Federal Reserve press conference, 2020-07-29 — Chair Jerome Powell

Question (Steve Liesman, CNBC): Steve Liesman, CNBC. I hope that you can hear me. Mr. Chairman, given—you’ve said several times now that you have lending, not spending, powers. Given that a lot of the capacity of these programs has not been used and, really, barely used, do you think that some of this money that has been dedicated by the Treasury to the Federal Reserve should be considered to be used by Congress as direct grants to businesses that are in need right now or to households, given that Congress is now saying that money is limited and they shouldn’t take—they do not want to pass a very large stimulus bill? Is this money doing the best for the nation as a backstop for Federal Reserve programs that don’t seem to be being used all that much right now? Thank you. And I have a follow-up, sir.
Answer: So they—that—that’s really a question for Congress. They—they appropriated that money, and—$454 billion for our facilities, and it’s really a question for them. So you’re right that our facilities have not—we haven’t done as much lending as we thought. But, in very substantial measure, that’s because markets started working again fairly soon after we announced the facilities, particularly in the corporate credit facilities, also in the muni—in the muni space, and also in the short-term funding facilities—the three of those that we set up. So we didn’t turn out to need the kind of funding that we thought we would. On the other hand, it’s important that the facilities stay in place, and that’s why we extended them yesterday. It’s important that they still stay in place until we’re, you know, very confident that the turmoil from the pandemic and the economic fallout are behind us. So I—I can’t really speak to what Congress should do with it, but it’s important that the facilities be there and be fully funded in case the needs do arise down the road. We don’t see them now, but, in case they do arise, they should be there.

Question (Steve Liesman, CNBC): Has any consideration—thank you. Has any consideration been given to asking Congress to allow the Federal Reserve to lend to companies in bankruptcy? Thank you.
Answer: Not that I’m aware of, no.

