equip is just too little too late. your thoughts? >> we will need a greater commitment commitment from the partners we are enabling, senator. if the iraqis make the commitment to put more troops through the train and equip program we will get them trained and equipped and we will get them into the fight. >> are there signs that the iraqis are willing to do that? do they want modal back? >> i certainly think so. they want to stabilize and then take on multiple. yes i believe that. >> in terms of getting iraqis into the fight, they are opening the aperture into what units

they are putting into our training sites. that should help create additional troops. >> i'd like specific numbers on that for the record. >> certainly. we see them starting to plan ahead in terms of which units are going into the training pipeline. again that indicates a greater sense of urgency on their part. on the syrian side of the ledger, i would say, it is clearly harder to find partners on the ground on the syrian side of the ledger. one of the things we didn't envision one year ago was the partnership, if you will, that we have with our airpower and the syrian kurds and the syrian coalition that are operating with them. that won't be a enough but we are continuing to look for opportunities like that. >> i really think you need to rethink a strategy about a safe zone, no-fly zone, some protection from assad's barrel

bombs. i hate it when the chairman's right but he's been talking about this for two years and in retrospect, i think, i think he was right. we've allowed this atrocity to go on too long. it's impacting us us and the rest of europe and i think there should be a rethinking of the non-intervention strategy. not in terms of troops, but troops, but in terms of airpower in order to level the playing field and bring pressure on assad and the russians so we can negotiate an agreement because it doesn't seem to be in prospect now. thank you very, very much mr. chairman. >> thank you, in your opening statement, i apologize i had to step out and go to a judiciary committee meeting. you made a comment and i want to focus some time on through a series of questions that hopefully i can get brief remarks. you said isis is not 10-foot tall. the reason i have a have a concern with

that kind of statement is that it kind of, it's reminiscent of characterizing them as a jv team. they are a very serious threat. before. before i go forward, i want to thank everyone for your service. i know you are part of the solution. when we say that isis not 10 feet tall, they tall, they are the richest threat group of this kind in human history. to the seizure of assets for the iraqi national bank, they they seized some $820 million. last week, we we just had a memorial for 911. it's estimated that the 9/11 attacks cost about $500,000. through that one asset seizure, if my math is right, that equates to about 1600 events like 9/11. having the resources to strike that kind of damage in the homeland in middle east and

other places, i think we need to recognize one of the single greatest threats we have today. of course we have russia, north korea and iran. they are at the front line for people we have to take seriously. we have to figure out where were making progress and where were not. that leads to my question. do you feel like over the last year or 36 months or whatever makes sense to you, does isis control more or less territory or do they have greater or less influence in other areas that are emerging as potential strongholds for isis in the future? more or or less? >> less in iraq. >> what's the net #we know they are expanding elsewhere. they are changing jerseys from afghanistan and caliban and we have them operating in other areas. what's the net? more or less. >> it would be more if you consider --

>> okay do they have, if you were to compare their resources, their economic resources over the last 24 or 36 months, do they have more or less dollars to support their terrorist operations? >> less. we have targeted their resources. they make money as you know off things like oriole collection. >> kidnappings. >> right. i have long long said on a number of occasions, note not only do we have to stop the flow of foreign fighters but we have to take away their ability to finance -- >> okay i'm trying to come up with this time set of it -- bored so i can ask you the same series of questions and see where the twins are. do they have more or less influence, they seem to be winning on social media in terms of reaching out to people in the homeland and people in europe. about six hours ago some 16-year-old girl murdered her

mother in europe. she was convicted of murder as a result of being radicalized. have we made any effort on their use of social media to restrict this pressure mark. >> they do have a more effective counter messaging strategy in this area. >> it seems to be growing. in terms of trend, the ground they are taking in the places they are influencing, social media, - i mean this is an organization that is trending in the wrong direction against the greatest superpower that has ever existed i want to go back to chemical weapons. do you think, there has been reports, i only want to talk about confirmed reports -- do you think their use of chemical weapons have increased over the last 24 months or are beginning to see they are used in certain

