captioning spons by newshourroductions, llc >> woodruff: good evening. i'm judy woodruff. on the newshour tonight: wall street woes. the stock market plunges to one of the worst weeks the u.s. has seen in years. then, republicans release their controversial memo. a look at the highlyted document alleging missteps by the f.b.i., and what it means for the russia investigation. plus, i sit down with outgoing chair of the federal reserve, janet yellen, to talk the atate of the nion's economy and what she sees for the financial future. al we've enjoyed solid growth. it's helped he labor market and that's great, but the pace isn't what we would ideally like to see. >> woodruff: and, it's friday. mark shields and david brooks

consider what the publht between the white house and f.b.i. means for the state of our democracy. all that and more, on tonight's pbs newshour. >> major fundinghoor the pbs e has been provided by: ♪ moving our economy for 160 years. bnsf, the engine that connects us. >> consumer cellular.

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>> woodruff: a sweeping sell-off on wall street, capping off the ocrket's worst week in two years. lost more than 2% in value, after a long period of calm andecord highs set just one week ago. the dow jones industrial average unged 665 points to close near 25,520. the nasdaq fell near points, and the s&p 500 dropped almost 60. all this unfolded hours after news that the u.s. economy added 200,000 jobs in january. but, wages rose at the fastest pace in more than eight years, fueling the fears of inflation and higher interest rates. for more on all this, we turn to liz anne sonders of charles schwab. liz anne, thank you for j.oining what happened?

>> i think it was a number of things. you pointed out the the year over year increase in hourly earngs jumpe 10.9%, a en-year yield in treasure a blrough 2.8 on the up side. the last time we had a pullback in the market a week or so ago it was when ten-year yields went ove 2.7. the flavor this year is different where we're starting to see ilation, develop traction and concerned that will result in titer monetary policy, but it's a 2% drop. >> woodruff: right, we have to eep that in mind. some people have been talking about a correction, a bubble in the market. could that be what's going on here? no, i don't think it's bubble. what i think was one of the problems that may have led to a bigger decline than maybe the fundamental suggested was appropriate is sentiment got quite a bit frothy. after nine years of skepticism about this bull market, in the last couple of months we noticed

a real significant retur particularly in individual investors that excessive optimism kicd in. i would argue froth that built up in the up phase of the market set this up. admittedly changed news in terms of inf >> woodruff: quickly, do you expect this selloff will continue? >> you know, friday selloffs are date little difficult. they have a tendency to carry over into monday. we may not be finished with this, but i don't think this is indicative of the next bear yarket. i think it will o happen when the stock market sniffs out the 'txt recession and we d think this is on the horizon but this is probably a healthy pullback. >> woodruff: liz anne sonders of charles >> woodruff: and we will hear from federal reserve chair janet yellen about the markets broadly, in a rare interview, later in the program. tonight's other major story is the release of a highly

contentious congressional memo on the russia investigation. congressman fo devin nunes of the house intelligence committee, any republicans shows abuses and bias. lisa desjardins begins our coverage. >> desjardins: president trump personally announced the decision to release the nunes memo. >> the memo was sent to congress. it was declassified. ngress will do whatever they're going to do. i think it's disgrace, what's happening in our country. a lot of people should be ashamed. >> desjardins: the memo, written by republicans on the house ilintnce committee begins with some stunning language. it speaks of "concerns with the legitimacy and legality" of how the d.o.j. and f.b.i. have worked with the fisa-- or foreign intelligence surveillance court-- as

there is a "troubling breakdown of legal processes." what is that based on? the memo centers on et surveillance of carter page, who was an advisor to then-candidate donald trump for some six months in 2016. republicans charge that the f.b.i. and d.o.j., including top officials james comey, rod rosenstein and andrew mccabe, got permission to spy on page based on flawed sources that biased against trump, a that the agencies knew that and hid it. specificly, the memo says that officials did not disclose that the trump opposition research dossier put together by christopher steele was funded at one point by the democratic national committee and the hillary clinton campaign. another charge? that christopher steele mself was biased, telling a justice official in september of 2016 he was "desperate that donald jump not be elected." one more: that ttice official he told, a man named bruce oh himself had conflicts-- th his wife worked r the company behind the dossier. this a matters far beyond carter page, because republicans say this information sparked the atmuch wider russia investn by the f.b.i., now led by