Question (David Gura, NBC): Mr. Chairman, thank you very much. No doubt you were paying attention when two of your predecessors were up on Capitol Hill just a few days ago answering some questions from—from lawmakers. And a question they each answered had to do with the continuation of these pandemic unemployment benefits. And something we’ve heard a lot is that they could be a disincentive to work. Both of them addressed that. I wonder if you would as well. And then, as a follow-up, I wonder what you’ve learned about the degree to which this has led to a widening of the wealth gap in this country, the degree to which maybe people are experiencing two different kinds of—of pandemics here. Some are getting through this based on what they’ve saved and the jobs that they have. Others are really struggling to get by. And I wonder what role—what additional role the Fed could have in, sort of, bridging that—that yawning gap.
Answer: So, on your first question, I wouldn’t want to be giving very detailed, specific advice on particular programs and the level they should be at and that kind of thing. I just will say the following, that, you know, this—this pandemic and its fallout really represents the biggest shock to the U.S. economy in living memory. We went from the lowest levels of unemployment we’d had in 50 years to the highest levels we’ve had in 90 years, and we did it in the space of two months. And I would say that the response from the fiscal authorities was strong, it was fast, it was broad—and appropriately so. And I think we are seeing the results of the earlier strong fiscal actions. When you see the spending that’s happening, when you see small businesses staying in business even though the economy hasn’t fully, successfully, sustainably reopened yet in many places, you are seeing what happens with that—that money. And so, in—in a broad sense, it’s been well spent. It’s kept people in their homes. It’s kept businesses in business. And that’s all a good thing. I think, in the broad scheme of things, that there will be a need both for more support from us and from more fiscal policy. Fiscal policy is up to Congress. You see the ongoing discussions that they’re having. And it suggests to me that there’s—you know, that both sides, they’re wrangling over—over various provisions but nonetheless believe that there is a need for some additional fiscal support. And the last thing I’ll say is that if the expansion—even if—sorry. Even if the reopening goes well and many, many people go back to work, it’s still going to take a fairly long time for the parts of the economy that are—that involve lots of people getting together in close proximity. And that means that many of the people who were laid off from those industries—and that’s restaurants, you know, bars, hotels, public entertainment, all of those places, travel and accommodation—many of those people are going to find it hard to go back—they can’t go back to their old job. There won’t be enough jobs for them. So I think those people are going to need support. I can’t say what the exact level should be. It’s not our role. But they’re going to need support if they’re to be able to pay their bills, to continue spending money, to remain in their current rental house or—or apartment or a house if they own it. So I think there will be a need. In terms of inequality, really—so I think it’s fair to say that the burdens of the pandemic have fallen on, heavily—they’ve fallen on everyone, but they’ve fallen very heavily on people who work in the service industries in relatively low-paying jobs. So there was a—a figure that came out of some of our research that was that if you make $40,000 a year or less, then 40 percent—you had a 40 percent chance of losing your job in April and May. So it’s falling very heavily on—on people who have the least financial wherewithal to, you know, to bear that. And that happens to be heavily skewed to minorities and to women. So that’s just what the pandemic is doing. You know, in terms of what we’re doing, what we’re trying to do is create an environment in the financial markets and in the economy where those people have the best chance they can have to go back to work to their old job or to a new job. That’s really what we’re doing. Everything we do is directed at that. And, you know, the—I would say—I would say one last thing on inequality. That is, inequality is a—is an issue—has been a growing issue in our country and in our economy for four decades. And you see it—it has many faces. You see it in the relative flattening-out of—of incomes for people in low and—lower and middle incomes as compared to those at the top. You see it in low mobility where people—where the chances of moving up from the bottom to the middle or the top have declined and are lower than they are in other comparable wealthy countries. So it’s a serious economic problem for the United States, but it’s—it’s got underlying causes that are not related to monetary policy or to our response to the pandemic. Again, four decades of evidence suggests it’s about globalization. It’s about the flattening-out of educational attainment in the United States compared to our other competitor countries. It’s about technology advancing, too. If you’re on the wrong side of those forces, it’s been—your income has stagnated. So it’s—it’s a critical, critical problem for our society, but one that really falls mainly to fiscal policy and other policies. Our part of it is to—is to push as hard as we can on our employment mandate while keeping price stability. We saw what happened to people at—at the lower end of the income spectrum late in the last expansion. It was the best labor market in 50 years, they told us. We saw that the biggest wage increases were going to people at the bottom end of the—of the wage spectrum for the last couple of years of that 10-year, 8-month expansion. So a tight labor market is probably the best thing that the Fed can foster to—to go after that—that problem, which is a—a serious one.

Question (Nick Timiraos, Wall Street Journal): Yeah. [Inaudible] Journal. Chair Powell, you have described your asset purchase objective as stabilizing markets. And with markets having stabilized, aren’t the asset purchases now doing more than address market function by supporting your macroeconomic objectives? The other question I have is, what is your strategy going to be with respect to using asset purchases to support your macroeconomic objectives going forward? Thanks.
Answer: So you’re right, the asset purchases in—in their current size really sprang from severe dysfunction in the Treasury and MBS markets at the beginning of the market reaction to the pandemic. And thanks to those purchases, we have substantially restored—not fully, but substantially restored functioning markets. This is absolutely critical. That market is really one of the—it’s part of the absolute bedrock of the global financial markets, and it’s—it’s essential that it—that it work well, and it is doing so now. And we’ve always said, though, that we understand, accept, and are fine with the fact that—that those purchases are also fostering a more accommodative stance of monetary policy, which would tend to support macroeconomic outcomes. So it’s doing both, and—and, you know, we’ve understood that for some time. It’s not—the programs are not structured exactly like the—the QE programs were in the last—in the last financial—in the aftermath of the last financial crisis. Those were more focused on buying longer-run securities. The current purchases are all across the—the maturity spectrum. Nonetheless, they are supporting accommodative financial conditions. I think it’s—it’s clear that that’s the case. In terms of our strategy, you know, that just remains to be seen. We—as you know, we’ve spent a lot of time in meetings this year looking at the tools that we have to adjust our current stance of policy. We do feel that our current monetary policy stance is the appropriate one. You know, we cut rates close to zero right at the beginning. We—we ramped up asset purchases, and those—those have really helped. And we gave forward guidance on—on both of those things, which the markets appear to understand, and market pricing is consistent with those. So we think we’re—we think that our—our policy stance is a good one. We’re, of course, prepared to adjust that stance as appropriate and when we deem it as appropriate to—to better foster achievement of our goals, of course.