areas in syria and iraq? more or less? >> given they had no apparent use of chemical weapons at the outset, there is some indication there is more. >> the last question i have is how we are working and i understand most of the problem has to do with iraq failing to do what they need to do to engage the sunni population, but they haven't done it. so over the course of last 24 or 36 months, has the sunni population been more or less inclined to side with isis where the conflicts are rising in iraq? >> i think we have seen considerable outreach from the prime minister and the sunni to take -- there are now 4000 sunnis and am bar that we didn't have six months of go. >> so you feel like we are winning in terms of engaging the

hearts. >> i think we are bringing more sunni fighters into the fight. >> i would agree they are less inclined in iraq to side with isis. they seen what i soul brings the table. most of the sunnis don't want that going forward. they do want it in the government of iraq. >> i think it should be. if be. if were going to have a long-term strategy with productive engagement. thank you you very much. >> mr. chairman, i want to submit for the record an extraordinary speech by robert gates in 1992 when he was head of the cia on the danger of the politicization of intelligence. it's brilliant and not announcer: on the next

riceington journal," mary the pope's visits and planned parenthood. at 8:30, karen mills discusses business and income equality. discusses student loans and income-based repayment programs. as always we will take your calls. that is live at 7:00 a.m. eastern here on c-span. after weeks of speculation, federal reserve chair janet yellen said that rates will not

increase for the time being. good afternoon. you know from our policy statement released a short time ago, the federal open market committee reaffirms the current 0% range for the federal funds rate. since the committee met in july, the pace of drop games has been solid -- job gains has been solid. the unemployment rate has come to -- declined and labor conditions have improved. inflation has continue to run below the longer run objective. partly reflecting declines in energy prices. recent global economic and financial developments are likely to put further downward pressure on inflation in the near term.

these developments may also restrain u.s. activity somewhat but has not led to a significant change in the committee's outlook for the u.s. economy. continues to anticipate that the first increase in the federal funds .ate will be appropriate it remains the case that the committee will come from the timing of the initial increase based on the assessment of the implications of incoming information to the economic outlook. i will note the importance of the initial increase shouldn't be overstated. the stance of monetary policy will remain highly accommodative for quite some time after the initial increase.

i will come back to today's policy decision in a few moments but first i would like to review recent economic developments. it's moving through the realerly volatility, u.s. gross domestic product has estimated to have expanded at 2.25% base in the first half of the year. and notably stronger outcome than expected in june when committee participants submitted economic projections. andinued job gains increases in real disposable income have supported household spending. growth in business, fixed , heldment was moderate down in part by a significant contraction and oil drilling activity as a result of the this drop in oil prices

year. moreover, net exports were on gdp growth in the first half of the year. reflecting the earlier appreciation of the dollar and weaker foreign demand. the committee continues to expect a moderate pace of overall gdp growth even though the restraint from net exports is likely to persist. the labor market has shown further progress this year toward our objective of maximum employment. over the past three months, job gains averaged two wanted 20,000 per month. the unemployment rate at 5.1% in august was down 4/10 of a percent from the latest reading available. although that decline was accompanied by some rejection -- reduction in the labor force participation rate. a broader measure of employment that includes individuals who

want and are available to work but are not actively searching and people who are working part time but would rather work full-time has continued to improve. , that said some cyclical weakness likely remains. all the unemployment rate is close to most estimates, the participation rate is still below estimates of the underlying trend. voluntary part-time employment remains elevated and wage growth remains subdued. inflation has continued to run below the 2% objective, partly reflecting declines in energy and import prices.by colleagues and i continue ofexpect that the effects these factors on inflation will be transitory. however, the recent additional decline in oil prices and further appreciation of the

dollar may mean it will take a bit more time for these effects to fully dissipate. as these temporary fix state and is labor market improves, we expect inflation to go back to the 2% objective. the committee has taken note of recent declines in market-based measures of inflation compensation and will continue to monitor inflation carefully. this assessment of the outlook is reflected in the individual economic projections submitted for this meeting by fomc participants, which now extends through 2018.

