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e good morning and welcome to today's live show we see that we are opening up a little bit down to start out the market today but um didn't have time to put out a video so if you need those daily expected moves hey we put them out on patreon but you can see 60848 to the upside 60122 to the downside a smaller range right a smaller range today now not the smallest but definitely smaller than what we've been getting we've been getting pretty big ranges so what does this tell me Well when you're in a time where volatility is higher but you see a range come in actually smaller you want to treat those days a little bit like hey we could see something crazy so you could see some crazy price action we could see a break to the downside we could see this break break down bounce up and then just completely collapse so um this is just a day where you want to be just really making sure you're following the direction of which way this 30 minute chart is going now before the stream started I was like watching something I just wanted to click into it cuz someone was saying brace yourself I'm like oh my gosh that video caught my attention so I pulled up FX Evolution real quick and he was like as long as financials are okay then we really say hey the economy everything's going to be okay and I just was like okay let me go look at financials and I think we pointed this out yesterday financials have that Divergence we also were looking at JP Morgan showing how that thing was vomiting we see the daily Divergence we see that could possibly confirm we see it on the macd we see it on the RSI at the same time so he's overall saying if there's any kind of weakness in financials maybe we should be alerted well right now you have the great signals even the 2-hour signal here with triple Divergence on your macd and your RSI at the same time you have a lot of weakness going on here now you can see those little moves up but this is a time where hey there is weakness above you is it going to be able to curl up again remain okay or are we going to confirm this daily signal and say hey financials are not okay right now so that's just something I'm paying attention to also looking for if the vix can cross up on the daily time frame I think that would be a big deal going forward so I'm going to keep my eye on this throughout the day well what do you guys think I mean someone coming out I mean he has way bigger subscribers than I do right way more but I just wanted to click on it I wanted to see what he was saying about some stuff and I go okay so the weakness he would see is possibly when it's going to uh affect to finan he's like financials might be like if there's no problem in financials then there's no problem and then you see financials have those big divergences man interesting pal pal testimony will be interesting cuz I think one side will be like you're the best and the other side will be like you're the worst um but the side that you would think would say you're the best would actually be more so wanting him to talk badly about Trump I think right now so I actually think you're in a recipe for where he will have to potentially answer questions about tariffs and if he just gets asked are tariffs inflationary and he says yes that alone could probably shake some people up and that's probably the best thing to do right OG I mean whenever there's an event like this sitting on the sidelines is always like the safest thing to do right so I get that 100% Q if you needed the daily expected moves flashing those up for a second here 53373 to the upside you have 52477 to the downside once again a smaller range not the smallest Range but a smaller range and we're up at that downside pretty early on in the day so we'll see what happens with this thing going forward pretty interesting one thing to pay attention to is if you go to daily time frames I would always just on daily time frames be clicking over at the end of the day seeing if this confirms up and at the end of the day seeing if this confirms up these are two things that can affect markets especially going into that Jerome pal testimony so if we see the 10year yield catch an uptrend an uptrend move here that could be a big problem and the dollar might start to turn around as well both of these turning around at pretty much the same time I think these are two things that I'd just click on at the end of every single day towards the last hour hey let me just make sure that the risk isn't there good morning good morning good morning going up with inflation is wonky yeah I think so but I think people are more so I don't know if it's like money is positioning like like a crash technically with the dollar would be like okay money might be positioning for bigger bigger drops in the market let's say it that way correction or crash but at the same time we have the 10year yield way up while the Dollar's up while we still have potential inflation yeah we'll see that's the thing it's like during it it I'm sure like you can put make sense of it most of it but usually it's like okay after it happens you look back on it and then it all makes way more sense but our job is to find the little hints right we're not going to ever have the full story the only time you have the full story is when you look back so we're trying to find those little hints so that we can be part of the next forward move whichever direction that is and then we'll know why later right we will we will fill in the puzzle pieces later but we're just trying to find those corner pieces to create the picture of hey is that a bull or a bear and then we place those beds I would just keep an eye on the dollar and the tenear yield and look at those on daily time frames in the last hour of every day just making sure you're staying aware of the fact that those have tried to base out in some way and the daily time frame does curl up especially around this testimony it can be a problem so I would just be you know clicking over to the 10e yield and the dollar um you know once a day or twice a day maybe just making sure that that's not confirmed cuz once that confirms you need to do more research and see if that's risky for your positions what products are Apple announcing first that's first uh second Apple's going to be a rough one cuz it just is because this could easily be failing already this could be some kind of double bottom at this point you have divergences technically here if you can take this back it might be good but it just looks like a lot of complicated stuff I mean if the 2hour would curl up now I think you would pretty much be like okay this has really built up in this area as long as we don't react to something here and fail I'm pretty happy with it but I just I just don't think that Apple's like this is how I like to say it I'm not itching to trade apple right I'm not itching to trade Apple if anything I'm actually looking at more even at the Spy or something like that for a quick trade or something then uh but I'm not really looking at Apple because it's a little bit complex in there long expect to move I was thinking since it's below the monthly it should have a counterbalance to at least oneish come back yeah we'll talk about those monthly soon but for um sorry which one was it it was Google for Google if the weekly is down by that monthly a very very good area to pay attention to for a week so the thing about Google is you're in a very key area right now so don't forget about key areas right even if the monthly is like down or down in here you still want to be paying attention to this as well like you can see how we blatantly use that very very nicely and now you're not able to close below it so maybe a counter Trend move here would make sense some kind of 2hour Bounce some kind of 2hour failure then you end up down in those levels then you see that reversal signal I think that would be a great look for Google but we'll see yeah we can cover them ready just let me know some Futures you you'd like we just have to go over things a little bit differently with those type of charts like what you looking at someone said NASDAQ it's like if we're looking at NASDAQ it's kind of the same things right we're still looking at the similar things you're noticing even on the 2hour what do you have here for the for the ndx that is well you're kind of seeing some funky stuff right we're kind of seeing that 2H hour give us some forms of Divergence in here I think that would just be overall coiling up right that I don't really want to treat it like Divergence until I see that confirm down lose the low but for the most part this is just showing you there are still some risks here right there are still risks here and that is that this is going to curl down and then we end up testing lower levels again that's the risk that I think is there but yeah 2hour chart would be very good for looking at this guy and the yeah we'll go over let's go over the es cuz the es is pretty good um so the es here you can see already on the 2hour it's mainly pointing to the downside so immediately I'm going okay this was a pretty extensive move and this was a pretty good breakdown of that move right pretty good breakdown so if that reached down to lower levels even took out this level for a moment maybe I need to pay attention to that treat this like some kind of Bounce and at least be some kind of a c type of move first maybe that's what I want to be paying attention to as this is turning down now if that's not going to be the case 2H hour turns up and everything's Dandy right but the 4 Hour needs to turn up for this thing to be ultimately bullish in my opinion but you can see I mean once you really look at the es you really see how this is overall flagging out and So eventually if this is able to even carve something like this out we could end up in that upward Direction cuz do you see the left almost over here we react to these type of levels this type of level you get that retest then you bounce off I think that would be fantastic but you got to go through some turbulence and you got to make it through that turbulence right that has to be proven yeah I just like to blow up the time frames for the es and anything that's Futures related I like to blow up the time frames um because I'm not trying to you know take a trade for you know 30% for a day trade or something like that no I like to do a position so that I put myself in a good spot and then I see little moves turn into a big move and then I get a take profit right that's kind of my game and then I just leave the runner so I'm just different and I like bigger time frames for the es I for pretty much anything Futures paler green again paler is a wild one man paler is just a Nutty one uh at this moment you would be sitting there going okay this is a bunch ofers right you're still doing that but you're just like man we just we refuse to lose the five and that's just been the game for paler if you lose the five you can be a little bit more worried right but if you're keeping the five you're