Question (Jeanna Smialek, New York Times): Hi, Chair Powell. Thank you for taking my question. You talked to Larry Fink at BlackRock in March, April, and May, according to your public calendars. I was wondering if you could tell us a little bit about what you talked about, and, if the topic of those conversations was the corporate credit facilities, how did you handle potential conflicts of interest during those conversations?
Answer: Well, so—so BlackRock is just our agent. You know, we make the policy decisions in conjunction with our colleagues, and they just execute our—our plans. I actually don’t remember exactly what I would have been talking with him about, but he’s a—you know, he’s the head of a major service provider. He generally checks in to find out whether we’re okay with the quality of the service that—that BlackRock is providing. I don’t have the daily face-to-face interaction with anybody else at BlackRock or—or, as you can see, three phone calls in the course of a few months. It wasn’t very many. So I think, you know, their conflicts are managed extremely carefully in the contractual arrangements we have with them. And, again, I would have—I—I can’t recall exactly what those conversations were, but they were—they would have been about what are you seeing in the markets and things like that too—you know, generally exchanging information. And he’s—he’s typically trying to make sure that—that we are getting good service from the company that he founded and leads. That’s—I’d say that’s his main objective when we talk.

Question (Scott Horsley, NPR): Thank you, Mr. Chairman. Scott Horsley from NPR. I wonder if you can give us an update on the coin shortage that you talked to lawmakers about last month and what, if anything, that tells us about the, sort of, economic circulatory system.
Answer: Yes. So—the situation with coins is that the—the quantity of coins is going up but was adequate before the pandemic. The problem is, the circulation kind of stopped because stores were closed, banks were closed. It just—customers weren’t spending, they were—so the coins stopped moving in the system. So we’ve been working for—ever since that began to happen, we saw it happening right away. We’ve been working to try to—try to reverse that disruption of the supply chain and restore normal circulation for our coins. So we’re working with the U.S. Mint, which is the issuing authority, to address the issue. Just last week, the Mint—you may have seen—issued a statement asking for the public’s help in keeping coins circulating, and various people, you know, went and put their coins back into circulation. We also created a coin task force with all of the stakeholders—you know, banks and, you know, the armored carriers, the banking community, credit unions, everybody in the—in the coin supply chain. We’re in frequent communication with the banks and with the—with the armored carriers trying to get back to where we need to be. So we do think the inventories are building up. You know, the Mint—the Mint is making coins as fast as they can, but—but, you know, things happen with—in the factory environment: Someone will come to work with COVID—I think this has happened in—in almost every factory environment around the country—and then they’ll shut down for a day, and then they come back, and that kind of thing. So—so we’re closely monitoring it. It’s—you know, it’s a significant issue. We’ve—we’ve got a lot of resources on it, and we do feel like we’re—we’re making progress.

Question (Christopher Rugaber, Associated Press): Hi. Well, just to follow up on that a bit—and thanks for taking my question—you added the sentence into the statement about the course of the economy depends on the path of the virus. Is this—do you feel this idea, or this view, is not widely enough understood? Do you feel—you had warned back in May that too early reopening or an incautious reopening might harm the economy. Do you feel that message was not heard, and that some of these reopenings took place perhaps sooner than they should have?
Answer: You know, I think we feel that it—it might be, the most central fact or the most central driver of the path of the economy right now is the virus. And you’re seeing that again now. You saw that in the—during the lockdown when we got cases way down, and you saw the economy reopening, and you saw spending go up and hiring go up. And now that the—that the cases have spiked again—again, the early data, the high-frequency data suggest that there is a slower pace of growth, at least for now. We don’t know how deep or how long that will be. So it’s such an important sentence. We just decided that it needed to be in our—in our postmeeting statement. It’s so fundamental. And, you know, I think we can’t say it enough. It’s—it’s really important. We’re—you know, you can think of it as three stages. There’s the lockdown, and we know what that looks like, and we’ll get the data, I guess, later this week on GDP being down very historically large amounts. Then there was the reopening, and we would expect that many, many people would go back to work. Those whose jobs could be done without—you know, without exposure to lots of people in tight groups, they should have been—they should be able to go back to work during that phase fairly quickly. But that would depend on being able to keep the virus under control, which will depend on wearing masks and other social-distancing measures. So that’s where we are. It’s such an important factor. It’s—it’s in—we’re all talking about it, so we thought it really had to be in the statement.