as announced in the minutes from the july meeting, we are introducing a modest enhancement to the summary of economic projections by publishing the median projection across fomc participants. these medians provide a concise summary statistic of participant perspectives. they should not be interpreted as a live view or -- as a collective view. teach participants projections are conditions -- each projection is conditioned on the monetary policy. participants increased their projections are economic growth this year compared with projections made with the june meeting. projection iswth 2.1% for this year and rises to 2.3% in 2016. somewhat --

median growthe projection declined toward its longest rate. the unemployment rate projections are lower than in june. at the end of this year, the median unemployment rate projection stands at 5%, down 3/10 of a percent from june and close to the median estimate of the longer run normal unemployment rate. committee participants generally see the unemployment rate declining a little further next year and leveling out. finally, participants project inflation to be very low this year, largely reflecting lower energy and nonenergy import prices. as labor market conditions continue to firm, the media inflation projection rises from

just four tense of a percent this year to 1.7% next year and 2018.s 2% after the path of the median inflation projections is lower than in june. the outlook abroad appears to have become more uncertain as a late and concerns of that growth in emerging markets have led to notable facility in financial markets. , including the drop in commodity prices, the further appreciation of the dollar command widening risk spread have tightened financial conditions to some extent. these developments may restrain u.s. economic activity somewhat and are likely to put further .ownward pressure on inflation

given the significant economic and financial interconnections between the u.s. and the rest of the world, the situation bears close watching. returning to monetary policy, we recognize there is been a great deal of focus on today's policy decision. the recovery from the great recession has advanced and domestic spending appears robust that an argument can be made for a rise in interest rates at this time. we discussed this possibility at our meeting. however, in light of the heightened uncertainty abroad and the slightly softer expected that inflation, the committee judged appropriate to wait for more evidence, including some further improvement in the labor market to bolster its confidence

that inflation will rise to 2% medium-term. i do not want to overplay the implications of these recent developments, which have not fundamentally altered our outlook. the economy has been performing well and we expect it to continue to do so. as i noted earlier, it remains the case that the timing of the initial increase in the federal funds rate with hunt on the committee's assessment of the implications of incoming information for the economic outlook. to be clear, our decision will not hinge on any particular data release or on day-to-day movements in financial markets. instead, the decision will depend on a wide range of economic and financial litigators and our assessment of the cumulative implications for actual and expected progress

toward our objectives. let me emphasize the specific timing of the initial increase in the target range for the federal funds rate far less important to the economy than the entire expected path of interest rates. once we begin to remove policy accommodation, we continue to expect economic conditions will evolve in a manner that will warrant only gradual increases in the target federal funds rate. compared with the projections made in june, many fomc participants lowered somewhat their past to the fact that cap -- paths to the federal funds rate. most participants continue to expect economic conditions will make it appropriate to raise the target range for the federal funds rate later this year. although four participants now expect with such conditions,

they will not be seen until next your later. the median projection for the federal funds rate rises to and 2% in late 2017 and 3.5% in 2018. 2016 and 2017, the medians are about .25% below those projected in june. the media projected rate in 2017 remains below the rated most participants expect to prevail in the longer run despite the fact the median and inflation close to the 2% objective. a numbernts provided of destinations for their low federal funds rate projections. particular,ed in

the residual effects of financial crisis, which are likely to continue to strain spending for some time, as well as headwinds from abroad. the restraining influence of , ase selectors -- factors the restraining influence of these factors unreal activity dissipates further, most participants expect the federal funds rate to move to its longer normal levels by the end of 2018. i would like to underscore it at the forecast of the appropriate path of the federal funds rate, as usual, are conditional on participants' individual projections of the most likely outcomes for economic growth, employment, inflation and other factors. but our actual policy actions over time will depend on how economic conditions evolve, which is quite uncertain. if the expansion proved to be more vigorous than currently

anticipated, and inflation moves higher than expect, then the appropriate path would likely follow us deeper and higher trajectory. projecteper and hired three. then the appropriate character read -- trajectory would be lower and less steep. the committee's sizable holdings of longer-term securities should help maintain accommodative financial conditions, and promote further progress toward our objectives. thank you, let me stop there. i would be happy to take your questions. steve, cnbc. madam chair, this notion of uncertainty and economic and global development, is it fair