good to go like if you're remaining above the five pound tier has really been the king of doing that I mean look at the last run you saw all these touches below the Five Below the Five Below the five but it never gave it up until it was like months and months later a very difficult short and I think it's a lot like meta I think me meta is a difficult short too similar thing right you see all the curl Downs all the Divergence really close to and all this has to do is curl up and it's going to potentially a weekly upside move pretty crazy good morning how you doing how you doing waiting for pullback yeah I think waiting for pullback makes the most sense all right let's go back over to the Spy as we opened up let's go look at this on a 30 minute we see that dipping down we got to see what's going on the um chatting by senior Jerome pal will take place in about 30 minutes so that will start up in about 30 minutes so we got a lot of time to figure out hey what's going to go on in the morning here wa we going to fill this Gap first and then see what happens go into this event with an even playing field for the Palm we'll have to see for now volatility trying to curl up we'll see if that bad boy curls back down and then real quick let me just check the Futures in case the price action helps us out at all not really but looking pretty controlled might want to make that move up to 610 maybe we'll see these aren't the right levels either I'm just taking a peak yeah see it's pretty controlled down still a little bit more worried for this guy though us 100 all righty so we're trying to confirm this that would technically not be Divergence at this point I do let's look at some other stuff real quick yikes that's what I think about B oh goodness that is not healthy looking at all you're kind of stuck here right you're stuck and you're seeing some rapid moves you you kind of don't man you wouldn't have liked this you really wanted to see maybe this go a little bit shorter and really show you like hey yeah we're piling up again and then just see that confirm back up I think that would have been great cuz you would have just been like okay this is my look breakout okay we're going to the upside that didn't happen so now you got some risk here you tried to Gap out and then you kind of are just seriously failing some kind of retest at this moment that seems like a really deep retest o that's a rough one 2our Crossing down too 2hour crosses down I think that's that's GG's I think I think your daily is going to confirm down if that two hour is able to cross so I think the 30 minute has some work here 30 minute has some work here if that can keep it bullish I think it's good 2 hour starts to cross down I think there's way too much risk of down side I don't think it looks like horrible I'm just saying man that two-hour crosses that that just like one bad day's worth of selling and and you got it crossed and that's kind of bad it thinks Trump will come in line or or will pow come in line with Trump's desires for lower rates or give us news um I highly doubt that I I do not think that that's going to be the case I just I have a hard time seeing it B 66 put on Friday so you're just building that position hopefully it's further out right if you're doing it if you're if you're messing around with meta it better be further out you got to take further out cuz you this could take another two weeks to even fall down one you got to be further out oh God most obvious thing would just be okay Gap up Island reverse down take those back in the next few sessions all right I'm excited to see how people get position today think that'd be interesting hyg fully crossing over now not a good thing xlu starting to curl back down I I'm going to keep my eye on financials just to make sure that we're watching everything and that's starting to break down daily is crossing for financials so this is something that we were mentioning this morning is JP Morgan still not having a good time it's about to not have a good time no Divergence up there but this can still be a pretty mean drop we could see a retest of 250 so about 20% there maybe about or sorry about 10% there 9% so that's going to be a problem really giving it up great morning Can't Get Right hope you're doing good volatility is still turning up man this one's trading a bunch holy how much volume what I mean that's a 200% move all of a sudden too oh my gosh that is billions randomly coming in no earnings any news any news at all like I'm trying to give it the benefit of the doubt but that looks like that looks like that looks like covering yeah you cover you got the covering they're covering yeah they're that that's what that big spike means yeah see the big spike they might be cover someone might be covering a position on um whatever singen whatever it is I think someone might be covering crazy at least that was yesterday you know each day take it day by day but that's that's why you saw so much volume come in yeah you had someone cover a position there that's what it seems like to me now you got to see if that continues though will you show the testimony I don't know if we'll watch the testimony together um what I what I would like to do is I like to watch those things um but I have to take it into like I I have to actually take in the info I have to like kind of go with an analysis kind of look towards it um so it's very hard to like stream at the same time I like to like hear what's going on react accordingly I would still more so say where if you want to be bullish you're looking for good news towards the end of the week now I wouldn't say good news at the beginning of the week that's how I would look into it right now as far as like just reading into how stocks would like to behave to go higher how stocks would like to behave to go higher I don't think you want to do this all of a sudden right I think you would more so like to set some kind of trap then do this that looks way better to me but I'm I'm just like reading into it like that and then I can look into how it actually reacts with the news and stuff but I like to look at it myself uh looks like short covering one badge Tesla bouncing at the monthly moves mus so useful exactly they're they're awesome they really are when something is dropping off a cliff now it could violate that right we saw that from Apple it gets violated but Apple actually Apple actually ended the month I believe back in that move where was that that was um I'm on a 30 minute shoot where the heck was that it was in here it was right in here remember this I'm pretty sure the monthly move was like there January January we ended back in the monthly expected move that's pretty wild that was a that was more a crazy one like Tesla yeah that would be kind of crazy as well but Apple was literally outside of it and then in the last 3 days of the month came back in it I thought that was very cool just very useful and then if you start to see reversal signals which I I think you got one I just think it's not a very good one but you can get reactions from these levels and it also means hey if we keep breaking through those levels it can get ugly so got to be a little cautious with it can paler hit 120 today I don't know I'm not buying into that no but I bet 120 is probably sitting with all the put the put wall or something like that you need more cow bell I've been uh bringing out my um what's that that little practice pad for Drummond I'm bringing out my practice pad for my daughter she's been liking drumming like that'd be sick my baby girl shreds all right now we get to see some more info in a bit yeah why am I not C looking over here meta is finally starting to actually hit that 5day moving average very nice short or sorry not short fres um the Richard you might be happy about this a little bit but you need to break through that you got to break through that as far as shop goes did this have earnings this had earnings so that's going to do whatever it wants to do with the earnings I would say the earnings is actually within the price action so I would actually maybe read a little bit into technicals but I just bet the I bet the options on this are just not easy to make money right now earnings time always a rough time but that is kind of suggesting that you're going to see some kind of drop here yeah you you have a lot of weakness in these areas a lot from the daily to the 2hour to the 30 minute you got weakness across the board for this is almost golden setup actually that's a rough one not good looking but the spy's okay guys because like three stocks hold this guy up R are bad for Sho yeah it seems that way seems like seems like they were like yeah they're going to be good nope they're bad so is what it is I think the more important thing is for broad Market terms I think I think in 19 minutes whatever drum pal gets asked really it's what what does he get asked whatever that is I think will be way more important than any earnings happening right now unless it was like Nvidia earnings or something go meta go go go when the last time meta touched its 5day moving average what was it January 31st so like 11 days ago and that was just a very quick tag you've had one tag another very quick tag on January 27th so the last time you really like tested the 5 day was January 21st first damn that's been a great run wow what a move AMC looking positive hey big move up big wick down oh how unfortunate and then I remember ffi had a pretty good day have a not so good day now let's go look over at uh oil real quick remember oil looked like it was putting in that floor o it's still putting in that floor man you see that see that see those Divergence that's great woo oh wow this looks like uh oil might be running for a while well you have to realize that also retail retails a lot of that morning activity so you're like oh they have a gap down they blow it back up that's most likely not them uh I mean if you look at if you look at the spy and you think of liquidity and things like that and you look at this and this is slowly grinding up if they wanted to take out a an area if they wanted to make sure this built back you'd probably see a big buy order come in right we're not seeing that so we're seeing this trickle up so this tells me hey we're in retail hour we see a dip maybe retail's buying that dip that's what it seems like to me probably Glimpse ofia yeah Nvidia might be good to look at right now Nvidia hitting a pretty major level for us at 135 remember that 135 pretty important we still would like we would invite retest of 12774 for sure I mean look at these tags in here the Gap below it very very nice like this area right in here would be super good to go down just reach down see if you can retest those areas I think that'd be great um what we got here okay smci though I mean that's going to be worthless to look at because it's got earnings right I mean I would say people are pretty bullish on the earnings wouldn't you if they fail this that that would be bad for a lot of people I think that would be not