he died suddenly of a massive heart attack, i had learned enough to take his place as chief executive officer. my banking education began with him as my mentor and with plenty of on - the - job training. because the bank was just starting up, there were only 11 employees. with lots of work to be done and not many people to do it, i was able to try my hand at nearly every job at the bank and to see the results of every action that was taken. one of those early jobs was reconciling the bank ’ s account at the federal reserve and calculating the bank ’ s reserve position. today, i spend a lot of my time thinking about the collective reserves held by all banks and how those reserves impact our economy. my early experiences with making reserve decisions for a tiny community bank makes it much easier to connect the dots between federal reserve actions to add or withdraw reserves, bankers ’ decisions to manage their reserve accounts, and the resulting impact on interest rates, which in turn influence economic activity. the banking industry has a tradition of teaching basic concepts of bank management through in - house or industry - sponsored banking schools. once i realized that my talent for banking was much stronger than my natural acting ability, i started going to banking schools bis central bankers ’ speeches to learn about bank investments, lending, and bank management. and i earned a masters in business administration while going to school at night. i soon began teaching bank management in the same schools i had attended earlier. one of the best teaching tools i discovered was bank simulation. i worked with a number of models, helped design a few of them, and ran several hundred simulation exercises over the years. as issues have developed throughout the financial crisis and the recovery, i have had more than a few occasions to be grateful for the deep understanding of how banks and bankers react to various external conditions that i gained from all those simulations. i guess you could say that, though i was the teacher, the person who learned the most from those simulations was me. and i have discovered that the federal reserve uses its own models of the economy to simulate outcomes and create economic forecasts under a variety of assumptions. much of my time as a community banker was spent lending to small businesses. in many banks today, small business lending is an automated process that relies on computers to analyze data and determine a borrower ’ s creditworthiness. for me, the process was personal. it involved sitting eyeball to eyeball across the table from

jerome h powell : coronavirus aid, relief, and economic security act testimony of mr jerome h powell, chair of the board of governors of the federal reserve system, before the committee on banking, housing, and urban affairs, us senate, washington, dc, 1 december 2020. * * * chairman crapo, ranking member brown, and other members of the committee, thank you for the opportunity to update you on our ongoing measures to address the hardship wrought by the pandemic. our public health professionals continue to deliver our most important response, and we remain grateful for their service. the federal reserve, along with others across government, is using its policies to help alleviate the economic burden. since the pandemic ’ s onset, we have taken forceful actions to provide relief and stability, to ensure that the recovery will be as strong as possible, and to limit lasting damage to the economy. economic activity has continued to recover from its depressed second - quarter level. the reopening of the economy led to a rapid rebound in activity, and real gross domestic product, or gdp, rose at an annual rate of 33 percent in the third quarter. in recent months, however, the pace of improvement has moderated. household spending on goods, especially durable goods, has been strong and has moved above its pre - pandemic level. in contrast, spending on services remains low largely because of ongoing weakness in sectors that typically require people to gather closely, including travel and hospitality. the overall rebound in household spending is due, in part, to federal stimulus payments and expanded unemployment benefits, which provided essential support to many families and individuals. in the labor market, more than half of the 22 million jobs that were lost in march and april have been regained, as many people were able to return to work. as with overall economic activity, the pace of improvement in the labor market has moderated. although we welcome this progress, we will not lose sight of the millions of americans who remain out of work. the economic downturn has not fallen equally on all americans, and those least able to shoulder the burden have been hardest hit. in particular, the high level of joblessness has been especially severe for lower - wage workers in the services sector, for women, and for african americans and hispanics. the economic dislocation has upended many lives and created great uncertainty about the future. as we have emphasized throughout the pandemic, the outlook for the economy is extraordinarily uncertain and