tv Key Capitol Hill Hearings CSPAN June 18, 2015 8:00am-10:01am EDT
weakness pashtun state we tested many of the countries from which foreign fighters are coming our countries at the very poor border security, very weak intelligence services to actually be able to track citizens and how they're moving. and this gets to the president west point speech basically his direction all of us the way to invest far more important capacity. ..
>> well, thank you and that is where it's gone before we were interrupted before. we've discussed at length some of the flaws of the structural issues with the u.n. security council. time and again we find there or the general assembly comprised more than half of the number states are not democratic and not necessarily right. the human rights council can be opinion which like-minded countries come together to push the envelope on norms and in the case of women's rights you remember back in 1993 the beijing conference on women
rights and human rights. the same shift as hell-bent on lgb team as her declarations have been made were revolutions that in extrajudicial killings against persecuted groups now managed to insert those killed on grounds of sexual orientation status. that is an example again of finding the institution where you can mobilize the vote and pushing the envelope. what we have now this month is the second report ever prepared by the high commissioner and the treatment of the norm. then you have accountability to the norm, how countries measure up, documented for the first time. people invisible in societies and persecuted now builds the
international community is watching and we have there back. >> i know my time is expired but if i submit a question and ask a red response to pride to be the cochair of the peacekeeping caucus which we recently formed along with my colleague adam can finger to discuss peacekeeping operations and impact on u.s. foreign policy and national security. if you could let us know what reforms are needed, what role the u.s. has played and what benefit to the international forces have two u.n. peacekeeping missions been successful. it would help guide the work of the new caucus and continue to be a supportive entity within the congress for the work of the u.n. i thank you again and yield back. >> we will go to florida and then pass to mr. ted deutch from
florida. >> i appreciate you being here. these are the conditions we're talking about syria and the ukraine and situations we see conflict and that the u.n. was created to prevent. over 200,000 killed in afghanistan, iraq north korea on and on. why has the u.n. not been more effective in presenting this? i read a report on the peacekeepers in haiti and over 220 examples of the peacekeepers trading phones and aid for sex. they are supposed to be promoted to see if this happens and over again. yet we do a study to study it and there's no end in sight. why are they not more effective?
>> that is a question i ask myself every day. day is also less part of the international systems. 193 countries, half of whom are not democratic or to some extent the organization will reflect this function of member states who comprise the organization on the issue of sexual abuse. of course justification is not one custom that would raise their hand anastas said that congressman smith earlier when a peacekeeper from a particular or state is found or alleged to have committed crimes against young people or women or men or boys, they go back to their home state and the only punishment exacted upon them is not getting to be part of the mission and carrying out the practices they were carrying out. the reason i started my response to you by saying the u.n. is the
sun that they have for other member states who comprise it that ultimately our ability to change those horrific practices and lack of accountability is going to turn on what will be achieved in the capital in strengthening institutions and ensure name the rule of law. if someone was accused of that they would face a european or american peacekeeper would go through a formal justice system. that is not what happens with the systems are underdeveloped. this is why investment in the institutions is very important but also why using our platform to denounce this, too never tolerate it and the one part of the u.n. that we fund which is the secretariat that on one hand gets instruction for members they and suffers from the same issue as described already that has autonomy.
for the secretary-general and you seem to be investigating abuses from a sending people home and calling on member states publicly that is what is required to investigate and build non-internal studies. nobody likes studies for their own sake. when a country is not prosecuted a person has violated a child is relied upon the individual for protection come you call that country out. >> i want to come back to that. i want to switch over to iran. the obama administration led multinational sanctions iran to bring men to negotiate the table on the iran nuke their agreement. what was the purpose of the negotiation? what were we trying to prevent? i thought was to bring into the negotiation table. what is in your mind what are
we trying to accomplish? >> we are trying to deny iran a pathway. >> that is what everybody says that we are beyond that because i've had expert over expert saying iran has enough material and henry kissinger said that. sure she'll been a retired general and we are beyond that. i don't see in good faith that we can support the agreement. he said president obama. do you have the expert tatian that a snapback would be good? why would we go forward and if we do find out it is more evident they have not held up to their end of the condition, do we really think we will put sanctions back in place with snap back?