good if this ends up uh below $26 after earnings somehow that would be really freaking bad and that would you know that type of news would would actually probably collapse Nvidia a little bit more but that's 50/50 man they don't even have to say anything crazy um we can maybe like listen to jome Pal though maybe we kind of just like that one time we more listened I think it was better um why is stock market crash going you guys why is this being said oh okay it's engagement farming all right let's get out of this we'll get out of this we can leave that up Hub we don't need you okay and we'll click on this and that should start up soon all right we can listen in the background Willow is like God dang I don't want to do you play SM smci no no they were caught in fraudulent activity as well but it's okay cuz they did their own uh their own audit on themsel and they found nothing wrong no I don't play with SMC I mean I would I would I'm not saying I wouldn't um but they've proven to do you know fraudulent activity on their earnings or their books in some way and um if they have good signals I would still take it but I'm not going to invest in that long term I think AMD is interesting but it's just more sideways right AMD is just more sideways again like look at all this sideways that led to that now you're going sideways that led to that it looks just like Nvidia looks like this looks just like this so I'm going to say that is definitely possible so I just need to see if that 30 minute curls down if that curls down bad things right if the 2 hour is confirming up hey I'm getting above that okay awesome are we holding the divergences on the r side we are so this has more potential than you think to turn around right here um but you have to realize that could need another dip down right this could need to solidify itself again with a higher low or even a Divergence if this leaks out for some time but yeah you actually have more than you think I know the macd is not showing it well at all but you have some down here but amd's been rough man so I don't really like trading AMD the past like year we've talked about why a lot it causes a lot of management of risk all the time yeah and I think that's not a bad thing to wait for I mean I wouldn't think that this like Gap has to be filled right now all the way you're talking about all the way down towards 580 it would be a great month to do it now why would I say it would be a great month to do it well because our yellow line is there right so if you wanted to remain bullish this is actually what you want to see right you want to see this down by this area maybe you even shoot down to there at some point but it's early on enough in the month right it's not in the last like 3 days of the month and then you can see some kind of Bounce maybe it's a retest that fails but it would be a great um take profit if things go to the short side as of right now we have to pay attention to if it's going to actually curl up I think though I still think we have more probable reasons for this to end in the upward Direction by the end of the week we'll see Advanced money D 170s yeah it's a rough one wouldn't that make Head and Shoulder if it drops to 580 I mean technically you would potentially say that that could be a head and shoulders right at this point you could use this whole block as a left shoulder if you wanted to say this whole thing okay um I would more so want to use this block more likely right use this say okay maybe this will be my base level and then we just go down to here we see that reaction for the retest and then we start to break down and then there's your correction of 2025 or the beginning of something worse but if If it creates reversal signals then I'll say correction if it doesn't then we'll probably say crash but that's how you get your um from the top that's potentially how you get your 10% actually and you probably come down into here it'd be 200 if it's going to be something like this if it's not 200 then you're probably dropping all the way down to test something like here or the breakout breakout would be great this would be great 563 so maybe here is better yeah we'll see I'll take a look at that for Saturday's video for sure I think it'll boost it up or down my first inclination is is down I mean if they ask the right questions if they if they ask the the questions they should ask um if if they bring if he has to answer questions about tariffs and he answers truthfully about tariffs then technically what everyone's scared of he would be talking about and so I would see that as a negative and if it's not negative right away like if it's a Fluff piece whoever is fluff piecing him the first day if they fluff piece him I think the second day he'll get murdered so we're going to turn it on we'll have it in the background we just won't have visuals and it happens in about 9 minutes as far as AMC goes I think it's okay I don't think this is bad by any means you can't say that's bad we're just looking for the daily to cross up and look the DA's crossed up we're looking for that good confirmation and look we got the good confirmation now we're getting a follow through awesome keep the positivity that's it you never want this 2hour to turn down you never even want the 30 minute to turn down and you can see something crazy gme we're seeing that thing pop off again that's great he doesn't he say good morning and it goes up or down I I would think based on this based on this guy right here a lot of people shorting though right away in the morning so just keep that in mind uh but the the CPC being this low very interesting to me and the PCC coming out rather hot there really really WS the put side from what we see but I just I see all this piled up down in here once we actually get that big reaction through that puts people to the put side usually you see a pretty good cell come in so um that is something I'll be paying attention to um but not reading in too fully right I don't just use that to make a position somewhere I need to see something proven yeah and and it's always kind of like looking back it makes sense so as long as you're following price action you realize where reactions can happen it's like okay as long as I can understand where reactions happen I can pay attention to as many levels as I want right it's just what am I actually looking for wherever that happens right am I looking for a base am I looking for this am I looking for this to cross up am I looking for a retest of this those those are more the things to go off of what am I actually seeing in the price action in front of me right now and if it happens to be at a good level of support based on you know previous Behavior then you would add some uh validity or credibility to that yeah it's like this level is great it's a line on our chart but we can pay attention to the Gap fill that is there and say okay if we see reversal signals here then we need to be paying attention right because this would be the support is there while I have one of my lines that's great so the calculated level is right where something important is but I think you're kind of worried right now that you're going to see this just drop down I think you're you're more worried that this might get taken out at this moment Devil's L us to be able to deal with J pal yo I hear you on that sometimes man sometimes that JP makes me just want to go to sleep I'll tell you what but we're going to turn that on in about 6 minutes and we will listen to at least an hour of that together all right AMD hit 111 should I be shocked it does chart indicates going higher I mean the thing is if it indicates it's going higher to you if you're like wanting to put money then you should have some triggers and then you're just looking if something goes wrong INTC broke above the weekly uhoh Intel this one had the good signals didn't it yeah it had the good daily signals now you're getting that confirmation that's fantastic this this is great I don't think this has to stop I mean this is where it potentially could the first time right you blew past this so that's gone you come up to here you might get that quick retest But ultimately I think you're I think you're heading up into these levels I think you're heading up to $22 might take some time right but over time you might end up at $22 very nice very very nice struggling Amazon definitely looks like it wants that double dip AMD though so interesting he trying to take it back meta trying to take it back oh man things are vulnerable for sure AMC is still going let's go go AMC go do your thing buddy do your thing little guy he's like AMC is our Pikachu 100% yeah I think I think right now you're kind of like we talked about this in the the Sunday video a little bit like you kind of have to you want to try to relate stocks together but at the same time you have such different looks out there that it might be an individual name basis that's why also if you heard me just a bit ago I was like that's why I really like the spy and the q's right now right because I I just know the spy in the cues will give me a signal and go in a Direction they won't maybe react to a certain earnings or a certain this or a certain that um versus trying to do something with like Meta Even though I'm trying to it's like okay well I got to take longer outdated options I think that spy and the cues are the easier plays to execute if you can find a trade there right now yeah probably Willow we all know that Mega Charizard yeah AMC the target for AMC really I just think I just think AMC needs to get to what I think it's actually worth at this point I think AMC is easily worth $14 a share I think that could be as high as $30 a share that's what I think about it if it gets in that area I think that's a pretty good value for the stock I think that's like where it should be in my opinion I think that would be a great first stop and then if that triggers something that triggers something but I'm happy with that I think that looks fantastic um I mean it's not necessarily a setup in mind like right now it's more like what's the setup what's the actual opportunity right now you know you'll have to wait for setups a lot right waiting for setups is a good thing and and if you were around during these times you saw we were waiting for the potential setups we might even have to manage risk for a sec and then we got into it right so it can take time I think this one still has the opportunity to consolidate further down and then we'll see what happens so do am I like excited to take a spy trade right now not necessarily I think it could dubs I think you're right so once we once we actually see and this is the hard part about this week as well um asking for like what's the best trade setup in mind the hard part about this week is you have an extreme amount of volatility so I want to see which way the data fakes people out and then see if I get a reversal signal and that will be when I take a trade on the Spy cuz like it's always it's it's like a lot of the time it's going to