special counsel robert mueller. some are using that to question that investigation. democrats say that is the real and political objective here, to undermine mueller's idvestigation. ent trump was asked today if he is now more likely to fire puty attorney general rod rosenstein, the man overseeing the russia investigation. >> you figure that one out. >> desjardins: meanwhile, democrats arguedhe republican memo is wholly misleading. for example, it shows the date of the survelance request, october 21, 2016, but that was nearly a month after the trump campaign had said carter page no longer had any role with them. another example: democrats insist the steele dowas only one factor in the surveillance, and republicans have left out the others. the f.b.i. said today it takes its obligations in this area very seriously, and that it was given only a limited opportunity to respondo this material. what's next? the ranking demoat on house telligence, adam schiff, is working to clear the release of

a sepate, democratic memo. for the pbs newshour, i'm lisa desjardins. >> woodruff: this evening, f.b.i. director christopher wray toldis employees in a letter "talk is cheap. the work you do is what will endure." ld the day's other news, chaos un in a lansing, michigan courtroom, as a father of three victims of larry nassar tried to attack the former sports doctor. randall margraves spoke up after two of his dauters told the court how nassar had sexually abused them. first, margraves asked to have dgve minutes alone with nassar. the said no. >> no, sir, i can't do that. >> would you give me one minute? >> you know that i can't do that. that's not how our leg system works. >> well, then, i'm going o have to-- ( yelling ) >> woodruff: margraves later apologized, and ere judge said is "no way" she will charge him with a crime. nassar week for abusing young women at

a sports club. r is already serving up to 175 years for simiimes at u.s.a. gymnastics and michigan state university. is word of a new migrant tragedy off libya. the u.n. migration agency says it apprs some 90 people drowned today when a smugglers' bat capsized. most of those rd were thkistanis. last mabout 250 people died trying to cross the mediterranean, mainly from libya to italy. russia is making a new move to militarize disputed islands off japan. moscow announced last night that it is sending fighter planes to one of four islands that soviet forces seized at the end of world war ii. japan insists the islands are its territory. and back in this country, flu season keeps getting worse. the centers for disease control and prevention saitoday the outbreak is now the worst since

the swine flu back in 2009. last week, 42 states reported high patient traffic for the flu, up from 39 a week earlier. still to come on the newshour: o o different takes on the now-public memabout the russia investigation. changes to u.s. nuclear weapons, and when they might be used. outgoing fed chair janet ydilen joins ususs the nation's economy. and, much more. >> woodruff: we return now to the memo released today by the u.s. hse intelligence committee. i spoke earlier with two of the members of that committee. we start with repuican will hurd of texas. i asked what informationas so explosive to warrant releasing the document, despite calls byll the inence community to f ep it classified.

well, i don't knowd describe it with the adjective explosive, but what the information in the mo questioned asked is should federal law enforcement be lowed to use unverified information, circur reporting and rumors in a title 3 court to request arequest request a f.ia this is about providing good oversight of federal law enforcement. lhis is not, in my opinion, about the mer investigation. webelieve bob mueller should be alto turn over every rock, pursue every lead to make sure we know what the russians are trying to do in our elections. but this is congress' responsibility to the american people to provide oversight and ensure that our civil liberties are being protected. >> woodruff: i'm sure you know those who are defending the f.b.i. here say that it did follow procedure very carefully and it relied on more than that

controversial steele dossier, so-called, to make its case. >> a again, i expect them to make their case and to defend their actions. whether or not other information was ed is immaterial. the former director to have the f.b.i. himself said that some of the material that was used was salacious and unverified. and then another piece of inrmation, the yahoo news article, relied on that same information, which circular reporting, and it was being used as confirmation of the original source. and third, rumos from another host government, another government. so whether or not more information was used or not, to me, is ne question. it's why was that kind of information used? and to me, a a professional intelligence officer, judy, as you know, it spent alm a decade as undercover officer in

the c.i.a., protecting sources, gathering information, my job was to determine the difference between information and i intelligence. s comfortable releasing this information because, as you've looked, none of this damages national security. >> woodruff: well, that is the argument democrats are making, that this damag the intense community, that it does long-term damage to the agencies that do thisme fundaal workday in and day out. w >>ld disagree with that. this is not a criticism of rank and file members of the f.b.i. vve had the honor of sng side by side with them. this is about making sure the political leadership of these organizations are crossing every t and dotting eve i. we give a lot of responsibility rtand authority to the dent of justice and f.b.i., and that authority every single time should be used appropriately, and i think this is a case where

