Along with Rising borrowing costs for mortgages and credit cards and car loans, they remain skeptical of government and its willingness to address the challenges people face. Inflation, of course, is a complex problem. The Fed's been fighting it with a blunt tool and we made progress. Inflation is at the lowest level in the last two years, giving hope that the price of consumer goods will continue to decline.

and despite the expert's production, job growth remains strong. The country added 339 000 new jobs in May. Ohio's unemployment rate 3.6 percent is the state's lowest in 20 years. Unemployment for Black and Brown Americans remain near, remains near historic lows.

Think about what actually means for workers in In Alabama and Ohio and North Dakota and Louisiana and Minnesota and South Carolina. What that actually means for workers all over the country, it means Americans have more opportunity and choice in their lives, even in places they haven't seen a lot of options. In recent years, it means people have the power to demand raises and retirement security and paid sick days and control over their schedules means more. Americans have the Dignity of work that comes with a good job that can provide for your family.

They look for that kind of power for workers is taking us last month. wage growth outpaced inflation. That's the way it should be. Today's hearing comes at a critical time.

Last week the FED decided to pause interest rate hikes after 10 consecutive increases and to maintain the rate at its current level. For the many of us who are concerned that further rate Heights could do more harm than good, it's welcome news. The challenge you face Chair Powell is to ensure that workers continue to see higher wages while also continuing to rein in inflation. In previous hearings, you've noted with justifiable Pride how careful management of the economy helped millions of workers return to the job market.

It's those workers who stand to lose the most. If The Fed overdoes its rate hikes, loses sight of the Dual mandate and drives the unemployment rate back up. If you've also noted, Mr Chair increasing interest rates is not the only tool we have to fight inflation. The FED is not the only one with the role to play.

Congress Administration Everyone in government and corporate boardrooms must do their part. There's no reason we can't continue coming together to bring prices down or policy makers are finally recognizing what. those of us in Ohio have known for years that Outsourcing Outsourcing the production of pretty much everything May mean higher profits in the short term that it won't lead you a resilient economy with a strong middle class. In the long term, we've taken steps to strengthen our supply chains and hiring and been bringing critical manufacturing back to the U.S The chips Ag and bipartisan infrastructure.

Well, a number of things must continue that progress. Instead of lowering demand which is just economics textbook jargon for making people poor, laying off workers denying raises, it's not alluring demand We could produce more. We can build more. We can grow the economy from the middle out.

It's also our first semi-annual report from the FED since the string of bank failures this spring, those failures were caused by the same issue at the heart of so many of our economic problems. It's the Wall Street business model: Executives layoff workers. They put short-term increases in quarterly profits and their own compensation above everything and everyone else at Silicon Valley Bank at Signature Bank those in charge push their Banks to grow too big, too fast. they made risky problems the best risky bets they got massive profits Executives were paying themselves bonuses right up until the moment that at least one of these Banks crashed to most Americans That's not surprising people have gotten all too used to Big Bankers treating the industry more like a game or maybe more precisely, an endless ATM for themselves, securing the knowledge they won't pay any real price if things go wrong.

Oh, this term, as you as Senator Scott and I teamed up on a 21-2 vote yesterday. Those days for Bank Executives are over care Paul I Look forward to hearing today how the FED will protect American workers in the fight against inflation and promote an economy with a strong, growing middle class Sir Scott Thanks Thank you Chairman Chair Bowden Thanks for joining us today such an important time! Your last appearance before this committee was about four months ago, just days before the collapse of Two. Banks And while we continue to investigate those bank failures, it's important to examine the macro factors such as rising interest rates that contributed to the bank failures and the current economic stresses. American Families face every single day looking through the lens I Want to turn to you in your role as Chairman of the Federal Reserve a role that requires constant scrutiny.

Because the American people deserve nothing less than the best, we can offer them the greatest opportunity to succeed and the strongest tools to pave their path. Unfortunately, the bank failures earlier this year should confidence in our financial system. but thankfully our healthy and well-managed institutions stepped up and we have been able to weather the storm. However, I've been consistently disappointed in your Deputy Vice Chair of Supervision.