Question (Michael McKee, Bloomberg): Mr. Chairman, I’m wondering what it is—you’ve talked a lot about using all of your tools, and Governor Brainard talked about moving from support to accommodation—what it is you can actually do. You’ve lowered rates to zero. You’ve set up the lending programs. There hasn’t been much take-up. And the tools you talk about are generally in service of keeping interest rates low, where they already are. So unless you were to go to negative interest rates, I’m wondering what additional accommodation the Fed can bring. Or is it really up to the fiscal authorities at this point to rescue the economy, to—to add additional help for it?
Answer: Right. So you’re right. We are committed to using our full range of tools to support the U.S. economy at this difficult time, and we will always remain committed in that sense. We feel like we have ways to further support the economy certainly through our credit and liquidity facilities, which are effectively unlimited. We can adjust those programs. We also can adjust our forward guidance. We can adjust our asset purchases. So there are things that we can do. We—we feel like we have the ability to do more. But I would not disagree with the—with the importance of fiscal policy—with your statement about the importance of fiscal policy. Fiscal policy can do—can address things that we can’t address. If there are particular groups that need help, that need direct monetary help— not a loan, but an actual grant as the PPP program showed—you can save a lot of businesses and a lot of jobs with those in a case where lending a company money might not be the right answer. The company might not want to take a loan out in order to pay workers who can’t work because there’s no business. So lending is a particular tool, and we’re using it very aggressively. But fiscal policy is essential here, and I would say, again, Congress’s action early in the pandemic—historically large by any standard around the world, and certainly by U.S. standards—it’s really helping now. It’s really helping. It’s going to stand up very well to—to scrutiny down the years. This Congress’s very fast and very open-handed response, I think, has really helped. And I think—I know that, as I’ve said, very likely more will be needed from— from all of us, and I see Congress negotiating now over—over a new package, and I think that’s a good thing.