i'm firmly in opposition of using unverified information in a court. >> woodruff: do you believe deputy attory general rod rosenstein or any other top official at.j. or the f.b.i. should lose their job over this? >> no, i think this is part of oversight, making sure that we are ensuring our agencies are operating the thy tha're supposed to. there's currently a departmen of justice inspector general that is doing a review and apparently i think a draft report has been produced. i think that's also another toon rder for us to look at our agencies. it's just unfortunate, i think, that all this information is going to be used bipartisans to promote their partisan position. >> woodrlyuff: very quick will you vote to release the democratic memo in your commi

committee? >> of course, as long as it dirs of existing ongoing internlings which i think we can take out, but, of course, i would support that. >> woodruff: representative wi hurd of the house intelligence committee. yank you very much. >> tha. >> woodruff: the author of that democratic memo is inpresentative adam schiff of california, ramember of the u.s. house intelligence committee. i spoke with him just a short time ago. ungressman schiff, thank for joining us. you are one of the few people who have seen all the classified information that underlies this memo, but what i want to ask you is criticism that essentially at we have here f.b.i. officials who relied on inadequate information, on wt me people are calling circular news and rumors to put this request for surveillance together. yeah, that's just not accurate. and if you could read the entire f.i.s.a. court application you could see the body of evidenco they put b the f.i.s.a.

court. there are a number of things directly misleading in the public memo and you alluded to one of them. there is the suggestion a yahoo news article was used to corroborate steele when steele was the sourcef the article. that's not how the article was used in the application, so this is selectively pulled out and presented in a misleading way. the application also had a lot of other information ability abt carter page this doesn't discuss and you can see in the discussion they include about george papadopoulos that is misleading that if they couldn't show conspiracy between papadopoulos and page, the i haven'before the court. there was rumor ofe stoln e-mails. very relevant for the f.i.s.a.

court. you can sure pick information from any application and mislead people and that's what's been done here. >> woodruff: congressman, one of the main points republicans are making is that this mo proves that there was political bias at work insidehe f.b.i. when they were seeking to pursue this inves.tigati >> yes, they make that accusation. they suggest in the beginning to eave the memo that this shows some sysmic abuse, some politically motivated abuse but ey don't show evidence of that. the suggestion is that because they didn't include certain thin in the appication, it must have been because they had a corrupt motivation. when the reality is that some of these claims are simply untrue and, in the context of the full application, you can see tjust how untry are. they make statements for example ability not disloewsing the political bias or app political actor may have been involved in supporting christoph. steele's wo that also misstates what's in the application. ubw we hope our own response

will be madec soon so that the public can see a more complete picture, but even we e not publishing the entire f.i.s.a. application. this is just not howoversight is supposed to happen. what should have happened here, judy, if w were serious about oversight is you invite the f.b.i. in and say did you include this and if you didn't what was t reason why. you give them a chance to answer. here, en we ask that the f.b.i. come before our wammittee, the chairman said no, i don' the committee members to hear from the f.b.i. ight.is an overs that's a political hit job by the selected publicaon of misleading information. >> woodruff: in the end, congressman, republicans also say that this will not do damage to the work of the. f.b.i also simply an effort to look after what americans cherish in their civil liberties. >> well, of course, that's not true. ohe whole point of it is to d damage to the f.b.i. and damage eo the mueller investigation. again, if they werious about this being oversight and not just designed to undermine

the investigation, they would have brought these agencies before the committee. that's what we do whenever we do oversit and they certainly wouldn't accomplish one memo and not the other. if they're really interested in transparency, they would have been transparent. the goal here is to try to distract attention away from what the russians did d what the trump campaign they have done in combination with the drssians. >> wf: congressman adam schiff representing the house intelligence committre. coman, i know we'll be wanting to talk to you more in the days to come. thank you. >> woodruff: the trump administration released its blueprint for amerra's nuclea arsenal today. it continues the obama administration's plans to rebuild all of america's nuclear-armed submarines, aircraft and missiles, but it also calls for deploying newpa

nuclear lities on submarines and ships. as nick schifrin reports, pentagon officia a response to what russia and china are doing. critics say the plan wa l spark new arms race. . schifrin: for more than half a century, the uclear arsenal was designed tr nuclear attack on america and allies. today, the trump administration said the u.s.' nuclear air, land sea weapons aren't stron enough. >> we cannot afford to let it come obsolete. >> schifrin: the u.s. says it's trying to cope with adversaries increasingly threatening and complex. russia is modernizing its seclear arsenal, and warns it's willing toelatively small nuclear weapons. china is expanding its conventional militiny, and easing its nuclear capacity. ( missile launch ) and north korea is on the verge of creating a viable nuclear sapon that could hit the u.s. depuretary of defense patrick shannan released today's nuclear posture review, or