Michael Barr Just yesterday, this committee passed as Chairman Brown just said near unanimous legislation to encourage good corporate governance. But not just that, we also wanted to focus on the supervisory failure that was a part of the legislation. Those are not the same actions taken by Michael Barr I Asked him twice when he was here before the committee if he would fire bad Bank supervisors for the supervisory neglect that contributed to the epic failures of Svb and Signature. He would not commit to doing anything and I would ask you in your role as the active executive officer if you would take some action firing those responsible for missing what was clearly obvious now into all of America certainly should have been obvious to the supervisors.

I Said from the beginning that this has been a failure in three parts: the Svb and Signature. It was a failure of the bank execs. The action that we took 21-2 yesterday watch for new highs Congress is willing. There we go and hold Bank Executives Remember, if you're part of Lpp, you know exactly what we were trading.

advisory failure and that requires the FED to hold folks accountable just like Congress did. And third, the Biden inflationary economy that is drove prices really high and resulted in 10 rate increases from you all in the wake of Silicon Valley's bank's downfall. That's the type. The vice Chair released his report on the failures.

We heard directly from you that your role was to announce it to get briefed on it but not necessarily be to be involved in the work of it. So my question is as you watch Vice chair bar roll out higher Capital standards. It seems like you're very clear statements previous resistance reporting as well as working to implement Vice Chair Bar's recommendations. But as you know that the other members of the board Governor Boatman has recently said that Mr Barr wrote a report on Silicon Valley Bank's value that provided his conclusions and went on to state that the report should be used to help guide discussions among policy makers, not necessarily just to rush towards implementation of Vice Chair Bar's recommendations.

I'd Love to hear your thoughts on that path forward, if in fact, your job is a rubber stamp, the decisions of or is your responsibility to take into consideration device very quickly. If you are not part of our Lpp team, you probably don't know exactly what are necessarily what's going on right now. Uh, one thing that we're looking at was on the one hour time frame. This is why different time frames and different perspectives are so so important.

Just like we talked about it yesterday, we're waiting for the break below EMA to work towards the moving average. That's what we got today, right? That's what that's what we're testing. Now we are testing the support at the Moving Average, which just like last time, it bounced there and it bounced there, pattern centered themselves. They don't always have to.

It looks like it bounced off that moving average. That's why we jumped into Tqq and now we're approaching the potential resistance at that EMA It doesn't have to break above the EMA. It could get rejected and be sent right back down to the moving Average, but that's what we're looking for as we get closer to this potential EMA which currently sits at you know, 39.50 around that general area, so that's probably that's what I'm going to be paying attention to. Just a little heads up present the Federal Reserve's semi-annual Monetary Policy report.

We at the FED remain squarely focused on our dual mandate to promote maximum employment and stable prices. For the American people, my colleagues and I understand the hardship that high inflation is causing and we remain strongly committed to Bringing inflation back down to our two percent goal and this is and this is the responsibility. So I have a quick response for James I don't know if you guys see James in the live chat we could all say uh, what's up to change he says wow, imagine charging people to teach them moving average Strats 100 we offer and everyone offers everything for free on YouTube you can learn everything that you want online for free. but yes, if you want to be able to watch me trade live every single day Monday through Friday for as long as for when I started this right, if you want my time, if you want to be able to watch me trade which is completely different, right? we're not watching James trade.

Who's James I Don't know if you know who James is I don't I don't care who James is, Do you guys know who James is? No, No one cares. No one cares to. Even if you paid them, it would be like, you know, uh, what's it called like nails on a chalkboard? No one no one cares about James But when I do it, it's different. people like me, right? So it's a much different approach.

So James Again, you don't need to watch. You don't need to sign up. But if you want my time, if you want my assistance, then of course I'm going to charge for it. You know why? Because people value me because I'm not James I'm Ricky It's a different approach, right? Different value that I bring to the table.

Just a little heads up. James Again, you don't even have to watch this free live stream. Imagine that. Imagine not wanting, not not caring for someone, and then wasting your time watching their live insane.