>> first of all again there is no deal. we are still negotiating terms of the deal from some of the public commentary significant differences remain and we will not take a deal where we can come to the american people and say we've achieved the object. >> i'm out of time. redline is a can of nuclear weapons. >> the experts disagree with you. they have the capacity right now to have that. i think we are on the point prevented that instead of preparing for that which will be. thank you. >> we go now to mr. ted deutch of florida. >> thank you, mr. chairman. ambassador power come a thank you for being here and for giving all the members an opportunity to discuss these important issues with you. two final points of my remaining time.
first, you said earlier in response to a question about specifics of snapback that congress will be briefed if a deal is done. i would just make the request of you and the administration rather than waiting until the appeal is done that this is the time over the next couple weeks especially when it is so important for the administration to brief congress, to let us know what is happening so we are aware of what is happening. too, we can chime in and have the budget answer to most importantly say no one is surprised and it will be chopped up en masse on or after june 30th. that is the request. finally, i want to thank you for your efforts working with israeli ambassador to united
nations to put you got it the first general assembly on anti-semitism and i'm grateful for you allowed me to participate. some of the topics that day for the anti-israel bias in parts of the united nations. and this is the dead anti-semitism. the other points of anti-semitism in the recent months have manifested themselves to violence and deadly attacks in brussels and paris and copenhagen and elsewhere. my question is after that special session on anti-semitism when there was won six of the countries who participated, what has been done in order to move forward with some important discussions. how to help nations understand
anti-semitism in their countries isn't just an issue as it affects the jewish community that ultimately when there is hatred of anti-semitism in the jewish communities in the coal mine. if you could talk about what's happening. >> thank you congressman and thank you for coming to that session. back to your point on the iran deal in just a second. it was truly an historic session. when you think about what the general assembly has done historically in terms of revolution equating zionism and racism but also annually this last year with 18 anti-israel resolutions to be in that chamber was extremely important not only to the government of israel but for the united states in many countries that help shepherd the session forward. it wasn't easy. in terms of follow through, we have to be careful not to
confine discussions of anti-semitism. what we do at the humans rights council of the general assembly when we talk about other human rights challenges in the world, always coming back to anti-semitism documenting what has been done. we are still doing advocacy including anti-semitism envoy in capitals to get government to do what we've done to appoint a special envoy dedicated to the effort and someone plugged in in the center and not somebody to throw off to the side and keep marginalized from the mainstream of decision-making because it issues the prosecution education and community outreach and so forth central to this and require real political will from the top. a lot of outreach has been a capital and the united nations seeking to mainstream issue so
you don't get a clean bill of health and human rights when you're simultaneously encouraging anti-semitism. i know we're both out of time here but i would note what i really meant was fundamentally the deal is going to come back here. we have been briefing the deal at every turn and it specifically if members have not received adequate insight into how we look at that is what the range of options are. anyone of them them would achieve the shared object is which is to keep that within our authority. but again if there's any shortage of insight in terms of how we look at this that is something i'm eager to provide. the secretary would be as well. i absolutely take your point. we have sought to engage congress throughout the process.
paragraph more briefings on this issue than anywhere on planet earth. if there's more information to provide a be happy to do so in an open hearing maybe not ideal. >> i might take some exception of acid or period from the standpoint of congress we do not feel they perceive details on negotiations as you know but we have a conflict on that. mr. kirk clawson of florida. thank you for coming. thank you for your service to our country. it sounds to me sometimes after listening today, which i did both when i was in the room and when i was not that the rest of the rocket great deal here. the oil companies get to read great surpluses with us. we find their economies. the manufacturing outsourced countries of the world are a
great trade surplus with us. then they'll go to the u.n. and pound on us. they pound on israel. i heard earlier from congressman deutsch and others not object with respect to israel. not object with slavery and cuba. just overall not object to it. on top of all of that we get to pay for it. in nominal terms where 20% of the world's gdp but as i understand we pay 20% to the u.n. there's something wrong with the picture. it seems we are not using our money at the u.n. to create by rage and nor are we using market to create that page. so we find everyone else's economy and in the global economy we are the antigen and then we turned around and tolerate the kinds of things you are talking about today.