to say that it could be many months before those global developments work their way through the u.s. economic data, and that you would not have the certainty that you are looking for to raise interest rates for many months well into next year? chair yellen: steve, i think you can see from the sdp projections that most participants continue to think that economic conditions will call for or make appropriate an increase in the federal funds rate by the end of this year. for participants moved their projections into 2016 or later, but the great majority of participants continued to hold that view. of course, there will always be uncertainty. we can't expect that uncertainty to be fully resolved. but in light of the developments we have seen, and the impacts on toancial markets, we want

take a little more time to evaluate the likely impacts on the united states. as i mentioned, the inflation outlook has softened slightly. we have had some further developments, namely lower oil prices, and a further appreciation of the dollar, that put downward pressure in the near-term on inflation. we fully expect those further effects like the earlier moves in the dollar, and in oil prices, to be transitory, but there is a little bit of downward pressure on inflation. we would like to see some further developments. this importantly, could include further improvements in the labor market that would bolster our confidence that inflation will move back to percent over the medium term.

-- 2% over the medium term. >> can i ask about the next meeting in october, do you view that as a live meeting even though there isn't going to be a scheduled press conference at that time? kind of developments would you need to see to be confident in moving in the near-term, is it more important in the financial markets or the upcoming data? thank you. chair yellen: as i have said before, every meeting is a live meeting. , where the committee can make a decision to move to change our target for the federal funds rate, that certainly includes october. as you know, and i have stressed previously, where we to decide to do that, we would call a press briefing and you've toticipated in an exercise

make sure that you would know how to participate in that press briefing, should it happen. yes, october remains a possibility. be looking at incoming developments, both financial and economic, to try to make sure we feel that the u.s. economy is doing well. i want to emphasize domestic developments has been strong, we see domestic demand growing at a solid pace, the labor market continuing to improve. of course, we will watch incoming data to confirm how expectation that that will continue, and we of course will watch global financial and economic developments. i can't give you a recipe for exactly what we are looking to see, but as we say, we want to see continued improvement in the

labor market, and we would like to bolster our confidence that inflation will move back to 2%. further improvement in the labor market does serve that purpose, to put the other things we would see that could bolster that confidence, but further improvement in the labor market will serve to do that. gym from the l.a. times. there were a group of protesters out here before the meeting, there was a similar group at jackson hole. they and others have warned the fed not to raise rates, out of concern that the labor market is not fully healed, wages have not risen fast enough. what impact has had on you and your colleagues and your decision today? chair yellen: we have been receiving advice from a large number of economists and interested groups. that is of course appropriate,

and we value hearing the opinions of many differing groups and individuals with different perspectives. but at the end of the day, it is the committee's job to come together to analyze the data that we have on the economy, to decide how it affects the outlook, and to try to deliberate and arrived at a committee judgment about the appropriate path of policy. that is what we did today. closeaid, although we are to many participants, and the median estimate of the longer run normal rate of unemployment, at least my own judgment -- and this has been true for a long time -- is that there are additional margins, particularly relating to very high levels of

part-time involuntary employment, and labor force participation that suggests that at least to some extent, the standard unemployment rate understates the degree of slack in the labor markets. but we are getting closer, the labor market has improved. past, we said in the don't want to wait until we have fully met bothf our objectives to begin the process of tightening policy, given the legs in the operation on monetary policy. kate davidson from the wall street journal. do you think over the last two months that you have gotten closer to or further away from the inflation goals? separately, you have received a congressional subpoena related to the disclosure of information from the said september 2012

meeting, are you any closer to complying with that and have you turned over information to congress? chair yellen: your first question was have we come closer are moved further away from our inflation goal. we have used the same language, which is that we expect to achieve our 2% goal over the medium-term. say, as we say in our statement, recent developments seem likely to put downward pressure. we are after all way below the inflation targets. but an important reason for that is that declines in import prices reflecting the appreciation of the dollar and declines in energy prices are holding down inflation, well below our target and well below core inflation. we expect those effects to be with inflation

executions, we expect inflation to move back to 2%. in the interim meeting. we have seen some further appreciation of the dollar and further downward pressure on energy prices. that creates a bit of further that i wouldtion view as transitory. it is very likely to be transitory. i continue and the committee continues to expect that the inflation will move back to 2%. this should be a small thing. in the meantime, the labor market has continued to improve. -- tighteror market labor market moving toward full employment, is one that historically has generated a boards pressure on inflation. that bolsters my confidence in inflation.