Question (Catarina Saraiva, Bloomberg): Hi, Chair. Thanks for taking our questions. You mentioned earlier that the labor market we had in February was the best we’ve had in 50 years, yet at that point the Black unemployment rate was still double that of whites. So I wanted to ask you, you know, we’ve seen some economists and even the Biden campaign call for the Fed to more specifically target the gap between minority unemployment rates. Even if you don’t get a mandate on this from Congress, is it something you would consider more explicitly going forward? And how would you do that? And then I also wanted to ask you about former economist Claudia Sahm’s writings from last night. She gave a pretty harrowing account of her time at the Fed—described harassment and professional gaslighting that others have also spoken to. Is this your Federal Reserve?
Answer: Okay. So, first, on the unemployment, you’re right. And we always point this out in our—in our remarks. While the aggregate unemployment rate was 3½ percent, every—every economy—every market in every economy has longer-run issues. And one of ours is just the disparate level of unemployment between—between Blacks and whites. And it’s generally sort of twice as much—twice as high for Blacks. So even—but this was the lowest, you know, Black unemployment rate in 50 years—or, actually, since we started keeping records, which was less than 50 years ago. So that’s just a fact, and it’s—it’s not a good fact, you know. So we have started, though, in recent years to focus considerable time and attention on disparate levels of unemployment—for example, among—among different racial groups and demographic groups. We regularly discuss those differences in our FOMC discussions. We call them out in testimony and in speeches and in our Monetary Policy Report to Congress. You’ll see it everywhere, in all the things that we do. So what does that mean? I think—you know, I think what we learned is that a tight labor market really does a lot of good things for minorities and people at the lower end of the income spectrum generally. But it—you know, tight labor markets, it took 8 years—it took sort of the 8th and 9th and 10th years of that expansion to get to those benefits. So we need more than that. That’s not a good strategy, waiting 8, 9, 10 years to get there. So we’re—we’re going to get back there as fast as we can, because that’s what we can do, but society more broadly can affect these things. You know, we don’t really have tools that can address distributional, disparate outcomes as well as fiscal policy. And just policy generally—education, health care, all those things are much better at doing that. In terms of—so we do—you will see that—you will see that discussed—the Black unemployment rate discussed all the time in what we do. And I think we clearly understand now that it’s something to weigh when you get a tight labor market. It’s something that you want to be focused on and weigh. So it is very much in our thinking—again, in a world where we don’t really have the best tools to address that. So, something that we’re doing. So I have not seen that—I did not see that blog post yet, although someone did mention it to me. We, of course, have been in meetings until just before this. So, but—and I will take a look at it. I will do that. And, you know, I—without having had a chance to think about it, read it, understand it, I’ll just say a couple things. First, I think it’s fair to acknowledge that there’s been a lot of pain and injustice and unfair treatment that women have experienced in the workplace—not just among economists, but among economists and at the Fed. That’s been going on for far too long. And, you know, like every other organization, the Fed could have done more and—and should have done more. I would say, though, that we—you know, we have made it a very high priority to have as diverse and inclusive an organization as we can. And I think we’ve made a lot of progress on that. I think we want a place where it’s free to speak, where views are welcome, where people can disagree but must do so respectfully. I think a lot of organizations are coming around to understanding the importance of that. And I—my experience has been, you know, from my career in business too, is that organizations—the really successful organizations in our society get this. They do. They—mostly, they get it that if you want to attract the best people, this is what you—you’re going to attract the best people by having a diverse and inclusive workforce, so—and workplace. So we’ve made diversity a priority. We actually—you know, this has been a big issue for the economics profession. We had the—the two heads of the AEA task force on this—who happen to be named Ben Bernanke and Janet Yellen—come here, and I cohosted a—an event with them, I guess, last year or the year before, which had several hundred—500 people or something like that listening in about—about these issues. So we’re doing a lot. I’m sure we can do more. We’re doing a lot to—you know, to foster a respectful climate—particularly for women, but for—for all people. So it’s—it’s a very high priority for us as an organization. I will look into—into that and—when I—you know, when this is over.

Question (Don Lee, Los Angeles Times): Chair Powell, on the labor market, jobless claims rose again recently, and new hiring activity has weakened. I wonder, how big are the risks of the unemployment rate rising and job growth turning negative this summer?
Answer: So as I mentioned earlier, you know, we’re watching this high- frequency data. And, of course, the official labor market reports come out once a month, and no one has had a very good record lately of predicting what they’re going to say. They’ve been, in May and June, stronger than anybody expected, particularly in May. So I would say, some humility is appropriate here in terms of thinking we understand exactly where this is going. I think all we can say today is that there’s—there’s evidence in the high-frequency data, the surveys, and, you know, you’re tracking—you get pictures of spending. You get pictures of people’s movements. And what we—it looks like we’re seeing a slowdown in the rate of growth. That’s—and that might be—it might be short lived, it might not be, you know. And it seems to be related to—and the timing of it seems to be related to the spike in cases that began in the middle of June. Now, I really don’t want to get ahead of where the data are on this. So we’re just going to have to see. We’re going to have to—the data over the next couple of months will answer that question. And recent experience suggests we—we need to wait and see. In any case, there’s clearly a risk that we’re going to see a slowdown in the rate of growth in economic activity and in hiring. It might still be at a robust level. Honestly, we—we will not know until we start to see more data come in.