being mr. and mrs. nice guy doesn't seem to be working here. it feels from an economic day of people may understand leverage and therefore i'm not clear why we don't use our economic and monetary leverage at the u.n. and with respect to the global marketplace. am i missing something here in my synopsis? i'm sure you will tell me im. >> i would say a few things in response. i understand the frustration and one of the priorities we've had is to get more countries to pay their fair share. you have seen the last three to five years china's share of u.n. peacekeeping with the united states is the lead funder but it sure has gone up more than 50% and soon in the next round of negotiations you will see it go
up another 50% commensurate with the global economy and that is the distribution of resource provision we need to see if the u.n. ms people graduate from being underdeveloped countries they need to step up and take their share of the burden. that is something you can reassess. >> can i follow up on that point. with respect to china the american can ever be a wal-mart is funding the building up their military and economic prowess. do we ever talk about not only have been increased but they pay for it at the u.n. but do we want to use our marketplace to level things out here? >> just to stay to what i know best which is the place i work and how we engage concerns about the fact of the matter is we as a nation as we saw with ebola
crisis have an interest in global health security in part because of the globalized economy and goods and people are crossing borders the way they are. the notion we can take our marbles and go home and wish everybody the best doesn't get at the core national security linkages and human security linkages that exist in 2015. i would also note on peacekeeping where spirit asks another countries be stepping up more than what we are a major contribution it is not our forces going into south sudan had been on the bases and protecting civilians. it is not our forces by ieds and other things. we are taking advantage of the global system as well in order to ensure shared security are being controlled by individuals
other than american families because they've done more than our fair share over the last decade. the peacekeeping share that we pay even put to one side the troops and police are going to dangerous places. other countries pay 72% of the burden and if you look at nato, defense expenditures for europeans have not stepped up to allocate as much as gdp as they should be we are 80% of nato's defense expenditures. even though u.n. peacekeeping suffers from flaws described in president obama has launched an aggressive initiative to enhance accountability and ensure missions have better capabilities to protect civilians and prevent sexual abuse and so forth in terms of our interest and atrocities prevented, local academics stunned at the source,
radicalization prevented by virtue of having some stability, the rule of law advanced because other things we see which don't help american companies operate these environments. there are investments good for us and the united nations helps us make them but also force multiplier. it is still 72% on peacekeeping provided by others. our regular budget is 78% by others. >> thank you chairman worries and thank you ambassador power for your service of the leading applicant on rates. i will turn my questioning to internal politics in the u.n. and served throughout its history. but they look at the makeup of the u.n. security council it
does seem like it is time to revamp the membership of the u.n. security council certainly to the g4 companies. and yet brazil, japan and germany. if we take india specifically soon to be the most populous nation on the planet, one of the fastest growing economies certainly a critical ally of the united states in my understanding is president obama has publicly stated he would be supportive of including india as a permanent member of the u.n. security council. can you get a sense of how this hottie working with the administration might be able to work within the structure of the united nations to move forward including more nations as permanent members and recognize the world we are written in the 21st century.
>> it's an excellent question and because it's the 70th anniversary of the question many counterparts around the world are asking mr. specifically. there is no question when you have a body whose permanent membership hasn't changed in 70 years, people on the outside ask for the alignment of power and influence in 2015 minutes hard to say it's a perfect celebration. the challenge by almost everybody is supportive of the reform in the abstract there are huge and quite bitter divisions within the u.n. membership about just who could get -- what india has to support the united states has made clear, president obama made clear on his trip to you can imagine the reform that would
include india. other countries throwing everything they have at preventing the outcome. so what is not happy is you seen one version that has gathered a majority of countries and even this year with more action on the issue, you haven't seen momentum gather around any reform scenario. the u.s. position is very clear. we can recognize the legitimacy challenges the current council poses particularly in terms of its permanent membership. we recognize the growth and influence of countries like india is one of the leading contributors to peacekeeping to do a huge amount and have a huge amount to offer as the world's largest democracy. but we also are very focused on effectiveness of the u.n. inefficiency is looking beyond
that case at how countries would likely perform on the security council. issues related to voting coincidence discussed earlier because of course we look for countries that share our pressure promoting human rights come to seem linkages between the humanitarian and human rights on the one security on the other. it is not clear this is going to move forward quickly. >> as these discussions take place in the u.n. debates how to expand the security council, are there things that this body congress could do that would be productive in helping move this along? >> i should have noted in order for security council reform to take hold, the congress would have to ratify any reform package. in the past of the size of the