on the other hand, we have had a in which inflation has been running below our objective. i consider it very important that we achieve our inflation objective, and defend against inflation that is persistently above our inflation objective, and also persistently below our inflation objective. only in a have not good degree of confidence that that will occur. we did take note in the statement of the decline in inflation compensation. it is hard to get a direct read on inflation expectations out of these measures. they can be pushed down by factors pertaining to liquidity, and the treasury, and the tips market, and other issues pertaining to risk premia. but we have taken note.

i would say that is something that is caught has caught our attention, and factors we are watching. a littlelike to have bit more confidence, but i would not interpret developments during the intermediate. period as significantly undermining confidence. the labor market is really important, that as it continues to improve, it has and we want to see it improve further, that there is to bolster confidence. you asked about september 2012. we are working very closely with house financial services committee that requested information to satisfy their request. we are working very closely with them. from the new york times. the economic projections you released today show that members

expressed -- expect a three-year time when the unemployment rate will be at its lowest sustainable level but inflation will not rise above 2%. that seems extraordinary. can you talk about why we would expect inflationary pressures one unemployment is at mid-level, why would inflation be so weak, and does it indicate that you are projecting much of the decade will pass without the fed reaching inflation target, does it indicate the u.s. failed to do enough to revive the economy? chair yellen: we have been very focused on doing everything we andto revive this economy, to achieve our maximum employment objectives. after we took the funds rate know, weero, as you put in place a number of other extraordinary measures, including forward guidance and

large scale asset purchases in andr to speed the recovery attain both our inflation objective and maximum employment objective. productionok at the -- projection, you can see that we see sufficient growth to push the unemployment rate. it is already very close to estimates of its learn curb run normal level. we expect the unemployment rate to fall slightly, but participants project it will fall slightly below that level. if that occurs, we would expect labor force participation, the cyclical component of that, to diminish over time. we would hope to see some decline in the portion of slack

that is reflected in high levels of part-time involuntary employment. inflation is going back in our projection to 2%. until 2018 to get there, it is awfully close in 2017, and not terribly far away even next year. fromve very large drags import prices and energy prices. over the next year or so, those and thehould dissipate, behavior of inflation should mainly, if our understanding of the inflationary process is correct, and if inflation atectations are willi anchored two, if the labor market heels, and if the healing progresses, we will see further upward pressure on inflation.

that is what we expect now. it is a slow process. it is characterized by lags, and that is why it takes a few years as the unemployment rate falls, and even overshoots is longer run normal level, it just takes some time for inflation to get back to 2%. helps theershooting cap back faster than it otherwise would. important for us and our credibility hinges on defending our inflation. from if it rises above, if we would not have over the medium-term that we want to see inflation get over 2%. we believe the policies we are fat -- following are designed to accomplish that end will do so. -- and will do so. >> thank you.

from the washington post. i want to piggyback on that question, and bring up the old threshold of 6.5% unemployment and 2.5% inflation, when the fed promised to keep interest rates low. that has assumed, or suggested the fed was comfortable with inflation rising above 2%, but you just said moments ago that you don't want to wait until inflation actually hit your target before you are ready to lift off. and wonder if you could explain that a little bit, is there a shift in how much inflation the fed is willing to accept? chair yellen: let me be clear, 2% is our objective. we want to see inflation go back to 2%, 2% is not a ceiling on inflation. we are not trying to push the inflation rate above 2%, that is always the objective. ceiling, and if it were, it would have to be

conducting a policy that on average would hold the inflation rate below 2%. that is not our policy. we want to see the inflation as rapidlyck percent -- back to 2% as rapidly as we can. but there are lines and the impact of monetary policy on the s on the impact of monetary policy on the economy. employment falls below estimates of the natural rate, only then did we start to begin "tighten" monetary policy i don't think is right. let me say, just to begin to diminish the extraordinary degree of accommodation for would likelycy, we

overshoot substantially our 2% objective. we might be faced with and having to tighten policy in a way that could be disruptive to the real economy. and i don't think that is a desirable way to conduct policy. >> gina from bloomberg news. you mentioned earlier that there is always going to be some uncertainty in the global economy. that is whatthat kept you from hiking this month. how do you communicate to markets, what is the kind of uncertainty that keeps you from lifting rates, and what is the uncertain you -- uncertainty you can overlook? chair yellen: that is a very hard question. it is why we come together and had very careful of valuations of a wide range of factors.