be opposite and if it's going to be an opposite move then you'll see a Divergence and that thing crosses back up right they're always going to try to fake a lot of people out so that's why I'm like hey let's wait for him to talk and then in you know a couple of hours we could see some direction and then by tomorrow afternoon we could see a Divergence and then we could start heading up or down by Thursday Friday so that's how I'll look into it right now I hope AMC does the thing too I think that would be awesome I'd be happy about it I'm not going to sit there and be like Now's the Time every freaking time it makes a move but you know we were watching the reversal signals it had them the 2hour signal was there back in February 3rd and now it's up what almost 10% from those levels very nice all right let me go click on Mr Jerome pal real quick make sure we're not missing out on anything seems like we're not yet nothing out yet February 11th I'm not crazy there it is we'll look at this while we wait lemonade I like lemonade like the drink um 30 minute diverence across the top on the RSI so you have to be aware of the risk that's a big move what are you looking for well it's very far away from the five so if it's very far away from the five and I see a bunch of support levels I'm looking for the retest of the five see if it can curl up on the 30 minute but with the Divergence two hours can start to pull back right so 2hour pullback looks like the most likely thing for this um test out here of $35 are fantastic that's what I would say if you can remain in this area for a while I think that would be best case if not you're probably going to drop lower maybe to 3350 or something like that keep an eye on it okay I'm starting to hear noise hold on oh God it's oh no we have to listen to Elizabeth Warren my ears my ears they're going to bleed fires one of my short dated meta puts yeah I did I was like Richard's probably happy about this meta actually went down to the five it's still trying to bounce though that's a big problem it keeps using the five over and over again so it's like damn this thing still coiled up could make another move higher R the thing that was good was AMC I think AMC is looking pretty damn de okay hold on important issues facing our country without question the Federal Reserve serves a critical role in the function of our government and the global economy you have the ability to influence markets and directly impact the financial future of hundreds I think Gold's moving I think I think 3,000 in the future makes sense why the Federal Reserve institions but recent I don't think you can continue this for much longer overal pressure retrace take for example the feds invol Network for Greening the financial system a group dedicated to Green financing and climate change which the FED joined in December 2020 as President Biden was about to assume assume office just last month the FED announced that it had pulled out of the organization as president Trump was getting ready to sworn in to the American people this is flip-flopping in the political win too much focus on climate change instead of supervision is consequential and in March just two years ago we saw the failure of Silicon Valley Bank svb marked the third largest bank failure in US history and the largest since the 2008 financial crisis and yet not a single federal regulator was held to account in fact the FDIC filed lawsuit against Bank Executives which which accused the svb of egregious mismanagement and I agree how is it that no Bank supervisor has faced any consequences with 30 masas and MRI that never had timely action at svb how can the people who are supposed to be our cops on the beach have not faced any recourse for such egregious failures I simply don't understand we must all address the fact that over the last four years the Biden Administration and Biden nomics have devastated decimated and destroyed hardworking families abil support themselves during Joe Biden's time in office overall Prices rose by over 20% Energy prices 34% Transportation costs 31% all right they're already bringing up inflation costs and everything so that's not all this most likely will not be good two3 reassuring have less than a, less than a, in their savings accounts but there is good news things are going to get better during his first term president Trump kept his promises to the American people in the first three years of his presidency president president Trump built the most inclusive economy ever 7 million jobs created and 2third went to women African-Americans and Hispanics it's time to once again make America's economy work for the folks working paycheck to paycheck Joe Biden broke our economy a little Donald trp will fix it for too long Bank Regulators have followed a blackbox regulatory framework with little to no recourse the FDIC under President Trump's leadership recently released neverbe seen supervisory documents which confirmed that Biden's operation choke.
20 was real despite assurances that these unacceptable practices would end following the democrat's first operation joke. 1.0 we are seeing an unfair playing field that results in disastrous quences for legal business on one hand if you were in the private sector and you do your job poorly you would face consequences reprimands suspensions or even being fired but if you are within the walls of the federal government such as a bank regulator you will face no consequences for your actions even if you pressure a bank to cut off services digital asset firms political figures and conservative aligned businesses and individuals to me that goes against the principles of fairness and Market access over the last two years as a ranking member of this committee I have consistently argued that Basel 3 ingame proposal will raise costs and limit Credit access for hardworking Americans and while I'm glad this proposal was not finalized the uncertainty surrounding bowel 3 for Banks to put capital on the sidelines limiting access to that capital for local small bu across our country now as chairman I plan to work to rectify the issues of the Biden Administration chairman bow I look forward to hearing from you on the federal reserve's future and the plans that you have for right sizing the financial regulatory framework specifically around bosel 3 to create jobs here in America we need to make sure there's capital and liquidity in the market and we also want all Americans even those growing up in poverty like I did to know that they can access the capital necessary to start new businesses grow existing businesses buy a home and pursue their American Dream chairman I look forward to your comments you have to get free money whenever you're born you have a to an independent agency I def no credit check Lial positioning crypto we bundle it with the housing market CU Housing never goes down and you won't get trouble at all calling balls and Strikes as a fair referee and I hope that we are getting ready to clean that slate start aresh and focus on a healthy economy franking member Warren thank you Mr chairman chair pal it is no secret that you and I disagree on the need for strong Bank regulation on monetary policy and on the fed's stock trading scandals we have sharp differences but I believe are principled public servant cares about this country we are at an unprecedented moment our financial systems are facing huge risks from the economic chaos of President Trump and his co-president Elon Musk from on again off again ter off again layoffs for tens of thousands of government workers to on again off again cuts in purchases to on again ofan support for medical research now co-president musk and his om director no Co Frozen all at the Consumer Financial Protection Bureau there are now zero cops overseeing the $18 trillion doll consumer lending Market zero cops investigations into illegal forcl sessions canell exams of giant credit card issuers to weed out unlawful junk fees cancelled probes of illegal debt that's crazy canell rules to save people billions of dollars canell if musk and his o director killing the cfpb it's like putting a sign on every checking account every credit card every mortgage application and every car loan cops have been fired let the scams begin that is not all musk and his doge crew are also rooting through the treasury's most important didn't Elizabeth Warren like she got like Financial Plumbing that of payments go through coming up and she said like we need to look into an audit the agencies no one there's literal clips of her on the internet saying like we need to audit and look into the agencies and make sure the money's being well no one has checked whether americ financial data has been C or sold for the personal profit of Mr musk instead we've had a series of misleading and conflicting statements sounds like someone knew that there was a problem got recruited by the problem and then now doesn't want the problem to be out there that's what it seems like to me is just my common sense under the bus secretary bessent claims that Doge can't meddle with the treasury's payment systems because ultimately the FED is in control now I'm not sure whether secretary bessent doesn't understand how the system works or if he's just trying to shift the blame to you but I know he is wrong the FED simply executes the transactions that treasury instructs if Elon and his hackers for example initiate instructions to choke off payments to their enemies or if they issue instructions to shut down payment for teachers aids for kids with special needs the FED may have no way of knowing that the instructions were manipulated and the FED may have no legal method to override them chair the next 18 months May Define your legacy and the country's trust in the FED as an institution I expect that you will work with Democrats and Republicans and Congress if she wants no policing any and the government is God that's I also expect that you will not join the conspiracy we never make mistakes how dare you look at the numbers unlike the treasury payment instructions you can see if the cfpb's funding requests have been manipulated I understand that some extremists have a different view about what the law ought to to be but under the law right now impoundment is clearly illegal do not make the Federal Reserve and accomplice to this illegal act and forever Sol the reputation of the FED keep the cfpb funded exactly as the law requires we are in the middle of a crisis as Elon Musk tries to take over our government but let's also talk for just a minute about your day-to-day job meeting the fed's Dual Mandate of promoting maximum employment and stable prices it's now clear that the FED acted too late and let inflation get too high and then responded by keeping rates too high for too long these policies made the big drivers of inflation like housing costs even worse and they put Americans jobs at risk making it more difficult for them to home and for small to be able to finance their operations iin the finger at the to bring down they don't look at