But James What do I know? I'm just Ricky Loader run goal of two percent over the 12 months ending in April total personal consumption or Pce Prices rose four point four percent excluding the volatile food and energy categories. Core Pce prices Rose Four point seven percent in May The 12-month change in the Consumer Price Index or CPI came in at 4.0 percent and the change in the core CPI was 5.3 percent. Inflation has moderated somewhat since the middle of last year. Nonetheless, inflation pressures continue to run High and the process of getting inflation back down to two percent has a long way to go.

Despite elevated inflation, longer term inflation expectations appear to remain well anchored, as reflected in a broad range of surveys of households, businesses, and forecasters, as well as measures from financial markets. With inflation remaining well above our longer run goal of two percent, and with labor market conditions remaining tight, Efomc has significantly tightened. The Stance of monetary policy. We have raised our policy interest rate by five percentage points since early last year, and we've continued to reduce our security Holdings at a Brisk pace.

We've been seeing the effects of our policy tightening on demand in the most interest rate sensitive sectors of the economy. It will take time, however, for the full effects of monetary restraint to be realized, especially on inflation. The economy is facing headwinds from tighter credit conditions for households and businesses which are likely to weigh on economic activity hiring. And again, this is still a drone pal speech.

But here let me remind you: James You don't have to be here. but this is a free live stream. You don't have to be here. so if you dislike me that much, then please.

Why? Why be such a troll? Waste your time just to even be here? That's the part that just baffles me. Imagine being such a loser that you choose to spend your time in a live stream that you don't even want to be in to complain about someone you are choosing to watch and look at that. James James is just punching air right now. Wait.

James Let's compare. Let's compare very very quickly. Again, how much are you up today? Just just let's just let's just compare. So I'm up so far.

8800 on the day. Let's compare. James If you've made more money than me today, let's compare. I will give you.

Let's let's let's make What a One Five Ten thousand dollar bet. Let's see who's made more money, right? Let's see where the real value is at. Very simple. Come on.

James Let's do it. I Have to put your money where your mouth is. Let's bet what Five Ten Twenty Thousand dollars. Whatever you have to your name and let's bet very simple.

it's okay. James Again, you don't have to be here buddy. You don't have to be here. I Just want to remind you this: this live stream is free.

It's for anyone. You don't have to be here. so I choose to ruin it for other people. All right.

Just want to make sure we understand it. Before concluding, let me briefly address the condition of the banking sector System is sound and resilient as tailed in the Box on Financial Stability. In the June Monetary Policy Report, the Federal Reserve together with the Treasury Department and the FDIC took decisive action in March to protect the US economy and to strengthen public confidence in our banking system. The recent bank failures, including the failure of Silicon Valley Bank and the resulting bank stress, have highlighted the importance of ensuring that we have the appropriate rules and supervisory practices for banks of this size.

We're committed to addressing these vulnerabilities to make for us stronger and more resilient banking system. To conclude, we understand that our actions affect communities, families, and businesses across the country. Everything we do is in service to our public. Mission We at the FED will do everything we can to achieve our maximum employment and price stability goals.

Thank you Uh, thank you chair. Powell Uh Paul Donovan At UBS has discussed the role that corporate profiteering plays and persistent inflation. While inflation is falling from nine percent as you know, it is peaked to four percent, prices continue to climb because the supply shortages and corporate profiteering what we're starting to call Green inflation. Given that Rising interest rates certainly won't solve great inflation, why maintain interest rates at the current level or even consider as you suggested, raising them again given the risk of harming the livelihoods of more than a million half workers of their families? Mr Chairman Um, the committee broadly feels that while monetary policy has gotten to an appropriately restrictive level, if the economy performs about as expected that it will be appropriate to raise hikes again this year and perhaps twice.

A strong majority of the committee feels that it will be appropriate again, assuming that the economy performs as expected two times before the end of this year. We've come very far and the reason why we why we maintained our rate at the last meeting was to give ourselves more time to to stretch out the time for making these decisions. We move very quickly at the beginning and we've gradually slowed down. This is just a continuation of that Um, but we We are committed to getting inflation under control and and a strong majority of the committee feels that we're close.