but at the end of the day, we are focused on two things. the path for employment, and whether or not we feel confident we are on the road that will take us to our maximum employment objective, and whether or not we see the risks around attaining that as balance. of course, there will be uncertainty around it. with that, we have reasonable confidence inflation will, over the medium-term, go back to 2%. it is really through that filter that we are trying to look at uncertainty. of course, there are many uncertainties in the global economy, but we are asking ourselves how economic and financial developments in the global economy affect the risk to our outlook for our two goals, and whether or not they that wenbalanced risks

want to wait to resolve to some extent. can you talk about what foreign developments you discussed and what you are concerned about? --assume it might be tied china, are you concerned about the chinese economy slowing, the markets there? do you have concerns about the european economy? related to stop markets can i ask you feel how -- how you feel about u.s. equity markets, because you spoke about the inmate and you saw that they were generally quite high. now equity prices have pulled back. chair yellen: with respect to global developments, we reviewed developments in all important areas before, but we have

focused particularly on china and emerging markets. expected thatg most -- as most analysts have, we have expected to see the chinese rebalance their economy. and iave planned that, don't think there are more surprises there. the question is whether there might be a risk of a more abrupt slowdown than most analysts expect. i think there were concerns the deftness with which policy makers are addressing those concerns. in addition, we saw a very

substantial downward pressure on oil markets. those developments have had a significant impact on emerging market economies that are important committees -- producers of commodities, as well as more advanced countries, including canada, which is an important trading partner of ours, that has been negatively affected by declining commodity prices. net and players of energies are positively affected, but emerging markets has been negatively affected by those developments. we have seen significant outflows of capital from those countries, pressures on their exchange rates, and concerns

about their performance going. a lot of their -- our performance has been on risk around china, but not just china, emerging markets more generally and how they may still over to the united states. in terms of thinking about financial developments and our reaction to them, i think a lot of developments -- we don't want to respond to market turbulence. the fed should not be responding to the ups and downs of the markets. it is certainly not our policy to do so. but when there are significant financial developments, it is incumbent on us to ask ourselves what is causing them. of course, while we can know for sure, it seems to us as though concerns about the global economic outlook for drivers of those financial developments.

they have concerned is, in part because they take us to the global outlook and how that will affect us. to some extent, we have seen a tightening of financial conditions during the interim meeting period. the stock market adjustment, combined with a somewhat stronger dollar and higher risk spread does represent some tightening of financial conditions. in and of itself, it is not the end of things in terms of policy, because we have to put a lot of pieces together. we are looking at a u.s. economy that has been performing well, and impressing us by the pace at which it is creating jobs, and the strength of domestic demand. have that, we have some concerns about negative impacts

from global developments, and tightening of financial conditions. we are trying to put all that together. important, we say in our statement, despite of all of this, we continue to view the of economic activity and labor markets as balanced. there are a lot of different pieces, different cost currents, some street and indeed outlook and some creating concerns, but overall no significant change in the economic outlook. >> just to piggyback on the global considerations, as you say, the u.s. economy has been growing. are you worried given the global interconnectedness, low inflation globally, all of the

other concerns you spoke that, that you may never escape from this zero situation? chair yellen: i would be very surprised if that is the case. that is not the way i see the outlook, or the way the committee sees the outlook. can i completely ruling out? i can't completely rule it out. that is an extreme downside risk of myear the center outlook. michael mckee from bloomberg radio and television. if the economy develops as bit projections suggest, you will see improvement in labor market, but it won't push inflation of any faster. i'm wondering what the argument is for raising rates this year. even allowing for long and variable lags, you are not

forecasting and inflation problem -- problem that would need a faster rate path for at least a couple of years. if we maintain a highly accommodative monetary policy for a very long time from here, and the economy performs as we expect, namely it is strong in the risks that are -- and the risks that are out there don't materialize, my concern much morebe tightening in the labor markets then you see in these projections. lags will be probably slow, but eventually we will find ourselves with a substantial overshoot of our inflation objective, and then we will be -goced into a kind of stop