government spending beginning with a meaningful I hope J pal points the finger back at her you have proven you can move quickly when it is full just pointing a finger after president Trump was elected within the space of just a few weeks you scrubbed seemingly all mention of diversity and inclusion from the fed's website you withdrew from an international Central Bank group that shares information on climate related risks to the financial system you instituted a hiring freeze that will limit the number of cops on the Wall Street beat and you announce she's not even with them I thought this side would be with him a little B stress tests I can see the immediate political appeal of your strategy But ultimately it will fail you will lose good people climate catastrophes will continue to mount and the increasing vulnerability of big banks will threaten our entire economy sure Donald Trump maybe have she just advocate for didn't we put more money towards climate change into politics why did North Carolina have any fing over the long run will burn the reputation and only increased that over the last four years and put our entire economy now she's like we need more to waste don't fall into these traps thank you Mr Mr chairman yes ma'am today we'll hear from chair of the Federal Reserve Jerome pow oh he could annual monetary policy report to Congress chair pal thank you for your testimony today and you are now recognized thank you pal appreciate you being here chairman Scott ranking member Warren and other members of the committee I the opportunity to present the federal reserve's semiannual monetary policy report that's as high as I can go guys the Federal Reserve remains squarely focused on achieving our dual mandate goals of Maximum employment and stable prices for the benefit of the American stick to the script big dog the economy is strong overall and has made significant progress toward our goals over the past two years labor market conditions have cooled from their formerly overheated State and remained solid inflation has moved much closer to our 2% longer run goal though it remains somewhat elevated we are attentive to the risks on both sides of our mandate I will review the current economic situation before turning to monetary policy recent indicators suggest that economic activity has continued to expand at a solid Pace GDP Rose 2 and a half% in 2024 boasted by Bo bolstered by resilient consumer spending investment in equipment and intangibles appears to have declined in the fourth quarter but was solid for the year overall I'm just muting for a second guys I'm still the middle of last year activity in the housing sector seems to have stabilized in the labor market conditions remain solid and appear to have stabilized payroll job gains averaged 189,000 per month over the past four months following earlier increases the unemployment rate has been steady now since the middle of last year and at 4% in January remains low nominal wage growth has eased over the past year and the jobs to workers Gap has narrowed overall a wide set of indicators suggests that conditions in the labor market are are broadly inbalance the labor market is not a source of significant inflationary pressures the strong labor market conditions in recent years have helped narrow long-standing disparities in employment and earnings across demographic groups inflation has eased significantly over the past two years but remains somewhat elevated relative to our 2% longer term goal pce inflation prices pce Prices rose 2.6% over the 12 months ending in December and excluding the volatile food and energy categories core pce prices Rose 2.8% 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 our monetary policy actions are Guided by our dual mandate to promote maximum employment and stable prices for the American people since last September by a full percentage point from its peak after having maintained the target range for the federal funds rate at 5 and a quarter to 5 a half% for 14 months that recalibration of our policy stance was appropriate in light of the progress on inflation and the cooling in the labor market meanwhile we've continued to reduce our security Securities holdings my wife got me with our policy stance now significantly less restricted than it restricted than it had been and the economy remaining strong we do not need to be in a hurry to adjust our policy stance we know that reducing policy restraint too fast or too much could H hinder progress on inflation at the same time reducing policy restraint too too slowly or too little could unduly weaken economic activity and employment in considering the extent and timing of additional adjustments to the target range for the federal funds rate the fomc will assess incoming data the evolving Outlook and the balance of risks as the economy evolves we will adjust our policy stance in a manner that best promotes our maximum employment and price stability goals if the economy remains strong and inflation does not continue to move sustainably toward 2% we can maintain policy restraint for longer if the labor market were to weaken unexpected or inflation were to fall more quickly than anticipated we can ease policy accordingly we are attentive to the risk on both sides of our dual mandate and policy is well positioned to deal with the risks and uncertainties that we face this year we are conducting the second periodic review of our monetary policy strategy tools and Communications the framework used to pursue our congressionally mandated assigned goals of Maximum employment and stable prices the focus of this review is on the fomc's statement on longer run goals and monetary policy strategy which articulates the committee's approach to monetary policy and on the committee's policy communication tools the committee's 2% longer run inflation goal will be retained and will not be a focus of the review our review will include Outreach and public events involving a wide range of parties including fed listens events around the country and a research conference in May we will take on board uh we will take on board lessons of the past five years and adapt our approach where appropriate to best serve the American people to whom we are accountable we intend to wrap up the review by late summer let me conclude by emphasizing that at the FED we'll do everything we can can to achieve our dual M mandate goals that Congress has set for monetary policy we remain committed to supporting maximum employment bringing inflation sustainably to our 2% goal and keeping longer term inflation expectations well anchored our success in delivering on these goals matters to all Americans we understand that our actions affect communities families and businesses across the country everything we do is in service to our public thank you I look forward to your questions thank you chairman poell certainly your your your words and your actions have a global impact you have the opportunity and responsibility of leading this country in the right direction economically and and I thank you for your commitment to having a conversation with all of us about how you do that well you know I had a conversation yesterday some of it was frustrating some of it was Illuminating but in the end my goal is to make sure that the American people specifically those working paycheck to paycheck have more opportunities to succeed not fewer you have said that the FED is not against Innovation and banks are perfectly able to serve customers as long as they understand and can manage the risks yet you have admitted that the threshold has been a little higher for banks engaging in crypto activities last week I held a hearing on De Banking and once again heard that Federal Banking agenc in particular the FED use reputational risk as a tool to encourage the de banking of certain legal Industries and law-abiding citizens for political reasons not tied to safety and soundness de banking is a top priority for this committee and it certainly is for me and one that I believe is a bipartisan issue will you commit to working with this committee to n de banking including working with the new Vice chair of supervision once appointed to revise the Federal Reserve supervision manuals to remove reputational risk as a tool to weigh in on political topics I'm happy to make that commitment thank you sir accountability is very important I would like to think accountability is a priority for everyone especially the FED given that failures in fed supervision can result in the loss of billions dollars yet following the failure of the Silicon Valley Bank which was in part due to the failures of its regulatory regulate Regulators to identify egregious mismanagement of interest rate and liquidity risks we have yet to see any Regulators be held accountable and as you recall that was a point of my frustration as a guy who spent a lot of time in the private sector 15 years running few businesses I can tell you that accountability is a necessary part of making the entire organization healthier and performance job as as as well as possible I'm encouraged the f has be the process of holding svb Executives accountable that's good news but no fed employee has been fired put on Prop put on performance Improvement plan all of which would be expected in the pr section I just mentioned for employee failure please explain to me why fed employees are held to a different standard from my perspective than everyone else different stand what are you planning to do to take accountability for fed failures supervision J we've actually done quite a lot in um in response to the events associated with Silicon Valley Bank so we've done many many things in terms of specific accountability what we found was this was not a case of malfeasance or nonfeasance so much it was a case of people were were carrying out a specific Playbook that failed to cause us to act in time for these things it wasn't it wasn't actually particularly fair to the employees to say you didn't you you you violated our our practices in some way that wasn't really what happened what happened was I would say a lot of focus on process and on governance and controls and not enough focus on basic Bread andb Butter banking credit risk liquidity risk interest rate risk things like that so as we discussed yesterday we we took very substantial steps to avoid further spread of those issues and that was successful but I I understand your point on accountability is it this is one of the areas where you see the the the the approach of looking at safety and soundness and with the number of mras and mras that went really documented but no action was taken that leads me to the conclusion that individual employees supervisors uh should have been held account for that I I'll move on though God damn pickups in the past you've supported tailoring regulations so that we ensure Banks of different sizes Thrive and and to Pres preserve our diverse banking system will you commit to working with me as chairman to make sure that Financial regulations do not impose more burden