Chair, Federal Reserve of the United States
Fed Chair Jerome Powell testifies on Capitol Hill on economic recovery
Federal Reserve chairman Jerome Powell testifies on Capitol Hill before the Senate Banking Committee. Senator Sherrod Brown (D-Ohio) asks how the Fed is working to support women who want to return to the workforce and address racial injustice. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi
Rising bond yields and accompanying inflation fears are adding a level of drama to Federal Reserve Chairman Jerome Powell’s appearance this week before Congress.
The central bank chair is slated to address Senate and House panels on successive days as part o...
About Jerome Powell
Jerome Powell, the former chair of the U.S. Federal Reserve, received the 2026 John F. Kennedy Profile in Courage Award in May 2026 at a ceremony in Boston. In his acceptance speech, Powell said the Federal Reserve had been undergoing a "stress test," and warned against political interference in monetary policy. He stated that the Fed makes its decisions based on economic analysis and does not "take into account the fortunes of any political party or politician in making those decisions." Powell argued that legal protections insulating the Fed from political pressure have served the public well, and said that "if any administration finds a way to remove Fed officials over policy differences, then future administrations will do so as well," adding that the Fed's credibility would be lost. Powell’s eight-year term as Fed chair ended on May 15, 2026. He announced during an April FOMC press conference that he would remain on the Board of Governors for an unspecified period, saying his decision was driven by concerns over "legal attacks on the Fed" by the administration. He stated he planned to keep "a low profile" and that Kevin Warsh, once confirmed and sworn in, would be the new chair. In his last FOMC press conference, the committee held interest rates steady, noting that inflation was elevated in part due to rising global energy prices and citing a high level of uncertainty in the economic outlook.
Transcript (7 segments)
✨ AI-enhanced transcript with speaker attribution
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Reporter0:00
Researchers in Minneapolis Fed say the pandemic is forcing mothers of young children out of the workforce. Some three million women have been forced out of the paid labor market in the past year. Everyday families face impossible choices between their paychecks and caring for their children. The Buy and Rescue Plan, as you know, provides the funding we need to get Americans vaccinated, as you suggest is the right policy, and that will help kids go back to school, to help working moms back to work, get back to work safely. What can the Fed do to make sure women, especially those with young children, can return to the workforce so that we don't end up with an even bigger, lasting gender gap in the labor market?
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Jerome Powell0:41
So the tools that can really address specific groups, for example women who've perhaps temporarily dropped out of the labor force, those are really fiscal policy tools. Obviously those are not tools that we have, and I today will stay away from fiscal policy and really talk about what we can do. I think the main thing that we can do is continue to support the economy, give it the support that it needs. We're still 10 million jobs below the level of payroll jobs before the crisis. There's still a long way to go to full recovery, and we intend to keep our policy supportive of that recovery.
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Reporter1:19
Thank you for acknowledging in your opening statement and your comments to many of us, in our public comments frankly, about how much we need to do to fight racism and increase diversity. Yet we know historically the Fed's monetary policy has benefited wealthy savers and homeowners. Decades of discrimination in the financial system we talked about earlier, from redlining to the subprime mortgage crisis, specifically targeted Black, Brown, and other vulnerable communities. It's clear the Fed's policy and failure to regulate predatory actions in the banking sector have contributed to the racial wealth, income, and homeownership gaps. You've said that the Fed's tools can't address the underlying causes of racial injustice or income and wealth inequality in our economy. I think you give up a little too easily when you say that. So how does the Fed, how can the Fed use its supervision authority to enforce anti-discrimination laws and fight racial injustice and income inequality?
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Jerome Powell2:22
We do have responsibilities and authorities for fair lending, for example, under a number of statutes, and we take those responsibilities very seriously and carry them out robustly. That is an important part of our mandate, and that is something that we could do and I think we do aggressively. In addition, through our Consumer Community Affairs Division and through the Federal Reserve Banks, we try to attract private resources around, for example, initiatives that will address issues of economic issues of low and moderate income communities and racial minorities. I think we could do more, but we will discuss that later.
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Reporter3:10
Chair Powell, in the middle of the pandemic, bank regulators have loosened capital requirements at the biggest banks. One of its changes for the capital rules, the Fed stated the rule was meant, and I quote, 'to allow banking organizations to expand their balance sheets as appropriate to continue to serve as financial intermediaries,' rather than to allow banking organizations to increase capital distributions. In other words, the Fed reduced capital standards so banks would lend more, not so they would pay dividends. But it's not what's happening. The biggest banks have gotten larger, they've gotten more profitable, but they haven't increased lending. Dividends, however, remain steady. My question is, Chair, you promised to the committee that you will not extend any exemptions for capital requirements for banks and bank holding companies that have continued to pay dividends rather than invest in the real economy.
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Jerome Powell4:03
So we're talking here really about the temporary measures we took with respect to the supplemental leverage ratio, and those expire at the end of March. We have not decided what to do there yet, and we're actually looking into that right now. I'm not going to commit to connecting that decision to the payment of dividends. As a separate matter, as you know, we intervened to require the banks to limit their dividend growth to zero and also to limit their share buybacks. The result is a banking system that has higher capital than it did going into the pandemic, particularly for the largest banks, and one where the banks have taken very large reserves against losses and so have proven themselves pretty resilient.
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Reporter4:57
Perhaps, but we also understand that they have not been supporting the real economy to the degree that we hope they would. We will continue that conversation, and I will send a written question to you on climate that we wanted to talk about. Shepard Smith here, thanks for watching CNBC on YouTube.