But there's a little further to go with rate hikes. Well, what? Um, thank you for that answer. But Mr Chair What? What Fed Governors Call cooling down regular people where I live call them layoffs I Mean the question is, why should Working Families continue to bear the cost of fighting inflation? Why should they lose their just a quick little heads up. It looks like Uh, Tqq is slowing down and showing slight signs of a potential resistance and again, just something I'm being cautious of.

So in the last two and a half years, Black and Latino workers workers with the lowest incomes have seen the greatest gains in job opportunity, wage growth. What the FED considers too high modern economy is given these workers their first leg up in decades. If ever, we know that job losses will hurt those same workers the most. How will higher interest rates and the resulting job losses disproportionately impact black and Latino and low-income workers? Well, um, we have quite an unusual situation in the labor market where we've had persistently much higher demand for workers than the available supply of workers.

So some of the process of getting a demand and certificate back into into alignment has been taking place through a declining job openings and through lower Quits rates and through wages that are moving uh, that are still very high, but but moving into more sustainable levels of increase. So actually there hasn't been a meaningful increase in unemployment. The unemployment rate has bounced around at historically low levels, and that's fine that that would be the perfect way for this to to continue to happen. There's no guarantee that will happen.

I Would just say that it is working families who suffer most directly and quickly from high inflation and it is for the benefit of those people and all other people that we need to restore two percent inflation in this country on a sustained basis. Thank you. But in the Dual mandate suggests that those workers that obviously you look out for those jobs and those workers. but we also know that those workers are the first to be laid off.

and I I would hope that in your next meeting, the FED recognizes those disparities and and gives them real weight as you make decisions that that will likely at some point result in in more layoffs. Uh, probably my last question said she last testified in front of this committee. We've had three of the largest largest bank failures in U.S history. You alluded you explored that a bit at the end of your testimony because the executives of those banks failed at Banking 101.

Regulators took Swift and decisive actions to protect the banking system and depositors. Thank you for that. That's in stark contrast to Regulators supervisory failures in the Years Financial crisis. What actions are you taking today to prevent more bank failures and to make sure Banks do real risk management and address liquidity in other basic risks And I you may in part one, sir: I mean you can do it himself.

but um on Vice chair bar and where that takes us? But what do you do to make sure Banks do real risk management and address liquidity and other things. Do you guys think that Mr Brown smokes or no? Um, we are committed and I am personally committed to learning the right lessons from what happened in Silicon Valley Bank and the other two failures and implementing vigorously implementing appropriately. I Think there's a clear need to strengthen both supervision and regulation of banks of that size and I could be going to more specifics uh in the course of the hearing. But I do think we need to learn those lessons and I think we.

We've started to do that and it's something you know. What we saw was an unexpected bank failure overnight led to Contagion and and threatened the broader banking system. And that's not supposed to happen and we're gonna. We're gonna take appropriate measures to to to reduce the chances that something like that would happen.

Let me follow briefly that the FED plans proposing. Overalls We've talked about to existing Bank Capital requirements so we have a more resilient Bank banking sector is increasing Capital requirements for banks with 100 billion dollars or more in assets to prevent Bank future bank failures. Is that a strategy the FED plans to is willing to deploy to promote Financial stability. So we we've uh, we have not come to, there hasn't been a final proposal, there's been a draft a proposal that's been circulated, but it's in my understanding it's not final and I know things are still moving around a little bit.

So I don't really have a final proposal that I can comment on. I Do think that the that the capital increases that that are getting so much notice are really on the larger Banks Uh, there may be also some Capital increases in the proposal for for banks down to 100 billion but not below that. Um so and yesterday you said we want to in particular the G-subs the eight largest banks to have high levels, very high levels of capital and liquidity. Uh, you stand by that statement I did and I said of course we did spend years raising Capital liquidity standards a great deal on those institutions and I supported all of that and I and then I I concluded by saying that further increases uh if they are proposed will will need to be justified of course as as any change in rule would be okay I don't know where James at I think what was it someone said in the live chat I think he's taken it out on his mother.