than is necessary I'll say that this comes after a number of conversations with Community Banks and and Regional banks that have continued to stress that the cost of the regulatory framework around them isn't just harsh it's oppressive uh larger Banks suggest that the cost per employee for the regulatory framework is $10,000 per employee I think we can do better and we' love to hear your thoughts on that I first of all I will commit to to working with you on that um we do try to uh to avoid excessive burden I look I think it's fair to take a fresh look on frankly on De banking I think we all see both on in your hearing and in the one on the house side we hear a lot of people talking about that and um you know it's time to take a fresh look I think we we don't intentionally do these things but sometimes regulation leads things to happen and we need to be we need to be working on that I appreciate that now turn over to the to the ranking member I'll say this after having a number of conversations with CEOs of banks around the country one of the things that was clear made clear to me with specific statement from the CEOs is that the regulatory OCC and other Regulatory Agencies said specifically to debank certain industries and that is a point that I'm making and one that I think we have to solve if it's legal in America to do business we should do our part to make sure that they're Bank thank you Mr chairman so over the weekend co-president musk and acting director vote uh effectively shut down cfpb no more cop on the beat looking out for a family of four in South Carolina facing an illegal foreclosure no more cop on the beat looking out for your grandma uh whose bank account has just been taken over by a scammer no more cop on the beat looking out for people getting ripped off by giant CR credit card companies that are charging illegal junk fees it also means that the cfpb is no longer doing one of its most important jobs examining big Banks to root out illegal conduct before it happens or at least stop it before more people get hurt chair Powell if the cfpb isn't on the job right now then who is administering JP Morgan or Wells Fargo's consumer compliance exams to ensure that they are following the law Senator I I believe that um and you would know uh that Dodd Frank moved all authority for um examinations in the consumer space to CFB PR early we we still have some jurisdiction we'll talk about that in a sec but the answer to my question please if the cfbb is not there examining these giant Banks to make sure they are following the laws on not cheating consumers who is doing that job I can say no other Federal regulator no one in other words so thanks to co-president musk and cfpb acting director vote Wall Street banks no longer have to show the bank examiners that they're not illegally opening accounts people didn't ask for like happened with Wells Fargo or charging illegal junk fees like the Bank of America did but cfpb has Juris ition only on banks that have more than 10 billion in assets so what's happening in thousands of Community Banks all around the country those that have less than1 billion do in ACC in assets so chair poell as you know the FED oversees consumer compliance for State member banks that have less than 10 billion in assets has the FED suspended consumer compliance exams for those smaller Banks or is the Fed still on the job to make sure that those smaller banks are following Consumer Financial laws still on the job business as usual all right by forcing the cfpb not to do its job president Trump Elon Musk and the author of project 2025 Russ vote are giving Wall Street Banks an unlimited get out of jail free card so they can cheat Working Families even while Community Banks continue to play by the rules you know for any Americans who have money deposited at JP Morgan or Wells Fargo or any other of the giant Banks they should now know that there is no one on the job to make sure that those banks are not scamming you only the smaller Banks now have a cop on the beat to make sure that they aren't cheating consumers you know if I have my money in one of those giant Banks I might think about going to a smaller Bank where the protection at least right now is a whole lot better now at the same time that the cfpb is under attack the FED is buckling to pressure from Wall Street to erase other safeguards for the too big to fail Banks during the first Trump Administration under your leadership the FED weakened the big Bank stress tests including by giving the big Bank some of the answers to the test in advance I called you out on it but you promised right here in this committee that you would not give those Banks the whole answer key I'm going to quote you back you said complete knowledge of the models could lead to a model monoculture in which all firms have similar internal stress testing models which could increase the correlation of risk in the system and Miss key idiosyncratic risks faced by the firms I agreed with you but several weeks ago the FED announced that it has plans to do exactly that hand all of the answers over to the giant Banks chair Powell why is the Fed about to propose a rule that directly contradicts your own testimony and in your own words would render the stress tests toothless senator in Ence because the the ground has shifted very substantially in administrative law and we we the stress test to remain resilient to that and so we're making changes to to accomplish that well the changes are changes you've identified earlier as making those tests Toothless look the big banks are going to juice shareholder payouts and leave this economy more vulnerable to a crash the FED is knuckling under to bank lobbyists we know how this ends people will suffer Wall Street will get bailed out I urge you chair pal to Ser M Street instead of Wall Street don't weaken these rules thank you Senator rounds thank you Mr chairman and and Mr chairman thank you for coming before the committee I appreciate the opportunity to visit with you I've got a series of questions but I would like to give you an opportunity if you would like uh the suggestion that the ranking member has made here is that the big Banks can now scam individuals right now uh any change in the laws regarding how they're supposed to be treating the individual consumers out there or anything along that line Law changes no I'm not aware of any any changes in any rules that they would have to follow not that I'm aware of are they still audited and do they still have the Regulators in their just as they did before about to goest except for the cfbb very if in fact in the hypothetical the CF carrying that out anything else you'd like to add before we move on no thank you Mr chairman uh as we continue to prioritize the stability and the resilience of our financial system the ongoing Bas three rule making process has remained front and center in shaping our regulatory framework I guess I was rather outspoken with my opposition to the original proposal and further work was stalled at the end of the last year TR benefiting my question for you today sir is could you provide an update on the Federal Reserves progress in finalizing the bosle 3 endgame rule making process I'd be glad to so we remain committed to completing bosel 3 endgame we think it's good for US Banks it's good for our economy that there be a global standard beneath which uh foreign Banks can't fall and that was one of the big Ideas behind committee approach so we're it sits now is we await um leadership arrive arriving at the OCC and the FDIC and that that seems to be happening and and when that happens we're going to sit down with them and work our way through to a BOS I think we can do this reasonably quickly one that is compliant consistent with the Basel requirements and and also consistent with what other large jurisdictions are doing I'm optimistic that we can do that fairly quickly and we're committed to doing that we always wanted our banks to be competitive with European Banks and I'm just curious the original proposal that uh was in front of you and and I'd like your thoughts on this it was estimated to increase our banks Capital by 19% which I think may very well have created a potential disadvantage with uh within the US institutions versus our European counterparts with any new proposal um what's your thoughts would you make a commitment that this would be a neutral approach with regard to Capital the main commitment I'll make is is we'll work together with with uh new leadership at the at the other banking agencies to do something but that that's certainly you know I've I've said many times in this committee that I think that the level of capital in the in the largest banks is about right uh and so it'll it'll shake out somewhere in that in that area I would our expectation would be in the markets would expect that it would be neutral with regard to uh capital in that range but I I want to I want to defer to our new colleagues U and get their views as well that but that's that's a good starting please okay thank you um the federal reserve's partnership with the US Treasury plays a central role in supporting our nation's payment infrastructure which processes a vast range of daily transactions from federal benefit dispersements to debt obligations could you outline the federal reserve's role in supporting and managing the trade systems including how the Fed works to keep these systems secure efficient and capable of handling the government's high volume of daily transactions so it's a it's it's a complicated set of arrangements and I'll I'll try to summarize quickly effectively um Congress authorized spending and then the agencies carry out those spending orders of and when the way they do that is they send an order to pay a paye a recipient to the treasury Department Upstream before it gets to the to the FED all of these decisions are made about is this an an appropriate order does the is this is this pay on the not don't pay list and all those things once it once all of that is set it comes to the fed and by that I mean four or so of the reserve banks and we actually make the payment we we take the money out of the treasury general account and we make the payment we make no judgments whatsoever those are all made Upstream from us and we are in fact the Fiscal Agent of uh of the treasury confirm for me today is the system safe today I believe it is and I will tell you we we are very strongly committed to the Integrity efficacy resilience and all those things uh of of this system and you know people do depend on this in a big way and we're committed to that one last question for you sir uh the failure of Silicon Valley Bank and the chairman brought this up I'm just curious recognizing a lot of banks out there looked at this it cost the other banks in the system a lot of money to pick up the costs involved in in the losses um nobody's been fired but you did indicate that it was a failure in the Playbook has the Playbook been revised or can we expect that it will be revised in a lot of