n.p.r. >> this n.p.r. ensures we can deter any potential adversary, because they are not all alike. >> schifrin: the review callsin for deploynew, relatively small nuclear weapons carried on submarines, and bringing back nuclear-tipped cruise missiles for ships. the review also says the u.s. would consider using nuclear weapons in response to non- nuclear attacks, such as strikes on critical infrastructure. john rood is the undersecretary of defense for policy. >> in the context of a non-nuclear attack on the united states or allie was strategic in nature, that imposed substantial impacts to our infrastructure, to our people, that we would consider that context in evaluating the appropriate response, perhaps to include nuclear weapons. >> schifrin: the administration maintains the obama adminiration goal of eliminating nuclear weapons, but it sees the world as more dangerous than any time since the cold war. >> perhaps someday in the trture, there will be a magical moment when the cos of the

world will get together to eliminate their nuclear weapons. unfortunately, we are not there yet, sadly. >> schifrin: more than halof the u.s.' nuclear infrastructure is 40 years old. the obama-era modernization was estimated to cost $1.2 trillion, and today's additions don't even have a price tag. but the administration says, muatever they cost, it pales compared to more costly war. so, are the trump administraon's nuclear plans a good idea? sp get two views. jon wolfsthal waial assistant to the president and selor director at the natio security council for arms control and nonproliferation during the obama administration. he is now director of the clear crisis group, a non- profit advocacy organization. and, rebeccah heinrichs was an adviser on military matters and freign policy to republican representative trenks, who served on the house armed iorvices committee. she is now a sfellow at e e hudson institute.

and welc you both. >> thank you. >> schifrin: jon wolfsthal, let's start with you.ve do you belhat the trump administration's plans for new nuclear capacity actuaey increases hances of some kind of nuclear conflict or using nuclear weaponnk >> well, i the goal to have the npr was to reduce the risk uclear war but i think the new programs they're supporting lower te nuclear threshold to make the use of nuclear weapons more likely. i don't see how a pential adversary will know if we're launching a low yield, high yield orconventional weapon if we're going to intermix our capabilities this way and the goal of the nuclear policy is to have clarity but we've ended up with ambiguity. >> schifrin: so is there more am bm my duty? >> no, the point is to lay out the administration' for decreasing the chances for nuclear conflict, a deterrence report. most of the report is very

similar, got a lot of overlap from the 2010 obama npr committed to the nuclear triad, ocommitted tventually seeing the end of nuclear weapons, but as long as they exist we have to have theability to det them. what the report centers on is raising the nuclear thrhold at the russians in particular have lowered. so that is the goal the report. it is a necessary response to the precise things hat the russian federation, in tparticular, is doing, ant is increasing the number of nuclear weapons, the threats of use, and, so, there's a gap,cl rly, in our current strategic deterrent and, so, this report is making a deliberate attempt to close that gap. >> schifrin: the specific notion is russia has relativy small nuclear weapons and the u.s. needs relatively small nuclear weapons in order to riter russia's use to that. is that? >> if you believe that, then you like the fact we already have

about 500,000 low yield weapons. but i think it also ignores the fact that russia is threatening ear weaponsnu because they're conventionally inferior to the united states. they haveby no choic to threaten nuclear weapons because arey know they'd lose a conventionalo n.a.t.o. or the u.s., which is the same thing we threatened in the '60s, to escalate to thenu ear response to a conventional attack. i understand the desire to deter and i think it's an iortant one and the language on npr in deterrence is sound. the problem is russia will look at these newcapabilities and gyey're not going to change their stra they will say they can beat us conventionally and on the nuclear front, so we need to take even more asymmetric steps and that will increase the risk of accident. when the obstruction negotiated new start treaty which cut strategic nuclear reps, the russian regulars fused to include the tactical armed dnuclear weapons in thel.

what we're doing is not working. the current ttical nuclear weapons we have are not ready enough. so if they were, then the russians would not perceive this so we have to do something now, immediate that provides a immedie response to raise the threshold. doesn't matter what we think. what matters is what the russians think and clearly they see a weakness. is report works to -- build up that weakness and provide a deterrent that the russians actually change their calculus that they might get away with delivering one of these ww-yield nukes. >> schifrit we're doing now isn't working, so yd worke on the last review in 2010. this review tas about how t u.s. should respond to non-nuclear strikes. did what you hear today and read in the review, was it demonstrably dif20rent than the version you worked on?