Question (Victoria Guida, Politico): Hi. Victoria Guida with Politico. Thanks for taking my question. I wanted to ask about the 13(3) facilities. You all have used your emergency authority to buy assets that you can’t directly buy, like corporate bonds, ETFs. So I was just wondering, what is the scope of your authority under 13(3)? What type of assets are you allowed to buy? Could you buy equities through an SPV, for example?
Answer: You know, we haven’t—we haven’t looked at that, and we have no—no intention. We haven’t done any work or thought about buying equities. But, you know, we—we’re bound by the—by the provisions of 13(3), which requires that we make, you know, facilities—programs or facilities of broad applicability, meaning we have to have—it can’t just be focused on one entity. You know, it has to be a broad group of entities. There’s a lot in 13(3) about—about the solvency of the borrowers. You know, remember, it was rewritten or amended after the financial crisis, and it was written in a way that was—that was to—meant to make it challenging to bail out large financial institutions. That’s— there was a lot in there to make sure that, you know, that they were going to be solvent and things like that. So, you know, we have to meet those requirements. You know, we haven’t looked and said—tried to say, “What can we buy?” and, you know, “Let’s make a complete list.” You know, we felt that, using these facilities, that we could buy corporate bonds and—and municipal bonds, too. So—

Question (Victoria Guida, Politico): So I just—sorry, just to follow up really quickly. So is it—is it generally supposed to be primarily directed at debt instruments, since you talked about borrowers?
Answer: The statute doesn’t say that, but, yeah, you could read the statute that way if you want. Honestly, we haven’t tried to push it to, you know, what’s the theoretical limit of it. I mean, I think, clearly, it’s—it’s supposed to—it’s supposed to replace lending, you know. That’s—that’s really what you’re doing. You’re stepping in to provide credit at times when the market has stopped functioning. That’s fundamentally what you’re doing with 13(3). And—and so I think you’ve got to—you’ve got to sort of work within that framework.

Question (Greg Robb, MarketWatch): Hi. Thanks for taking my question. Greg Robb from MarketWatch. Can you hear me? Okay. One of the things in this crisis that’s unusual is that companies are cutting wages and salaries, and that’s something, you know, we haven’t seen much. And I was wondering what the Fed is thinking about this. It—it seems to indicate that inflation could be more volatile in coming—coming months and coming years.
Answer: Well, I—I think that the main thing that tells you is that the—the labor market has a long way to go to recover. You know, we had a good labor market. It wasn’t perfect. There were always issues. There are always going to be issues within an economy. But the labor market really has a long way to go now. Even with two very strong months of job creation—7½ million jobs between the two months—we still have 14 million people unemployed. So it’s just—it’s a long way to go. And as—and that leads to a situation where there are so many people looking for jobs, and we have the economy only partially reopened. So there aren’t, you know—until the economy—or as the economy fully reopens, people can go back to work, but—so it’s a tough situation. And I’ve read reports of that. You know, of course, the reported wages went up because of the composition effect—you know, it’s low-paid workers didn’t go back to work, so—they were the ones that got laid off—so average hourly earnings went up. But clearly, clearly the pressure—there will not be much upward pressure on wages and compensation at the aggregate level here in a world where there are just an awful lot of people looking for work. And the main—so it just underscores again the—the urgency of doing everything we can to restore the labor force and—and to support those who are—who want to be in the labor force but whose jobs have gone away for some period of time as they find other work due to this natural disaster.

Question (Jean Yung, MNI): Hi, Chair Powell. Thank you very much. I wanted to ask about forward guidance. Do you see merits to tying your asset purchases to economic outcomes? And would you consider both inflation and labor market conditions as part of those outcomes? And specifically, for the labor market, what conditions would you want to see before you think about pulling back stimulus? Thank you.
Answer: So that’s a great discussion that we—we’ve talked about that at past meetings, and I imagine we will at future meetings and haven’t made any decisions yet on that. But, you know, you’ve got a couple ways to go. You can tie—you can tie them to dates. You can say we will—for a specific period of time, we will keep rates at X level. Or you can say we’ll keep them there until you achieve a certain macroeconomic goal. And it can either be inflation or it could be an employment goal, as you pointed out. And I think that, you know, there’s attraction in all of those depending on the situation, I think, for obvious reasons. You can imagine situations where, you know, where you’d really want to be targeting macroeconomic outcomes. It’s also the case, though, that sometimes— sometimes date-based guidance works too. I think it really is very fact specific, and it’s not something we’ve—you know, we haven’t made any decisions on that, so I wouldn’t be standing here telling you we’re going to go this way or that way, you know, should the time come for us to—to change our forward guidance.