policy. we will push the economy so far, it will have become overheated, and we will have to tighten policy more abruptly than we would like. slow, steadyving growth, improvement in the labor market, and continued inrovement in performance the labor market, i don't think it is good policy to have to then slam on the brakes and risk a downturn in the economy. >> one of your colleagues said they would like to see negative interest rates. i did not expect to see that. what do you make a negative interest rates as a potential source of new stimulus if the

fed were to do something more? to doing qe, does negative interest rates -- should it be part of the fed's toolkit essentially? >> negative interest rates was not something we considered very seriously at all today. it's not one of our main policy options. committeeipant in the would like to see additional accommodation and is concerned by the inflation out luck and thanks that we need additional stimulus, additional accommodation to provide him propose doing so by moving interest rates negative. that's something we've seen in several european countries. it's not something we talk about today. i don't expect that we're going to be in the path of providing additional accommodation, but if

the outlook were to change in a way most of my colleagues and i do not expect and we found ourselves with a weak economy that needed additional stimulus, we would look at all of our available tools and that would be something we would evaluate in that context. associated press. in july when you were talking to us, you said that you yourself the firstacted to see rate hike before the end of the year. is that still your expectation? when you talk about the developments in financial markets and what caused the august turbulence -- you mentioned china -- you did mention the prospect of a fed rate increase. do you think that would slow as well? you asked me about my own expect haitians. i would say -- i speak on behalf of the committee and try to

explain committee decisions. we do not identify who's who in terms of our projections with the funds rate. i do not want to change that and my personalus be on views on the past. i have characterized the a forecastiew as prevails likely, if it , call for a funds rate increase later this year. i think that's a fair summary of the committee's assessment of things. i think you've also asked me about uncertainty about our own policies? >> the fact with market turbulence, people concerned about the fed about to raise interest rates.

you did not mention that is one reason for the turbulence. the main drivers of the turbulence have been concerns about the global outlook. that is how i read it. of course i know there is uncertainty about fed policy. as i mentioned, we are well aware that there has been a huge focus on the decision today. i would ask you to appreciate that there are a lot of crosscurrents in economic and that wel developments need to take into account in deciding on what the appropriate course of policy is. not make continuous decisions every single they about our policy. we meet periodically. darndest to pull together the best analysis we intonto exchange views arriving at committee decisions. i do understand during this time

that every word that an fomc member has said has been the that for its potential implications for what our decision will be. i think that's an unfortunate state of affairs, but i understand and i think it's natural when you are at a point when conditions may be falling in place for there to be a shift in policy. it's natural that should have been. extent, to some contribute to uncertainty in financial markets. michelle, bbc news perry and talked about the strong dollar. do you see your policy actions affecting the dollar? is it something you're considering when you make a policy decision? so monetary policy -- u.s.

monetary policy -- is directed towards trying to achieve the goals the congress has laid out for us. when monetary policy titans and interest rates rise, it commonly is the case either when it happens or an expectation that interest rate differentials globally do tend to induce capital flows that have impacts on exchange rates. often hasy policy some effect on the exchange rate . it is not in my view the main channel by which monetary policy works. it's one of a number of different channels by which monetary policy works, but it does have some impact on exchange rates.

yes, we need to take that into account. >> greg from market watch. i wanted to see if you would shift gears a little to talk about the housing market. you said in a statement that it has improved. how much are you counting on the housing market for growth going or especially since the committee sees rates rising? thank you. we are envisioning further improvements in the housing market. depressed.very housing starts are below levels that seem consistent with underlying demographics, especially in an economy that is creating jobs. we had lots of people who are forl double the and demand housing should be there and should materialize as the job

market improves and income growth improves. are we counting on it? housing is now a very small sector of the economy. and --ot the driver of ais is my own forecast -- driver of ongoing improvements in the u.s. economy. , butays a supporting role consumer spending is the main by decentstered outlook for investment spending. but i would continue to expect housing to improve. , ifmber we are envisioning things go as we anticipate, a of increasesl path in short-term interest rates over time