council that is not changed the size of the council has not has to come before the congress. one thing that can be done is to actually pass imf reform because one of the things the emerging powers look to is the congress' ability to ensure to support measures that would ensure international institutions reflect 2015 measures of influence in good and economic influence as a synchronizer make decade or more ago and i was stuck here for some time and would be a very important show of our attention to the rise of these countries, to the need for their voices to be exercised and for the need for these countries to dedicate more resources to the cost. just if they want a reputation and authority who would like to see them contribute more to
everything from peacekeeping to development and humanitarian assistance, et cetera. >> thank you ambassador power. we thank you for being with us this morning and we thank you for returning and the brief interruption. i look forward to continuing to work with you on the pressing issues raised here today including the slight overhang the refugees on issues like peacekeeping reform and the ongoing crisis in syria and of course with you in the administration and the ever end sanction. the committee trust the administration will be in close touch with their families negotiations. we don't want to be surprised in the final agreement given the position congress has taken on this and especially the suggestion that the administration may be backing off its original demand
submitted to inspections of nuclear sites at any time. this is important to ss is the question of the lifting of sanctions not being on the front and as a bonus but instead over the long haul of what was supposed to be a 20 year agreement. we thank you again and see you soon in new york. thank you, mr. chairman. [inaudible conversations]
>> federal reserve chair sat three says the fed will raise interest rates now. she made remarks following the open market committee meeting. that share janet yellen talked about greece and the global economy at the one-hour news briefing. >> good afternoon. today the federal open market committee reaffirmed the current theory to quarter% target range to the federal funds rate. since the committee last met in april the case of job gains has picked up a nickel market conditions have improved somewhat further. inflation has continued to rise below are objectives that the downward pressure resulting from earlier sharp declines in energy
prices is debated. the committee continues to charge that the first increase in the federal funds rate will be approved. when investing further improvement in the labor market and reasonably moved back to the 2% in the medium term. at our meeting today the committee concluded that these conditions have not yet been achieved. it remains the case that the committee will determine the timing of the initial increase in the federal funds rate on a meeting by meeting basis depending on its assessment of incoming economic information in this implication to the economic outlook. let me emphasize the importance of the initial increase should not be overstated. the stance of monetary policy will likely remain highly
accommodative for quite some time after the initial increase in the federal funds rate in order to support continued process towards object is with maximum employment and 2% inflation. i will come back to today's policy decision in a few moments but first i would like to review recent economic developments in outlook. the u.s. economy hit a soft patch earlier this year. real gross domestic product has changed little in the first quarter. both in household spending slowed business fixed investment is down amid exports for very substantial drag on growth. part of the weakness was likely the result to transitory factors. despite the soft first quarter the fundamentals underlying household spending appear favorable and consumer sentiment remains solid.
looking ahead the committee still expects moderate pace of gdp growth was continuing job gains and lower energy prices supporting household spending. the labor market so far this year has shown further progress towards object is of maximum employment although at a slower pace than late last year. over the past three months, job gains have averaged 210,000 per month down from an average pace of 280,000 per month over the second half of last year is still well above the pace consistent with the trains labor force growth. although the employment rate of 5.5% in may was unchanged from the latest reading available at the time of prayer meeting the labor force participation rate
with employment that includes individuals who want and are available to work but have not actively searched recently and people working part time but would rather work full time has continued to improve. but it seems likely that some sick of weakness in the labor market remains. participation remains below most estimates of its underlying trend involuntary part-time employment and wage growth remains realistically subdued. so although progress clearly has been achieved, room for further improvement remains. inflation has continued to run below are the longer event object to in part reflecting lower energy prices.
for prices have also restrained inflation. however, energy prices appear to stabilize reasonably. my colleagues and i continue to expect the effect of transitory fact is dissipate and the labor market improves further inflation will gradually move back further to present objectives over the medium term. market-based measures of inflation remained low though they've risen some from earlier this year. survey-based measures of longer term have remained stable. the committee will continue to monitor inflation developments carefully. this assessment of the outlook is reflected in the individual economic reductions submitted by participants. as always, each participant is conditioned on his or her own view of appropriate monitoring
policy. for economic growth, participants reduced projections for this year in line with the disappointing data for the first quarter. the central tendency of the growth projections for 2015 is now 1.8% to 2% down a little more than one half percentage point from the march projections. the central tendency rises to 2.4% to 2.7% next year, someone above estimates of the longer run growth rate. the unemployment projections for this year are a little higher than march. at the end of this year the unemployment rate stands at 5.2% to 5.3%, a bit above participant estimates of normal unemployment rate.