>> i think this npr was designed to look and sound like the obama npr but the detai are different. president obama said we want to ut nuclearorld witho weapons and reduce the role of nuclear weapons. we're going to reduce the role nof nuclear weapons i our national security strategy and the number. this npr says we'llncrease the role of nuclear weapons. the goal of deterrence are the same but the circumstances to use them arbroader. we said specifically massive chemical attack from a nuclear state might require us to respond with a nuclear weapon. this new category of nonnuclear strategic attack against critical infrastructe, against early warning are problems but arey don't have a nucle solution. my view is the threatened use of nuclear weapons in these circumstances simpl't credible, they will weaken the credibility of our other deterrence and assurance commitments, and they're not going to reduce russia's drive into these areas. if some these threats we're hycing in cyber and space are so

great,ot invest the $1.7 trillion we'll spend on nuclear arsenal and improve our cyber capabilities. >> sifrin: does the talk of innuclear strategic strikes and respondiresponse to nonnuclear posture we view weaken deterrence? >> of course not, it increases our deterrent credibility. thobama 2010 npr did not preclude the possibility that the united states might respond with nuclearesponses in response to nonnuclear attack. it even said that they were ospecifically not going tule out that possibility because what we don't want to do is crte an incetive for adversaries to think that they might be able to get away with a slew of nonnuclear attacks against u.s. vital interests. again, the united states is trying toeter nuclear use and, in fact, any kind of attack that could pose a direct and catastrophic threat against u.se vital sts, so the point here is, again, it's to change the calculus of the adversary. clearly the russians are not

deterritory. we have to do something different. >> rebeccah heinrichs, jon wolfsthal, thank u both. >> thank you. >> woodruff: stay with us. coming up on the newshour: mark shields and david boks weigh in on the controversial russia memo, and the rest of the weeks news. but first, an interview with arguably the most important person influencing the u.s. economy for the past four years: the outgoing chair of the federal reserve, janet yellen. i spoke with her earlier today, before the markets clod while the dow was spiraling down to its worst week in two years, and after a solid jobs report was released. loe economy has grown, and the est job expansion on record has continued on her watch. mewanted to get her overall asse of the economy on her final day in office.

what's so great about the economy, i think things are lookinvery strong. the economy's growing at a healthy, solid pace. the job market the strong at this point. we have a report this morning 200,000 jobs in juary, average of 175,000 jobs a monthe over last year. we're seeing the befits of that, lmthink forst all groups in the american economy and, you know, bng able to find a job, seeing plentiful job openings and wages beginning to rise at a sghtly faster pace. you know, of course, there a still problems in the labor market, structural shifts that have created over time problems for groups. but i think, generalthe job market is strg, and inflation is low. >> woodruff: i want to ask you about many of those things,

in terms of growth, how long do you think this kind of growth can continue? another two, three, four years? >> well, the economy has been growing at 2% or a little bit over 2% for a number of yearsnd now,ne of the problems we face is 2% is not a very high number, and yet it has been sufficient pace of growth to see a lot of jobs created, a lot of tightening in the labor market, which is good because wes had o many people who were out of work after the financial crisis, it's put them back to work. it's helped heal the labor market, and that's great, but the pace is not idwelly what would like to see. >> woodruff: you mentioned the wages and job report today. it did show a nice increase in wages, but the backdrop is that veges have been stagnant for decades. >> yes. >> woodruff: do you think now,

though, we could be seeing the start of steady increasing wages for americans? ov well, i do expect to see in a tight labor marke time that the pace of wage growth will inch up. and i think if we look not just at the series that washi in moing's report that's pretty volatile, but a number of series on the part of workers, 're seeing some upward ard movement. wage growth is moderate but limited by productivity growth which is weak, so firms are not going to be wling -- or what they're willing to pay is constrained by how fast they see the productivity of their workers rising. and unfortunately, for quite some time now, that's been pretty chloe, and it limit gains in real income. >> woodruff: do you think we're in the ely stages of a

long awaited climb in interest rates that's going to wontinue? l, it's hard to tell. the economy is recovering, and we're seeing solid growth, and the federal reserve has been on f path of gradual rate increases and,onditions continue as they have been, that proce i likely to continue and, as it does, we would expect long rates to move up. >> woodruff: the markets, they've jumped around a lot this week, but overall we have seen a remarkable rise in the markets since the recovery started ni years ago. >> yes. >> woodruff: former fed sairman alan greenspan said the other day heeeing a bubble in the stock market and the bona et. are you worried about bubbles? >> so i don't want to label what we're seeing as a bubble, but i would say that asset valuations