We're talking about on the larger institutions, but frankly, throughout the entire banking system uh, pre-financial crisis, capital levels were in the single digits the last decade. it seems capital is continually being raised. My question is how much is too much and when is enough enough? We are going down a path where something happens or something goes wrong and the only default solution seems to be to raise the capital standards or the capital on the sidelines. And the the formulas that I use are really simple formulas to hire the capital standards, the lower the capital for the private sector which means fewer loans and less capital for those who are actually creating jobs.

And so when we have too much capital on the sidelines, then we have two little capital for actually creating and producing a vibrant economy at some point. If you've raised it from single digits uh, just a decade ago during the crisis, pretty quick Isis do Now Frankly, rumors are as high as 20 percent for our gcepts is a possible outcome. How much is too much that's I Think that's exactly the right question. As you, as you point out, there is a trade-off between making the banks safer and more secure, more resilient.

You want them to be very strong, particularly the largest banks so that they can continue to intermediate and lend money and things like that continue to function during an even stressful situations. But it's with Bank Capital It's always going to be a trade-off between the availability and cost of credit and how much safety and I think that's that's the question we're going to be addressing and answering as part of this process as you continue to work on fighting inflation which I think is job One one of the another simple formula for for those of us in the real world of business. Yeah, we hear a lot of celebration around the again guys, if this is your guys's first time tuning on in, make sure that if you want to partake in the live chat uh that you see other people commenting on, you do have to be subscribed to the YouTube channel which is free and make sure you turn on your post notifications. so YouTube notifies you the next time that we go live and again.

If it's not too much to ask for those that have been here for some time, if you guys can drop a thumbs up of course we'd greatly appreciate it to see if we can get a little bit over 1000 likes. Thank you! It was an inflationary impact on their on their bottom line and what that means for them is that there's a crisis for a single mother like the one that raised me or seniors on fixed incomes and and we have yet to as a nation adjust for the 500 basis points increase and how we service our debt Said differently. the more money we have to use for servicing our debt, the less money we have for meeting the needs of the American people. Therefore, sprinting Printing and spending adding a four trillion dollars after Covid was over has led to the inflation that we're seeing and that as a result led to the 10 rate increases.

So how do you as chairman of the Federal Reserve talk to policy makers about the importance of being responsible from a monetary perspective. I Know I've seen and heard your comments that that's not your lane. but certainly the actions that we take I'm looking for signs of progress if we get rejected at that same resistance. I'm just going to sell my position because there's no signs of progress.

this absolutely explosive inflation. Let me start by saying that actually you were talking about real wages a moment ago. Real wages actually did go up at the lower end of the income spectrum, and now they are probably without. but they're not as positive as we'd like to see this.

So, but tier to your real question, you know I I Would just say this that the U.S Federal budget is on an unsustainable path. It has been, so for a long time we need to. We need to deal with that sooner or later. And sooner is better than later, that's about.

But that's what I can say, You know. And that's what essentially all of my predecessors have said. We are not charged with supervising fiscal policy in any way. It's just.

but as a high level matter from the standpoint of the economy, that's what I can say. Well, here's here's another analogy that works for me: as a former Uh football player, a running back if my line is walking and I keep getting my head hammered. I'm going to say something to the line at some point I Think it's your responsibility to talk about the importance of fiscal responsibility that to the side. But last thought question for you is that Svb suffered because they're Bond Bond portfolio.

Uh, ended up carrying water in a negative way. You you have a eight trillion dollar balance sheet and Beyond every report that I've read is that your bond portfolio our bond portfolio of the FED is underwater as well. Can you talk to me about the losses that you're experiencing at the Fed? From other perspective, remember that the way the way it works the FED is when we when we buy assets during QE we pay for them with overnight uh, interest. QE means quantitative easing.

We've for many, many years during the QE era, we've earned a spread and we've been sending money to the treasury way over a trillion dollars since since QE started. and so now that race rates have gone back up to five percent, that process has has reversed. and you know we're These are paper losses. They have absolutely no effect on our ability to conduct monetary policy.