ways it's been revised trying to turn down be the next one thing that didn't happen was for example we the supervisors didn't follow through aggressively enough on things that they'd said if they'd done that that that could well have been enough to uh to stop it but a lot of it was just not focusing enough directly on what was a very large amount of interest rate risk a large portfolio of long-term Securities matched up with a an unstable funding base and it somehow people wrote about that and not the FED but others wrote publicly about this but somehow we don't expect Bank runs outside of a crisis in this country and that's what that was it was a bank run and B Bank runs are incredibly damaging I think everyone learned a lot from that and is determined to do better thank thank you Mr chairman I think look like trying to make floor appropriately pointed out I think this is an area where a lot more questions are out there yet and I think if it's the Playbook that was the problem I think perhaps a discussion about how that Playbook has been revised would be appropriate in the future thank you Mr chairman thank you Senator Cortez Mast chairman pal thank you and thank you always uh for the conversations uh in between these hearings as well um let let me focus on a couple of things of concern um and you touched on a little bit of this and I think this is this is important to clarify there there was a change in the law when the cfpb was created uh the cfpb examines the banks and enforces the law whereas the FED only supervises those Banks is that correct or how would you how would you determine that relationship with the cfbb so Dodd Frank took um a lot of the consumer U compliance jurisdiction away from the other banking agencies and uh and gave it to a newly created agency the cfbb we retained a resid ual amount of that as we just discussed which was Banks under 10 billion in assets but the cfbb essentially took all of that uh when dodf Frank uh came into being so as it was created when you two were working together um the Federal Reserve collaborated with the consumer Bureau when supervising those large Banks correct yes we still retain supervision over all the holding companies and also of fed member banks and let me ask you this then does the Federal Reserve um enforce consumer protection laws now for things like money transmitters not for for money that would be the consumer prot cfpb okay and so when we're talking about uh collaborating with the cfpb um for financial technology firms what would the FED Reserve now do that if the cfpb if this if the hypothetical is the cfpb no longer exists what would be the fed's role right now with respect to technology firms we don't have Juris dition over we have jurisdiction over Banks and some Financial Market utilities so let me ask you this because I know there's a number of nevadans who file consumer reports of concerns about fraud and predators with the cfpb the FED Reserve doesn't receive those reports correct no I don't believe and you have no role when it comes to Consumer Protection uh like the cfpb does correct unless they do other stuff now a Fed member bank that or less in assets then then we have jurisdiction so there is a gap if if the hypothetical is true and what we're hearing that the cfpb is being shut down there is a gap what we're hearing in enforcement uh out there and particularly when it comes to Consumer Protection is that would would you say that's true yes for for all banks that we don't yeah supervis and I think that's the concern we're all having right now um is this concern of what when we're looking to streamline government and listen I'll be the first to tell you there's a lot of bloat we need to streamline it uh we need to um address regulations and overreach but there's a strategic way to do it and not this burn down the house that is going to harm people across the country including in my state those nevadans that are looking for some sort of uh enforcement uh around Consumer Protection Law so that's what you're hearing uh from many of us on on our side of the aisle here can I just very briefly add that we do have some residual enforcement authorities but what we don't have is examination Authority and for for the banks at the seef super thank you um let me let me ask you this and you know we talked about this over the phone and I understand um maybe difficult to to answer this but the Federal Reserve board members have been clear that future interest rate cuts are unlikely to happen despite the strong economy um and um but there are folks in my home that are in my state that are waiting to buy a home and we know that's still an issue the high prices right now for home affordability you add the interest rates to it it is a problem so do you think it's most likely that interest rates will remain above 6% for this year or can you even address that you know the so overall the economy is is strong growing 2 and a half% last year the labor market is is also very solid unemployment at 4% of quite a low level inflation last year was 2.6% for the year so we're in a pretty good place yeah I can see that Oscar uh we want to make more progress on inflation and we think our policy rate is good place and we don't see any reason to be in a hurry further as it relates to housing so there's a it's true that mortgage rates have gone remained high but that's not so directly related to the fed's uh rate that's really related more to long-term Bond rates particularly the treasury the 10year treasury 30-year treasury for example and those are high for reasons not particularly closely related to to Fed policy they may remain high I I think you know there's a once we lower rates and kind of rates return to a lower level mortgage rates will come down I don't know when that'll happen um and even when it does happen we're still going to have a housing shortage in many places thank you chairman pal thank you again for being here thank you ma'am next will be Senator Kennedy thank you Mr chairman thank you Mr chairman for being here thank you Mr chairman um okay thanks my friend our ranking member said that you are knuckling under to the big Bank lobbyists is that true no um it seems to me that the big p big picture should not go unnoticed do you recall a year or two ago when inflation was raging I think his Peak was about 9% many economists and other experts based in part on History said that you were going to have to provoke high unemployment and put put our country into recession in order to get inflation down do you recall that very very well are we in a recession we are not would uh you as an American trade places right now with Germany in terms of the economy no I sure wouldn't how about China no wouldn't trade Place China how about France no thanks um things aren't perfect inflation's obviously still sticky and long rates are too high which I want I want to talk about in a second no thanks but the fact is knock on wood we have experienced a soft Landing haven't we not for for me to say really um I I'll let others have we experienced a hard Landing no we sure are we in a recession no we're not I call that a soft land oh my God this dude and it seems to me that you and some of the ladies and gentlemen who are your colleagues at the Federal Reserve behind you deserve some credit for that thank you I I don't really know why you don't take the credit everybody else I do because it's not it's not real um again I'm not saying things are perfect but they would only take credit if they know nothing's going to turn down I I never imagined that our Landing could be this soft how be it not perfect and I wanted to thank you and your colleagues for that effort Landings help from from Congress and on the and uh and and our our president on the fiscal side I don't expect you com on that you you and the Federal Reserve can can to a large extent control short rates can't you yes through the uh through the U Open Market Committee um you can't control long rat though can you no we can't uh why is that so a lot of things go into long range and one of them is the expected future short rate of of fed policy but many many other things go in expectations of inflation in the longer run the the the sort of risks around uh around the economy and around the budget deficit go into something called the term premium which is the part we can't explain um when we do these decompositions and so you know it's set by supply and demand in the in the bond market at the long end and we're not particularly uh we have some influence but mostly mostly not um me many Americans are looking at Short rates and looking at the fed's uh behavior and how you you you you reduce inflation but they they don't seem uh they don't they don't see the long rates going down and obviously that in affects mortgage rates uh and I I would encourage you and your colleagues to spend some time explaining to the American people why that is final question um if you went home tonight MC at 3:45 and uh mayor pal your spouse uh said you know I got a call today from our bank and they're uh they're de banking us they're worried about their reputational risk because they don't like our politics would you think that fair no I sure wouldn't and as I as I mentioned earlier I too am troubled by the the quantity of these reports and uh you know really want to understand better why this is happening you know one theory is that banks are just very risk averse around BSA and money laundering and that's because we're so tough on them and that they just don't any red flag is enough um but I you know we we um it may be that this whole thing with reputation risk needs to be thought about I it's actually coming out of our of our One manual uh that we use we're taking that concept out of the the manual that we've been using for um for account access for master accounts we're just going to take that out um but I I think this needs a fresh look and I I think it's uh it's time for that and we're gonna we're going to do that well I've asked our chairman and he has agreed to invite uh some of the CEOs of some of the banks that have been de de banking people the CEOs not their lawyers not their PR cons priests them the CEOs to come in and let's talk about this and find out we could seeing down towards here thank you Senator Kenedy this is really dropping off Senator read uh thank you chairman Scott uh chairman P welcome thank you very much uh we'll see I think your monetary policy combined with the Biden fiscal policy over the last people are starting to switch to bullish I think that's the goal we've avoided a recession and I'd like to remind people bull Tom 2020 the gross domestic product decreased 2.2% yeah pretty much H rate finished the year at 6.7% by 2024 gross domestic product grew 2.5% the unemployment rate was 4.1% Labor Force participation rate went up from 61% to 62.5% and that's a combination of your work together with the fiscal policy of the B Administration so I thank you for that um one of the issues before us today is the issue of tariffs and July 2018 