nerally are elevated, and this is a charn acterizatioat we've offered up, for example last summer in our monetary policy report, for the stock market, the ratio of price to earnisngs which a measure valuation is near the high end of its historical range. and if we look at, for example, commercial real este and other assets, we're seeing high valuations. >> woodruff: so should ordinary americans be worried ebout the markets? >> they shouldareful and i would say diversified in their investments. i think what we look at is the likely resilience of the econo and the financial system, if there were to be a correction in market valuations. and in that regard, we have a banking system that is much stronger and better capitalized and better able to withstand a shock than prior to the

financial crisis. so asset valuations could change. i'm certainly not predicting that that would happen, but we couldn't rule that out. but i think the financial system would be resilient enough to absorb t shock. >> woodruff: financial regulations. e president, a number republicans have been very vocal and they've started to move, to roll back, to weaken the regutions that were put in place after the financial collap. are there consequences to what they're doing? >> well, in e area that'm onst familiar with in banking regulawe put in place very i strorovements to make the financial syste more resilient. more and better qualiaptyal which which is a buffer, if there are shocks, it serves to absorb losses and leave firms

able to lend toupport the credit needs of the economy. but there e calls among some member of congress for cutbacks in regulation that would be dangerous. i think we all need to remember te financial crisis, the terrible toll k on americans, the lost jobs, lost homes, lost retirement savings, and make sure that we have a financial system that will not be subject to that kind of crisis again for quite some ti, that's far more resilient. >> woodruff: janet yellen, you have been the first womanho to the job of chair of the federal reserve. have you felt additional pressure because of that, do you think? w well, i felt proud to have been the firan to hold a job. i know, when i go to international gatherings of finance ministers and central bank governorsthere are not a

ouge number of women around the table, and id love to see that improve. i'm very impressed by the contribution that women are able to make at this level and every level, and i've tried to do ta good j help show that women are able to perrmon the most important, criticajobs. i think, more generally, it's distressing to see how few women ve reached the highest levels in the kind of work that i do in economics business, finance.fe towomen, i think, are going into it -- into these fields at younger ages. the number of college majors is distressingly low. maybe 30% of college economics majors are wod n. i woke to see that improve

because i think it's a great field with many opportunities, and i think most distressing, the higher you go up the ranks, the fewer women y see. and we're really trying to understand what causes that. part of it, i think, is the difficulty in achieving an appropriate work life balance and the deman of jobs at high levels both in the private sector and in government. and i think it's important for employers think about ways to design jobs so that they have an d propriate work life balance pport. >> woodruff: you were talking to president trump about reappointment before he made the decision not to keep you on. you became the first chair of the bo td -- of federal reserve board in modern history not to be renominated after oirving a full term. how disaing was that? >> well, i would have liked to

serve an additional term, and i did make that clear. so i will say that i was disappointed not to be reappointed, but i have had the privilege and the hor of serving in very high positions inf the ederal reserve system and in government more generally for quite a long time as vice chair, president o the san francisco fed. i've really had a seat at the table throu tumultuous times, including the financial crisis and t ihe recovery ts wake, and i'm very satisfied with the career that i've had. >> woodruff: let me ask you finally about how you grade yourself as chair of the federal reserve. you put a lot of emphasis on employment, on getting people into the workforce, keeping interest rates low. you famously said, very early on, we are going to at least keep filling the punch bowl until guests have all arriv

and some were skeptical when you said that. >> well, i'm not going to try to grade myself. i think that's for others to do. lock, when the economy -- look, when the enomy is successful, it's because the workers and households in this economy, they gekup and pull up their ss and go to work everday, and businesses are thinking about how to be successful, and it the efforts of so many business people wkers, households in this economy at is responsible for the success we're seeing. but we've tried to create financial conditions and interest rate environment and financial conditions more generally that are conducive to strong growth and a recovery from the terrible toll of t financial crisis. so, when i see the unemployment rate decline to 4.1%, which is

the lowest rate in 17 years, i feel very good about the progress we've seen there. >> woodruff: janet yellen, serving your last day today as chair of tfederal reserve, thank you very much. >> thank you so much, judy. o woodruff: a quick note: speakibanking regulation, the fed announced a short time ago that it would take the unusual step of restricting the size of banking giant wellsof fargo becauswidespread consumer abuses." in 2016, wells fargo employees had previouslyet up more than million fake accounts to meet sales goals. the fed also said that it would replace four members of the bank's board of directors. >> woodruff: and now, to the analysis of shields and brooks. that's syndicated columnist mark