We're really on the economy. It's it's just a it's an accounting fact. If we retained Capital then that would be a different. It would look completely different.

But we don't. We give all of our profits to the Uh to the treasury. so you were giving profits to the treasury. Now you're not.

that has an actual effect. well the treasury. And then we'll have to have to borrow money that it doesn't get or raise taxes. It'll have to get the money just to to you know, carry out the spending that that Congress authorizes.

But that's not going to really, it's not going to be in. It's not going to affect interest rates and things like that much to me. I I have the holistic view of our economy where if in fact we have more fewer dollars coming in which requires us to raise taxes, that in in the end has a real impact on American taxpayers. But thank you thank you.

Senator Scott Senator Menendezvous New Jersey Thank you Chairman. Uh. After announcing the rate hike pause last week, you said that inflation has not reacted much to the Fed's Past hikes and now I met him Have been puzzled by that statement. The Fed's First Rate hike was in March of last year when non-core inflation was at 8.6 percent.

It is now four percent and core inflation has fallen as well. So that sounds like progress to me, especially when you consider that according to the San Francisco Federal Reserve, it can take more than a year for tax rank hikes to take full effect. Which means that so far, only three of the 10 rate hikes since last year are in full effect. So can you expand a bit more on that statement from last week? What? What progress do you expect to see that you currently aren't seeing? Sure.

So of course you're absolutely right. Headline inflation has come down by essentially half, but that's largely due to Energy prices coming down and commodity prices that go into food coming down and those are not I Won't say that they're not affected At All by monetary policy, but they're principally affected by other things in the economy. You know, the the war in Ukraine drove Energy prices up quite a bit. and also food prices.

That's not really. Those things are not principally a function of of monetary policy, although we probably have some effect at the margin. So we look at, we look at core inflation and we look, you know, at how tight the economy is. Um, we are seeing progress.

For example, in in Supply chains getting better. That again, is not really a function of monetary policy. really. Where monetary policy takes effect is in the service sector.

and and we, that's where we haven't seen much progress so, but we are seeing progress in other places. As you point out, inflation broadly is I'm not seeing progress with this dang trade I think we I think I'm going to get ready to sell the entire position. Just a heads up flag period for rate hikes to affect inflation has lengthened or our rate hikes as a monetary policy tool becoming less effective. I Don't think they're becoming less effective, but these are these are real questions.

And the thing with lags is this day and age. Financial conditions react before we act so the markets are already pricing in right height, so that's that's quicker. but the effect of the of those financial conditions on the economy still takes time. It it works very quickly on housing for example, but less so on the service sector which is not very interest sensitive.

So I I Don't think that that has has changed. Others have have a different View and different directions they think in which it's changed. There's also there's not uh, you know, a consensus agreement on how long monetary policy takes to affect the economy. So some people think a very long time.

Some people think right away. So I tend to think, let's look at the middle of that and you know a year or and change is uh, um, that's not a bad way to look at it, but policy actually started tightening well before that before we didn't raise rates until March but policy had already tightened substantially before the First Rate hike in March. Well, I I I will say I Know that you have a dual mandate. You know that as well.

The last Jobs report shows that unemployment is starting to take upward for women and African-Americans So I Hope that the the the Cure is not more consequential than than what we're trying to achieve. Um. Recent reports reported that there's almost 1.5 trillion dollars in commercial mortgages that will come due in the next two years, many of them held by small and Regional lenders with property values declining and interest rates Rising These mortgages could be serious liabilities for many banks. Do you think there's no forecast announced yet for CPI So as we get a little bit closer and more economic data is released, Then again, they should be able to have more of an appropriate forecast.

A website that I use for this forecast is Investing.com You can get a CPI forecast or just Google search CPI Forecast Investing.com You don't have to use that site. That site does not pay me to talk about them. It's just the free available website that as we get closer to the actual CPI data report, you're more than welcome to check it out. Hope that answers your question, try to help them resolve those issues by you know, by raising capital or or you know, dealing with what's happening and you know of course, what is happening in the office space nationally.