committee participants generally see the rate decline in the little further over the course of 26 t. 92017. finally, fomc participants project inflation to be quiet so this year largely reflecting lower energy and non-energy import prices. the central tendency of the inflation projections for this year is below 1%, unchanged since march. as a transitory factors holding down inflation the central tendency rises to 1.6% to 1.9% next year and 1.9% to 2.10% and 2016. returning to monetary policy committee reaffirms the current target range in the federal funds rate remains appropriate. as we sat in our statement, a
decision to raise the target range will depend on our assessment to realize than expected progress towards our object is the maximum employment in 2% inflation. we continue to base the assessment on the wide range of information including measures of labor market conditions indicators of inflation pressures and inflation expert patient and ratings on financial international development. we continue to anticipate it would be appropriate to raise the target range when the committee is seeking further improvement in the labor market and is reasonably confident that inflation will move back to the objective over the medium term. on both of these fronts as i noted, we have seen progress. even so the committee judged economic conditions do not yet
boarded the increase in the federal funds rate. while the committee is used to disappointing economic performance, the first quarter as large a transitory. my colleagues and i would like to see more decisive evidence a moderate pace of economic growth be sustained so conditions in the labor market will continue to improve and will move back to%. once we begin to remove accommodation, we expect as we say in our statement even after employment and inflation are near mandate consistent levels, economic conditions may sometime war and the federal funds rate below levels the committee is used as normal in the longer run. in other words economic conditions are currently anticipated to evolve in a
manner that will want only gradual increases in the federal funds rate. compared with projections in march, most fomc participants lowered somewhat their paths to the federal funds rate consistent with revisions made any projections for gdp growth in the unemployment rate. the median projection to the federal fun continues to point to the first increase later this year. with the rate rising to one and three quarters% in 2016. in 2016 and 2017, the media and pass is about one quarter percentage point above the projection in march. the median projection rate for 2017 remains below most fomc
participate in as the longer run value of the federal funds rate even though the central tendency of the unemployment rate by that time is slightly below its estimated longer run value and the central tendency for inflation is close to 2% object is. participants provided a number of explanation does the federal funds rate running below its longer run level at that time. these included in particular residual effects of the financial crisis which are likely to continue to constrain spending and credit availability for some time. i would like to emphasize the forecast of the appropriate path of the federal funds rate a conditional on participants in the visual projections of the most likely outcomes for
economic growth employment inflation another fact tours. our actual policy decisions over time depend on evolving economic conditions. accordingly if the expansion priest to be more vigorous than currently anticipated, and inflation was higher than dead and the appropriate path would like to follow is deeper and higher jury. conversely if conditions would approve weaker, the appropriate trajectory would be lower and less steep. finally the committee will continue its policy of reinvesting proceeds from treasury securities and principal payments from agencies that and mortgage-backed securities. the committee sizable holdings of longer-term securities should help maintain and accommodate financial conditions and promote further progress toward subject
is. i won't be happy to take your questions. >> high, from the "washington post" spent almost all of the fomc participants believed the rate hike will come this year. two of your colleagues believe 2016 as the appropriate time. the imf has called on 2016 is the appropriate time as well and market it has a greater probability of january than they do in september. dwight is wrong and why is waiting till 2016 in the state? >> well, there're obviously a a range of opinions both in the market and among committee
members. at this time on what the approach or a stand as likely to be later this year and next year. importantly what people write down their thoughts in the fec, they make forecast about what data is likely to show. the participants will also be unfolding data. both of us the appropriate policy decisions is going to meet data dependent and all of us will be looking at incoming data and our opinions about the appropriate timing of normalization are likely to shift us how we look at how the data evolves. differences in the appropriate
assessment of the appropriate stance of policy in addition to reflecting different views in the outlook there are a set of risk that all of us need to weigh in judging the appropriate time at the beginning of normalization. on one hand we begin normalization with wrist significantly overshooting and given the lax of monetary policy and on the other hand beginning but to railing of recovery that would avert for a very long time to achieve and so we are trying to assess the risks. i want to emphasize sometimes too much attention is placed on the timing on the increase in the federal fun.
what should matter is the entire jury and while our actual policy decision will has to all and what is happening in the economy the committee can see projections currently anticipated conditions will evolve in the economy and the manners that make it appropriate to raise the federal funds rate gradually over time. >> madam chair, i wonder if you might characterize the progress made. are you somewhat more confident not confident at all moving towards 2%. has there been a lot of improvement, some improvement in how should the judge those two criteria have been fulfilled?
>> the judge meant that the committee will have to make as i said previously and in the statement but depend on a wide range of data and not on any simple indicators. i can provide you a roadmap to take something as simple as the unemployment rate declines in the labor market arrested again to raise policy. we have to look at the pace of job creation. we have to look at what is happening to labor force participation to part-time employment for economic reasons to job openings to wage inflation and other indicators of the state of the labor market. i did say we agreed labor market
and the interim meeting. clearly over a longer span of time over the past several years obviously we've made considerable progress in moving towards our goal of maximum employment. in spite of the fact there is progress on that front and see some further progress for feeling bad about raise rates of inflation. again, there has been some progress in the sense energy prices appear to have stabilized. inflation is going to overall inflation is likely to run any of those bubble for a substantial period of time. the big declines in energy prices thursday in the last year and the beginning of this year and they will not wash out the
inflation data late this year. the fact energy prices have stabilized means the pressure from the source is diminishing. in addition the dollar appears to have largely stabilized and with respect to core inflation has been running under a 2% object to but declining import prices have been reducing that pressure. i believe that the labor market continues to improve and as our confidence in the forecast rises, at least for me my confidence also rise in inflation will move back. i expect that to overtime put up the pressure for inflation. >> thank you.