testimony you stated Mr chairman countries that have remained open to trade that have not erected barriers including tariffs have grown faster and had higher incomes do you still believe that yes I I do I would stand by that uh so president Trump's tariffs on China Canada and Mexico will obviously raise cost on families in fact some Economist many economists project about $1,200 per year incre uh households will be paying extra an increase of inflation by nearly 1% uh economic growth depression and for example the increase of the average car price by $2,700 is that a wise policy so I guess I I ought to say this um you know the I think the standard case for for uh free trade and all that logically still makes sense um it didn't work that well with when we have one very large country that doesn't really play by the rules and in any case it's not the fed's job to make or comment on tariff policy we uh you know really um that's for elected people and and it's not for us to comment ours ours is to uh try to react to it in a thoughtful sensible way and make monetary policy so that we can achieve our mandate justce weekend uh the president removed the board of the Kennedy Center made himself S Sherman what would you do if the president tried to remove a member of the Federal Reserve board well it's um it's pretty clearly um not allowed under the law thank you uh We've communicated back and forth about since risk transfer as a potential danger to the banking system uh and could you give us some insights on how we can improve Financial stability by regulating these transactions appropriately so what we've been doing for some time now is um looking at them on a case-by Case basis and if they really do transfer risk successfully then that's okay I mean you know it's it's a good thing if if a bank wants to wants to transfer risk off its balance sheet in a way that's it gets compensated for volume still holding but what you want to make sure is that that the risk is really transferred and that was the problem during the global financial crisis is was sort of things it appeared to but did not accomplish a transfer of risk so we we see this coming and we've been you know we've been looking at these transactions on on an ongoing basis well I commend you for that in fact what happens typically is the transaction becomes Complicated by synthetic synthetic risk transfers as it was the case with synthetic derivatives so thank you for your attention to that uh we've talked about housing it's absolutely critical everywhere across the country we're in a housing shortage of force housing is difficult two of The Main Stays of our housing market are Fanny May and Freddy Mack uh helping to support home ownership uh does the guarantee Fanny and Freddy help make mortgage rates more affordable and home ship home ownership more accessible Mr I I imagine it does hold down mortgage rates the fact that they're Sovereign risk and how important is the 30-year mortgage to ensure that families can afford a home in in our housing market the 30-year mortgage is very important yeah and I have heard some discussions about uh eliminating Fanny May and Freddy Mack which would be detrimental I presume to the house in MO that's really a question for uh for you you know I mean we putting putting them back in the private putting Housing Finance back in the private sector has some appeal over the longer run but I I leave that with you thank you Mr chairman very much appreciate it thank you Senator rickets well thank you uh Mr chairman and ranking member for holding this important hearing and thank you uh chairman Powell for being here today to talk about our economy and all the things that are going on I want to address uh again something that that the ranking members started talking off about the second half of February usually see side characterizing the cfpb as being the cop on the beat here but I can tell you as having been a governor and having a department of banking that reported to me that if any consumer would contact us and about a bank even a big Bank like JP Morgan we would investigate as could the OCCC the Ft FDIC FTC so to characterize it nobody's out there looking for consumers I think is inaccurate and we not to try and scare consumers right now that somehow uh this is the case because if you do have a issue if you're a consumer please reach out to your your State Department of banking because those folks are going to look out for you I can tell you that because I used to have one of those Department of banking and they did a fantastic job of looking out for the consumers um one of the things that has also impacted consumers is inflation prices under the vitamin inflation were up 20% an average household is paying $113,000 more today than they were for the same standard of living they had before Joe Biden got elected uh we see that grocery prices for example are up 22% rents up 23% simply put Nebraskans are economically worse off today than they were four years ago and I expect that that's part of the reason why we saw this change in the administration they thought that that was not something that they wanted to continue to pursue anything as bad as this they didn't want the same policies being followed we have to end the The Reckless federal spending reain in inflation and um you know be responsible about how we make decisions to be able to grow the economy one of those areas that I'm concerned about is the expansion of the FED balance sheet the fed's balance sheet before uh theend 2019 so before the pandemic was about $4.1 trillion by May of 2020 the FED expanded that to 7 trillion by the F balance sheet hit an alltime record of .9 trillion inflation peaked at 9.1% that year a high we had not seen since 1981 now I'm encouraged by the actions the FED has taken with quantitative tightening uh to shrink the balance sheet down to$ 6.85 trillion but $ 6.85 trillion is still too high and one of my concerns with this chairman is that that's kind of one of your tools to be able to guard against a downturn in the economy or some sort of shock obviously used the absolute looking Reserve continue to this course unwinding the balance sheet yes so what we said is that we intend to slow and then stop the decline when Reserve balances are somewhat above the level that we judge consistent with qu so-called ample reserves the most recent data and and the feel of the markets is definitely that reserves are still abundant uh they're about the level they were at when runoffs started because the the runoff has really happened at looks like it needs to Cur down 30 minut so yes it's it's an ongoing thing and we're not we're not yet where where we're headed so what kind of pace can we expect and I know that obviously there's going to be a lot of factors like what happens to the economy over the course of next year but if you were if if things were going to go along the way they are today you've already said the econom is doing well inflation's a little higher than we want it to be% but unemployment 4% if these commissions and I think you used the word stable quite a bit if these conditions were to remain stable throughout the course of year would you have a range that you could give us of where the ballot sheet might be uh if we were talking again here in January 2026 we we we basically we're going to be um looking at at Reserve conditions conditions in reserve markets and trying to stop a little bit above what we consider consider ample MC a little ta meing that now we we we can't put a number on it because you can't directly know volum demand for reserves other than by observing behavior in the market and then putting a little bit of a of a buffer on it so I can't give you an exact number but for now it's ongoing and uh we have a ways to go what kind of condition would happen have to happen for you to start going back to quantitative easing you know so to quantitative easing uh so you know that's a tool we we tend to use when we're at the effective lower bound CS anymore so nothing like what you're seeing in the current day we it's a different test for sto tightening but we we would use QE going forward only only in a situation when we rates are at zero Long Way Zer now so that you think that again just generally speaking then if things will remain stable you'll continue to unwind the balance sheet you'll continue the quantitative tightening um can't give me a range on this is that what I hear you saying that's right that's right okay great well I encourage you to keep doing that because again I think that's important uh to be able to make sure that you've got powdered uh for the next U issue that we may face so thank you very much you're right Joey I think that's likely Senator Warner um thank you Mr chairman chairman pal good to see you um one of the things we've talked about in the past and I've got two or three issues I want to get through fairly quickly is that our um that while our regulatory framework should always promote promote um Financial Innovation that Innovation can't uh come at the expense of things like anti anti-money laundering consumer protection Financial stability um yeah I continue to work and many of these hearings where we keep seeing this regulatory creep outside the uh the boundaries of traditional Financial regulation um I think we it's all right I think we're getting some some decent info um but I'm also going to look at this myself and I do have to head off for the time being so we were paying attention to some stuff I was just looking at that AMC run AMC starting to run into a little Wick there but still just watching like is this 30 minute going to be able to give us a good confirmation I don't think we've seen a good confirmation of this 30 minute yet the 30 minute for volatility is turning down suggesting that some upside might happen here first but we'll be paying attention um hasn't confirmed down just yet on the macd it has confirmed or trying to with the price action if you want to call it price action and the RSI so uh still just waiting to see I'm just a little bit more worried of ending up going downward first this week so it's interesting if we go upwards cuz we had upwards I think that we're going to run into a bull trap if we had down I think we're going to run into a bear trap right now actually so um I think it could go either way I'm going to be chilling watching this stuff trying to make a decision at the right time so thank you guys so much for watching today I do appreciate I know we were kind of listening in on that but that's fine I think it's good to listen to and let's just continue to trade like water and manage that risk I think this week has the opportunity to cause some confusion but at the end of the confusion there will be kind of like light at the end of the tunnel there will be a good move at the end of all the confusion um if not some moves within that confusion so that's awesome thank you guys for watching hope you guys have a great rest of your day peace out e e for
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