Question (Hannah Lang, American Banker): Hi, Chair Powell. Thanks for doing this today. I wanted to ask, on the stimulus bill that Senate Republicans are considering, they’ve said that they’re weighing whether to revise the Collins Amendment in order to ease the tier 1 leverage ratio for banks. Are you concerned that doing so will deplete bank capital, given that the Fed’s stress tests showed that, under the most severe scenarios for economic recovery, that several banks would approach the regulatory minimum capital requirements?
Answer: So—okay. So I think what the stress tests showed is that, under the “regular way” stress test, the banks passed. But right in the middle of the—of the stress test came the pandemic. And so we quickly dropped in three other scenarios, which were, you know, really bad scenarios. And many of the banks passed, but some didn’t. So we—and that was done very quickly. So we pivoted, and we used the provision that says we can—that says there’s been a material change, and we’re going to ask them to resubmit their capital plans. We also stopped buybacks—share buybacks and limited dividends. So we’re working through the details of how all of that will work. I think we’re going to—I think we’re going to send out the—the stress scenarios on September 30th. So, I would say, that’s—you know, that—that process is working that way. And—but you’re making a connection to it, to the Collins Amendment fix. So what’s going on there is that, like many other supervisors and regulators around the world, what we found is that our—we have found our banks are strong. They’re strongly capitalized, with lots of liquidity. And they’ve really been a source of strength in this—in this crisis so far. And they’ve written off bad loans and things like that. They’re still well capitalized and strong and will be, I think, a source of strength in this situation. So—but what—what we did earlier was, we—what happens is, the banks run up against their leverage ratio, which is a non-risk-sensitive measure just of the amount of assets on the balance sheet. So people put cash in—on deposit at the banks, and they reached the limit of how—how much they could grow or made loans—you know, they—companies drew down loans and deposited cash. So we gave some leverage ratio relief earlier by temporarily—it’s temporary relief—by eliminating, temporarily, Treasuries from the calculation of the—of the leverage ratio. This is a—this is another additional thing to do. If Congress chooses to do this, we would want it to be explicitly temporary. We—in other words, this will not be a permanent change in capital standards. We haven’t decided to do it, but it would give us the ability to allow banks to grow their balance sheet and, in doing so, to serve their customers better. And, you know, I have to tell you, if you look around the world, bank regulators—many, many bank regulators around the world have given leverage ratio relief. You know, Swiss National Bank, the Bank of Japan, the European Commission did, the Bank of Canada did, we did. It’s—it’s not, it’s not—what it’s doing is, it’s allowing them to grow their balance sheet in a way that serves their customers. That—that’s really what it’s doing. And, again, I would want it to be explicitly temporary if—if we do do it.

Question (Brian Cheung, Yahoo Finance): Hi, Chairman Powell. Thanks so much. Brian Cheung with Yahoo Finance. I wanted to ask just how the framework review is working in tandem with your discussion on explicit forward guidance. So is the idea that you’re trying to have some order to that, that you would announce the findings of the Fed review before then committing to some sort of explicit forward guidance or even yield curve control policy? Thanks.
Answer: You know, so I do think that completion of the review would—first of all, it’s something that was a very high priority for—we were really looking forward to completing it, probably, at the June meeting, but it might have been the meeting before that. We were right on track, and then we got distracted. I—and we weren’t expecting the pandemic, of course. Nobody was. So the pandemic came in. I think it is important to go back and finish that, and I do think that will inform, you know, everything we do going forward. I would also tell you, though, that, to—to a very large extent, the—the changes we’ll make to the Statement of [on] Longer-Run Goals and Monetary Policy Strategy are really codifying the way we’re already acting with our policies. To a large extent, we’re already doing the things that are—that are in there. This is just a way of—of acknowledging that and putting them in the document. I can’t tell you what the exact timing of that will be, but I do think that’s a—that’s a sensible way to think about it. Thanks very much.