Jerome H Powell: Confirmation hearing
Testimony by Mr Jerome H Powell, Member of the Board of Governors of the Federal Reserve
System, before the Committee on Banking, Housing, and Urban Affairs, US Senate, Washington
DC, 28 November 2017.
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Chairman Crapo, Ranking Member Brown, and other members of the Committee, thank you for
expeditiously scheduling this hearing and providing me the opportunity to appear before you
today. I would also like to express my gratitude to President Trump for the confidence he has
shown by nominating me to serve as Chairman of the Board of Governors of the Federal
Reserve System. The Federal Reserve has had a productive relationship with this Committee
over the years, and, if you and your colleagues see fit to confirm me, I look forward to working
closely with you in the years ahead.
Before I continue, I would like to introduce my wife, Elissa, who is sitting behind me. I would not
be here today without her unstinting love, support, and wise counsel.
As you know, I have served as a member of the Board of Governors and the Federal Open
Market Committee (FOMC) for more than five years, contributing in a variety of capacities,
including most recently as chairman of the Board's Committee on Supervision and Regulation.
My views on a wide range of monetary policy and regulatory issues are on the public record in
speeches and testimonies during my service at the Fed. The Congress established the Federal
Reserve more than a century ago to provide a safer and more flexible monetary and financial
system. And, almost exactly 40 years ago, it assigned us monetary policy goals: maximum
employment, meaning people who want to work either have a job or are likely to find one fairly
quickly; and price stability,meaning inflation is low and stable enough that it need not figure into
households' and businesses' economic decisions.
I have had the great privilege of serving under Chairman Bernanke and Chair Yellen, and, like
them, I will do everything in my power to achieve those goals while preserving the Federal
Reserve's independent and nonpartisan status that is so vital to their pursuit. In our democracy,
transparency and accountability must accompany that independence. We are transparent and
accountable in many ways. Among them, we affirm our numerical inflation objective annually and
publish our economic and interest rate projections quarterly. And, since 2011, the Chairman has
conducted regular news conferences to explain the FOMC's thinking. Additionally, we are
accountable to the people's representatives through twice-a-year reports, testimony, oversight,
and audited financial statements. I am strongly committed to that framework of transparency and
accountability and to continuing to look for ways to enhance it. In our federated system, members
of the Washington-based Board of Governors participate in FOMC deliberations with the
presidents of the 12 regional Federal Reserve Banks, which are deeply rooted in their local
communities. I am a strong supporter of this institutional structure, which helps ensure a
diversity of perspectives on monetary policy and helps sustain the public's support for the
Federal Reserve as an institution.
If confirmed, I would strive, along with my colleagues, to support the economy's continued
progress toward full recovery. Our aim is to sustain a strong jobs market with inflation moving
gradually up toward our target. We expect interest rates to rise somewhat further and the size of
our balance sheet to gradually shrink. However, while we endeavor to make the path of policy as
predictable as possible, the future cannot be known with certainty. So we must retain the
flexibility to adjust our policies in response to economic developments. Above all, even as we
draw on the lessons of the past, we must be prepared to respond decisively and with appropriate
force to new and unexpected threats to our nation's financial stability and economic prosperity-
the original motivation for the Federal Reserve's founding.
As a regulator and supervisor of banking institutions, in collaboration with other federal and state
agencies, we must help ensure that our financial system remains both stable and efficient. Our
financial system is without doubt far stronger and more resilient than it was a decade ago. Our
banks have much higher levels of capital and liquid assets, are more aware of the risks they run,
and are better able to manage those risks. Even as we have worked to implement
improvements, we also have sought to tailor regulation and supervision to the size and risk
profile of banks, particularly community institutions. We will continue to consider appropriate
ways to ease regulatory burdens while preserving core reforms-strong levels of capital and
liquidity, stress testing, and resolution planning-so that banks can provide the credit to families
and businesses necessary to sustain a prosperous economy. In doing so, we must be clear and
transparent about the principles that are driving our decisions and about the expectations we
have for the institutions we regulate.
To conclude, inside the Federal Reserve, we understand that our decisions in all these areas
matter for American families and communities. I am committed to making decisions objectively
and based on the best available evidence. In doing so, I would be guided solely by our mandate
from the Congress and the long-run interests of the American public.
Thank you. I would be happy to respond to your questions.