There's an issue with people working from home and it's just less demand. There's a sort of one-time adjustment going on. There are also some other pockets of commercial real estate where where there's some softness. So we're working with banks to work our way through this.

We're We're very aware and very focused on the problem. well. I I'm concerned that it's a ticking. Time Bomb Uh, and let me just say that last week you said that commercial real estate risks are unlikely to pose a systemic risk because the loans are broadly spread and mostly held by smaller bands.

But how can we ensure that the potential losses in the commercial real estate don't lead to the draining of assets from smaller and mid-sized Banks and then create further consolidation in the banking sector That brings us back to I Don't want to be back To 2008 when I was here and was asked to do extraordinary things? We certainly don't want to be there either. And so we're being pretty proactive about reaching out to these institutions and trying to help them get through these significant issues again. It's it's real. It's not all smaller Banks It's just some of them have high concentrations in real estate and it's not in the large Banks which of course was where the problem was in 2008-9 Angry Senator Kennedy of Louisiana is recognized for five minutes.

Thank you Mr Chairman Thank you for being here Mr Chairman and to your colleagues. Thanks to all of you for giving so much to our country. As you know, our fiscal year, our meeting the Federal government's fiscal year begins October 1. we're in the process of putting together a budget.

Um, if we pass a budget, women in Congress passes a budget that increases spending by let's say 10 percent. Roughly 650 billion dollars. What will be the impact on inflation? So if it's uh, it depends on if, of course, if it were funded by tax increases or other spending cuts. I Guess in your hypothetical it's not.

It's Adept So you know I Think deficit spending at the margin stimulates the economy at the margin. It's a big economy though, and what will be the impact on inflation they would they would be. It would probably be a small effect on inflation ultimately, but there would be an effect through stimulation of the economy. Between it would be more demand, which would just in general.

I'm not commenting on I'm not being sort of accommodating on fiscal policy here, but nonetheless it would be if there would be an effect on it. I'm just asking you about basic economics. Um I Just read a piece by one of your economists from the San Francisco Fed Mr Shapiro who's arguing that uh, labor costs have had virtually nothing to do with service. Inflation in a negligible Um is a negligible factor in broader inflation.

and I Read this stuff from some of your people and I just wonder what planet they parachuted in from Um if Congress passes a budget. In my prior example that reduces spending by 10 percent roughly 650 billion dollars. What What impact will that have on inflation? So that would you know, you'd have less stimulus for demand and it would be cutting programs if you did that. and and therefore you'd be slowing the economy down and the impact of being less demanded.

Neither of these Neither of these ideas affects the supply side at all, so less demand would mean less economic activity, less spending and that would have a negative effect on inflation. More stimulus by federal spending is inflationary. Is that right? It has a So. we've been in this situation where inflation was so stable for 25 years you remember and and almost nothing that we did mattered for inflation.

and it's called the so-called flat Phillips curve where there just wasn't a connection between how tight the economy is in inflation that that does not appear to be the case right now. I Think many would people would say that the Phillips curve is now not so flat and that there isn't. There is an interaction between. Actually, let's say yes, yes, I Think that's a yes, Yeah, it's A It's an economics.

Unless less spending by government. Is it? It means less stimulus, which tends to be disinflationary. Yes, Yes. Okay, let me ask you about Basil, the basal three in the game.

You know what I'm talking about I do Um, there's been some reporting and of course not everybody has to fight. Not every country has to follow the basal recommendations we ever. the European Union is not following. Um, they're going their own way and we're kind of going Our Own Way in America using the base directives as a as a a guidepost.

but it's been reported that Fed's gonna uh, raise Capital requirements by as much as 20 percent or excuse me, he's going to raise Capital requirements to 20 percent. Is that is that right? No, that's it's it would. The idea would be to raise them by to buy 20. In other words, if 20 of whatever whatever current capital requirements are, you would raise it by 20 of the total existing amount.