shieldand "new york times" columnist david brooks. gentlemen, we're going to get to that memo, but i first want to ask you about janet yellen. we were very privileged to have the only interview she didoday that aired, david, but it's very interesting to lock back at her ten -- look back at her tenure. >> it's nice to ne amal person who isn't scream ago red versus blue fight. it's a good reminder, peop tle hair views and she had a more liberal view than h, predecessot being a fed paairman like a lot of politics is about plans, ding growth and markets while reducing inflation, so it's a problem and you try to find the right erlance for the moment. whatour philosophy, you're presented with a specific problem and you're trying to findcealan you're not driven by ideology or data, your best judgment. supreme court works th way, ryople in red and blue, but they're justg to do the

job well. that happens in the pure i don't care is i and we get a false view of politics the way donald trump and nancy pelosi are screaming each other. >> woodruff: she's getting high marks because of what shebi talkedty in employment, and she was very candid about the lack of women in her field. >> first, there is no moral parody betweenancy pelosi and donald trump and david, i think, would like to withdraw at analogy or comparison. the fact is that janet yellen was refreshing. she brings a candor to it. she is an economist with a human passion for economic justice. i mean, she doesn't talk in abstractions and she's got a hell of a resume as she leaves. it's been impressive. i think david's right about her leadership and the fact that she was the firstce womanainly as a pioneer she's a pretty

strong exale for more. >> woodruff: that we will see. i mean, she's succeeded by jay powell. he starts on monday. but let's go back now to o lead story, david, and that is that memo, that long-awaited memo finally released today by the house of representatives, republicans in the house. we see it. what do we make of it? is it the blockbuster we thought itould be? >> no, it's a minibuster. you know, it's not great that the f.b.i. apparently didn't tell the courts where their information came from, that it came from the steele dossier and thed was fundy the democrats. you would like to think as a part of a normal process, we have this information, this is how we got it, that seems how the system should work. but as something that's going to derail the investigation or something that makes the f.b.i. look partcularly bad, really doesn't. to me, the main effect sit undercuts one to he the main trump narratives, and the main

trump narrative has been that this got started bause some inxture of f.b.i. partisans, obama-n people had this steele dossier and that launched this investigation. but what waslearned in the paragraph of this memo is the investigation got launched, nothing to do with the steele dossie it had to do with this conversation this guy george george ha -- george papadopoulos had with an australn in a bar. he blabbed this stuff about hillary clinton, about a month ago the australians went to the americans and said hey, what's going on here, and that was the beginning, so that undermineth main narrative this investigation is premised on democratic partisan work. that's not true. >> woodruff: if that's the case, what did the republicans tcomplish by getting this out there. y destroyed one of the rtst islands of non-strident anship in washington which had been the gang of eight. the gang of eight, judy, are the ur leaders of the congress, two in each party, and the four

ranking members and chairs of the intelligence committees. that has been historically a rather remarkable abberation from the strident partinship that has possessed our city, sadly, and tha's now destroyed. the idea that this could not have been done i regular order, there were doubts about how the f.b.i. and their sources, they didn't question the substance, , w they're going back to the souru know, on steele, which really is sort of a reac. we've learned today that devin nunes, tut author -- and i that in quotes -- of this memo, because there are strong suggestions that he was not un taided in this effort there may have been collusion with those other placs in government, that it's actually never even read the basic material.

>> woodruff: he said that in an interview. in fox news. he subconto cted that te gowdy, a colleague in the houset sonk it does nothing but damage. let's be very blunt. what it reveals more than anything else ishat this president will do anything and leave any wreck inthis wake to avoid and to somehow stop what an authorized investigation by his administration of russian influence in the last election. >> woodruff: do you agree with that? y h. i mean, there are two acts of nunes' complete malpractice is not reading the underlying material. they can make two copies. two people canead something. it seems to me, if this is the main thing your job, is spend a couple of days and read the stuff. second not reading the b.i. in to ask them questions. this is not complicated state craft.