two questions if i may. i wanted to ask you about a comment made recently that in retrospect interest rates more aggressively during the 2004 2006 cycle. i wonder if you agree with whether there's any lessons from the 2004-2006 cycle today. relating to congress they pass measures like an audit of the fed bill or a measure to subject the policy rule. i wonder if there's anything that you can set more broadly and whether there's anything you can point to the congress can do to make the fed more fact than more accountable institution. >> on the first question you asked about the 24292,006 cycle. the cycle. the rapid. the fed indicated rates would
rise at a measured pace and that turned out to be i believe senate team meetings with 25 cases point increases at each meeting. as i've emphasized previously we have absolutely do not expect to follow in a mechanical 25 basis points every other meeting. no plan to follow when a type of mechanical approach to raising the federal funds rate. we will die the way incoming conditions and move in the manner we regard as appropriate. so that is one lesson. conceivably with the benefit of hindsight it might even be better to raise rates more rapidly during the 2042 mac 2006
cycle. i am not certain of the judgment but i think there is a case to be made. you asked about the shelbyville. the shelbyville has a title and a title in it that addresses a number of issues pertaining to the fad. i suppose i ask what exactly is the problem. we place high priority on being unaccountable and transparent central bank and if you compare it to transparency of monetary policy decision in the federal reserve with other central banks, we are one of the most transparent central banks in terms of the information we provide to the public in a whole variety of ways.
to my mind the fed is accountable and we work well as an institution. i'm not certain certain what the problem is that needs to be addressed. >> dan fleming from the central times. first question is also referencing the bill that has to do with the balance sheet entitling monetary policy. she suggested the ray should be hiked some way the balance before the fed continues reinvestment. could you give a little more clarity on how the fed intends to approach the issue of ending reinvestment on its balance sheet. the gc any argument for the reinvestment to smooth the profile in the portfolio. the second question is on the point of gradual.
you use the term today is a term gradual on its way to be way to beat guidance and is this something we should expect to see popping up in official fomc statements in the future? thanks. >> let me start with the balance sheet reinvestment policy issued normalization statement with visible as a normalizing policy and what we said at that time is we expect it to reduce reinvestment that sometime after we hit the departments of normalizing policy by raising our target to the federal funds rate. we said the timing of that would depend on economic and financial conditions in the committee has really not made any further
decision about how it is going to go about doing that. president leo was expressing his own purse of point of view and the committee has not yet decided and i can't provide any further detail but it is something we will piece again about. you asked about gradual. in this sense we already have a statement, the last paragraph of the federal open market committee statement says that committee currently anticipates even after employment inflation are near me and a consistent levels economic conditions may for some time keep the target federal funds rate below levels that committee views as normal in the longer run.
that is kind of a mouthful. it is a long sentence, but the spirit of the sentences consistent with my use of the word gradual and it is consistent with what you see in the summary of economic rejections. participants are project team obviously a lot of uncertainty. but they are projecting increases that average around 100 basis points per year. that is not a promise that is conditional on the economic forecast and the forecast may prove to be wrong and may change. at this time the assessment participants had of the economy suggest to them that the appropriate pace of normalization to keep the economy on track to meet our object is will be gradually met.
>> peter glom with television. giving your discussion with the collared the state of the economy in the improvements you've seen, do you think it is like we will see a rate increase this year? to follow on that the comments from the imf this month and the encouragement you've got to raise rates until next year specifically said your colleague madam will guard mentioned the risk that there is a concern a rate hike at trivia financial stability consequences well beyond u.s. borders. how do you respond to those concerns and international contacts to your decision-making and was it appropriate make the specific recommendations? >> okay first question was about a rate increase this year.
again, the committee tries to give an indication and a summary of economic projection about how economic conditions will unfold and what the appropriate policy will be given in light of those expectations and clearly most participants are anticipating that a rate increase this year will be appropriate. that assumes as you can see they are expect in a pickup in growth in the second half of this year and further improvement in labor at conditions. we will be making decisions however to depend on the actual data as we see in the months ahead.