Okay, so so if JB Morgan's Capital right requirement right now, so I must say 13, it would go to 15 right? Something like that if we were to. If that were to be what happens. And and uh, of course Joseph this will be for banks 100 billion dollars or more. No, no, there isn't a final proposal.

So uh, and I know it's still in motion. I know things are still changing. Yeah, but you you folks are talking, you're going to have a lot of input. No, that's right, that's right.

So um so. but but I will say um, sorry, what was it Your question was are you going to raise Capital requirements for 20 percent to Banks 100 billion dollars or more? Are you going to affect Community Banks as well? No, the the the capital requirements will be very very skewed to the eight largest banks. the Gcps. There may be some Capital increases for the other Banks and there won't I don't I'm not I think none of this should affect Banks under 100 billion.

The really big Banks Are they the ones that are at risk right now? They weren't. They were. They were a source of strength in a place of strength. they're doing pretty well.

Yeah, we've gone from too big to fail to damn. We're damn happy. They're They're big. I Mean you haven't we? Well I I would say that as I mentioned, you know we spend a lot of time and a lot of effort raising the capital standards.

Uh, 10 years ago and more recently and I supported all of that and was happy to do so. and I think I think uh Senator Kennedy's times expired Senator Smith in Minnesota I Yield back Mr Chairman Kennedy as you always do on schedule and time. Thank you Mr Chair and ranking member and uh chair pal. Welcome back to the committee.

Um so I have a slightly different perspective than Senator Kennedy does on this question of inflation and debt, you know? I I Don't think that discretionary spending is the problem when it comes to our federal budget. If you look at it, military and non-defense discretionary spending has hovered at about three percent of GDP for the last 30 years. Um, and in fact, discretionary spending has just decreased over the last 30 years. So clearly that is not the problem with what's going on with our with our debt.

It's not what's driving debt growth, the big changes in revenues. So the national debt has increased to nearly 10 100 percent of GDP. So just like we talked about when the support was forming here for um, Uski EQ right? and that resistance was forming here for TQ EQ Now we're approaching a potential support Zone Potential, right? Um, on NASDAQ And that's what I'm going to be paying attention to to see for a re-entry on Tqq. So if we actually begin to indicate signs of a reversal, that's exactly what I was trying to look at right now how much percentage potential it offers.

It's about 1.7 percent on a in a perfect trade. I'm not a perfect Trader. So I you know either the 1.7 percent maybe I'll capture one percent of that and on the five minute time frame I think it's a little bit more clear to see the slight resistance that we currently have. Now if Sqq does break Above This EMA on the five minute time frame, then that is for the Bears and then I can entertain the idea of going short and entering.

Ask you to go with the flow of the overall market. So I'll keep you guys up today. But just like yesterday, 7 45 was our ideal cut off. This speech will continue to go on if I'm not mistaken for a total of three to four out three to four hours.

So if you want to watch the entire stream, uh, that is up to you I'm gonna close out mine. Uh, I don't see it to be super influential. Uh, they ask a lot of uh, political questions that are for their people. uh, and rightfully so.

I mean that's what they want to do Jerome Powell is also very clever. Uh, he doesn't answer questions that he knows that he has no ground to answer on. Uh, he knows that what he says can't influence overall markets and people's opinions and he just tries to not do that right. So I hope that you guys enjoyed this little live stream again! I'll see you guys tomorrow at Market Open for our live trading session and if you want to be able to watch me trade live as soon as tomorrow, that is going to be that second link in the description down below.

You don't have to join, but it's a one-time payment lifetime access. You get to watch me trade live every every day. Very similar to this, but instead of just me taking trades I actually explain why I'm buying or why I'm selling or why I'm cutting losses or why I'm adding more to my position size rather than just actually taking the trade. So it's to understand the thought process behind the trade which is where a lot of beginners have a you know challenge with so appreciate your time.

Hope that word a thumbs up Again, if you have any questions about joining, feel free to shoot me a direct message. Everything is linked down below, but again, it's the second link in the description. If you want to take two minutes to literally learn more about it like always, let's make sure that we're in the year on a green note. Thank you.