it seems to me the basic you would do if you were trying to do something fair. but the premise has been i thinu for him and himself is there are no fair players here, norocess to be respcted here, no constitutional order that we live within. it's just they're out toet me tnd i'm out to get them and trump has made t his m.o. for the last since this whole thing is going on. i remain skeptic there's a lot of big scandreal underlying but donald trump sacting as if there is and every single real problem he's created, he's created for himself. >> woodruff: trey gowdy who did read the underlying material announced he's not running for congress again, he served five rms or ten years, and one of the comments he made in the statement, i want to serve in an institution where fairness is respected. of course, suggesting that's not the case in congress. >> hdid also add today, judy, he had 100%e confidence, ar this, in robert mueller and his

investigation. >> trey gowdy said that? . >> woodruff: my question is what the president and republicans have done undermine the mueller investigation? >> iwa think is a way into mueller they obviously laid out is to get rod rosenstein who had been confirmed as deputy attorney geral of the united states by a 92-6 vote, with such notorious conservatives as chuck schumer d dick durbin and chris van hallen all voting for him and carmela harris. but to getim replaced in hoping that somehow rachel brand who would succeed him. th woodruff: number three in justice department. >> whose reputation for integrity and experience and solilegal credentials, she's a clerk of the superior courts very professional and respected on both sides, that she would somehow bow to donald trump and get rid of bob mueller.

as we learned from david's paper's reporti of don mcghan, the white house counsel's refusal to go along with the firing of bob mueller, that ther ident is trying to do this through the back door, i think this failed as a political means. >> woodruff: but we don't know at this int what the president will do, whether try to get rid of rosenstein, that's been all the speculation. >> and he certainly left the door open. i guess what stries me is w heard from the republican from texas earlier, very reasonable t guy, trying ju do oversight, his rhetoric was 1,000 miles away from what donald trump's rhetoric has been, and 1,000 a mily from what a lot of the trump or bit has been. the precursor talk was this memo that would be scandal also worse than watergate, that this would be something so devastating. there's just ame deta from reality, no matter what side you take on this, what's in ts memo. that is sort of a way of raising the arts fear and delegitimizing

the whole process, because a lot of people won't read these four pages. they will read what donald trump said.'s ike a misreporting that sort of undermines the whole inocess. >> woodruff: speof misreporting, i should say seeaking of what the president saids like 100 years ago, onrk, but the president did give a state of the uddress this week. what endures from that? we've only got about a minute and a half but i don't want to leave vith of you without ng you a chance to talk about that again. >> the preside had two good moments in the polls, when he got a bump. when he talked seeminglya norml in the state of the union and broke with the truth on several occasions he geta lift but

normal doesn't last. >> he's doing well in the pol. he's got a bump in the republican party. citing the heroes in the balcony was positive. it gave him an uplift and prevented him from talking about himself more. i di't like the emotional mood but you have to regard it as a success for trump. >> woodruff: does it lay out an agenda for the next year.ar >> even hisy says it did not. >> when he talked ant the heros, it's o t of the fewes when donald trump didn't talk about donald trump. what he failed to mention is virtually all the heros cited other than the 12-year-old and the parents of the slain children were public emplo and it would be nice to honor and salute public employees, just the fact that they did accept government service as a high calling. >> woodruff: good note to end on. mark shields, david brooks,

thank you both. >> woodruff: on the ne online right now: as the new england patriots fa off against the philadelphia eagles this sunday at the super bowl, paul solman exploresn economic explanation for why the patriots have been so successful er the years. that and more is on our website, www.pbs.org/newshour. later tonight on "washington week," robert costa will have more on the release of the house intelligence committee memo, and how it could he long-lasting repercussions on u.s. institutions. tomorrow, on pbs newshour twekend, the trade battle n the united states and canada over milk. that's tomorrow night on pbs newshour weekend. and we will be back, right here, on monday, with a look at what can be done to stop houston, texas from repeatedly flooding. that's the newshour for tonight. i'm judy woodruff. have a great weekend.

thank you, and good night. >> major funding for the pbs newshour has been provided by: >> babbel. a language app that teaches real-life conversations in a new language. >> bnsf railway. >> consumer cellular. >>upporting social entrepreneurs and their solutions to the world's most pressing problems-- skollfoundation.org. >> the william and flora hewlett foundation. for more than 50 years, advancing ideas and supporting institutions to promote a better world. at www.hewlett.org. >> and with the ongoing support of these institutions and friends of the newshour.

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i'm thuy vu. coming up,n thou of people convicted of marijuana related offenses insan francisco are cheering a decision by the district attorney to c criminal and we'll talk with a california activist who attended president trump's state of the union address. he represents undocumented black immigrants. and we'll hear from lieutenant governor gavin newsom why vote should back him as california's next governor. earlier today, house republicand rele memo that alleges the justice department and fbi abused their surveillance powers. several democrats on the committee, including congressman adam schiff, are