certainly, we could see data in the months ahead that will justify the expectations you see on the.pot. -- plot. no decision has been made about the timing of an increase. you will depend on unfolding data in the months ahead. certainly in increases possible with data that would justify that. in terms of the imf guidance, i believe the imf plays a useful role by undertaking a review said the economic policies of all of its members. obviously there is a reach of opinion among outside observers said market participants as well as the mob the committee's participation as you can see
that would call for a gradual evolution of the fed funds rate towards normalization. with respected international spillovers, this is something that we have been long attended you. obviously, we have to put in place a policy that is appropriate to revolving conditions in the u.s. economy, but we can't promise that it will not be volatility when we make a decision to raise rates. what we can do is to do our very best to communicate clearly about our policy and our expectations to avoid any type of needless misunderstanding of our policy that could create volatility in the market and potential spillovers as well to emerging markets. and i have been trying to do that now for some time.
i've been doing my best to make good on that pledge. >> martic retsina with "the associated press." you just talked about the fact that you can't promise there won't be volatility in the markets. there seem to be two schools of thought. one is that the fed learn from the mistakes made in the 2013 with the taper tantrum and that you will telegraph is so while the that will limit it. the more pessimistic school of thought seems to be that when you do start raising rates they been low for so long that it's going to make the taper tantrum seem mild by comparison. but which camp are you falling in love? >> i think our experience suggests that it's hard to have great confidence in predicting what the market reaction will be to fed decisions and there have been surprises in the past. i don't think the committee
anticipated that its decision would cause the taper tantrum. and all i can say is that uncertainty in the markets at this point about long-term rates doesn't appear to be unusually high. and we can only do what is in our power to attempt to minimize needless volatility that could have repercussions for other countries or for financial stability more generally. and that is to attempt to communicate as clearly as we can about our policy decisions, what people depend on and what we are looking at. we will be responding to incoming data. we have tried to make that clear. and i think it's clear that the market is also responding to incoming data, and you can see that in daily market reactions
to surprises in the economic data. and, of course none of us can quite forecast what incoming data will be. >> your latest economic projections so that you expect the unemployment rate by many officials expect unemployment rate to fall more slowly this year and then to fall by applications more quickly next year. could you talk about what has changed in your assessment of the labor market and how that impacts policy? >> so we are productivity growth is a factor that affects the pace of improvement in the labor market. productivity growth has been extremely slow for the last couple of years. and i think in part the pace of improvement in the labor market
that we are projecting reflect the notion that there's likely to be some pickup in the pace of productivity growth. obviously, that's something that's quite uncertain, and it's conceivable that if productivity growth disappoints something that hopefully will not see because that is very negative implications for living standards, we could conceivably see faster improvement in the labor market. but in addition, there are other margins of slack that don't show up in the unemployment rate, labor force participation that has, at least appears to be depressed, at least to some extent because of cyclical weakness. the fact that labor force participation rate has remained roughly stable for the last year or so when there's an underlying downward trend suggests that some slack is being taken up by
in a sense improved or diminished cyclical impact on labor force participation. i expect that to continue and i would expect also to see some improvement in the degree of part-time employment that's for economic reasons. >> jonathan spies with reuters. to your point, madam chair come on needing more decisive evidence in order to initiate the first rate hike. how close do you feel the economy is to full capacity now? and given that employer costs and monthly wages are at a pace that is at a six-year high now what is the risk how is the risk changed and that inflation could strengthen quicker than you were expecting? >> so the committee estimates
that the longer run normal level of the unemployment rate is 5.0-5.2. at 5.5% we haven't unemployment rate that still exceeds the committee's best attempts to estimate what is normal unemployment rate to this economy. and as i mentioned, there appear to be unusually large elements of slack over and above that in the form of somewhat stilted press labor force participation in part-time work for economic reasons. so i think it's fair to say that most members, most participants in the committee wouldn't judge yet, although some might, but most wouldn't judge us to be at quote maximum employment.
wage increases are still running at a low level but there have been some tentative signs that wage growth is picking up. we are seeing an increase in the growth rate of the employment cost and a mild uptick in the growth of average hourly earnings. i would call these tentative signs of stronger wage growth. i think it's not yet definitive but it is a hopeful sign. still, however inflation not only headlines, but stripping out food and energy, underlying inflation, core inflation is still running below the committee's objective. so i think we need to see additional strength in the labor market and the economy moving somewhat closer to capacity. the output gap shrinking in order to have confidence that inflation will move back up to
2%. but we have made some progress. >> thank you. greg robb from marketwatch. apply to you turn your attention to the housing market for questions. both rents the rams and house prices have been rising rapidly recently, squeezing americans on both sides. how comfortable are you with this and does it impact monetary policy? >> well, i mean, the house the increase in house prices is restoring wealth of many households who have that as their major asset. it is an important part of a wealth of american household american household sector. and for all of the household who were underwater, those house
price increases are improving their financial condition. although of course at the same time it's making housing less affordable for those who look to buy. at the same time housing over all, given the low levels of mortgage rates, remains quite affordable. i think credit availability remains quite constrained or mortgages. anyone who doesn't have pristine credit rating is find it very difficult at this point to qualify for a mortgage. and i think we are seeing quite a bit of reluctance given the job market and given with a history of what's happened to house prices of young people who want to buy homes. we've seen them delay marriage and wanting to have the
flexibility to move. so the demand for multifamily housing to rent is very high and rent prices are moving up i think because of that. >> hello. jeremy with -- [inaudible] as you know there's a growing gridlock increase and it is getting everybody more likely. how concerned are you by these developments? the field that could impact the global and u.s. economy? and could influence in any way when you will decide increase the interest rates? >> well, unfortunately greece and its creditors are faced with very difficult and consequential decisions at this point and in the days ahead. and my hope is that they will continue to work together to try to find a solution to the
current difficulties and invest. obviously, european leaders place great value on preserving european monetary economic and political integration, and the greek people have made clear that it's important to them to remain in the euro area. so this is a very difficult situation. in the event that there is not agreement, i do see the potential for disruptions that could affect the european economic outlook and global financial markets. i would say that the united states has very limited direct exposure to greece either through trade and financial -- or financial channels, but to the extent that they are impacts on their euro area economy or on global financial markets they
would undoubtedly be spillovers to the united states that would affect our outlook as well. >> thank you. chris connor from "bloomberg news." madam chair, i'd like to come back to the topic of consumer spending. consumer spending has been very disappointing for many months in the u.s. economy. i'm wondering, do you think there has been a meaningful shift and one that will persist in the behavior of households with respect to spending and savings? or would you be more inclined to look at the recent more encouraging retail sales figures and see perhaps the return of the american consumer there? >> so in recent weeks we've seen data that suggest that consumer spending is growing at a
moderate pace. i'd say, you know car sales, for example, were very strong, part of it probably represents a back for weak sales during the winter months. but nevertheless the pace of car sales has been strong, and recent readings on retail sales and on spending on services have suggested an improvement in the pace of consumer spending. there are questions at this point about just how much impact we have seen of lower energy prices on consumer spending. the decline in oil prices translates into improvement in household income on average have something like $700 per household.
and i'm not convinced yet by the data that we have seen the kinds of response to that that i would ultimately expected and i think it's hard to know at this point whether or not that reflects a very cautious consumer that is eager to add to savings and to work down borrowing, or impart some survey evidence suggests that consumers are not yet confident that the improvement they have seen the decline in their need to spend for energy, for gasoline that that's going to b
think a lot of savers, people fixed incomes are hopeful that they would to a rate increase if not this meeting soon. what kind of assurances can you give them any people out there who think the fed is never going to raise rates? i got some e-mails today from people saying they're never going to raise rates. what kind of assurance can keep the people who are waiting for that to happen? >> i can't get an ironclad promise, but i think it's clear from our summary of economic projections that we anticipate growth -- and suspect that the economy will grow, that the labor market will improve that inflation will move back up to 2% is our objective over the medium term and if economic
conditions unfold in a way that most of my colleagues and i anticipate, we see it as appropriate to raise rates. and as you can see the largest number of participants anticipate that those conditions should be in place later this year. obviously, we have there could be surprises that may not happen, it's not an ironclad guarantee, but we anticipate that that's something that will be appropriate later this year. >> mica derby with -- mike derby with dow jones news service the can you shed some additional light on how large reverse repo operation unlikely to be in the initial phase? additional heliport our financial conditions to the pace of the fed's tightening cycle? how important is the market's reaction in determining how fast or slow and the ultimate endpoint of a fed tightening cycle? >> so with respect to you ask
first about overnight reverse repos. and we communicated in our minutes that the committee has an intention to make sure that they are available, overnight repos are available in large quantity at liftoff to ensure that we have a smooth the liftoff. that there will be an elevated level of provision of overnight our rp. however, it is our expectation and plan that fairly quickly after lift off we reduce the level of the overgaard -- overnight rrp facility and we have a variety of ways in which we can do that. with respect to market reactions, we always come in evaluate the economic outlook
have to take account of financial conditions, whether it's at the level of long-term interest rates or the value of the dollar in assessing the economic outlook, to the extent that the art market reactions and market movements whether they are in reaction to decisions of hours or in reaction to other events, foreign events are unfolding economic conditions, we will always take this into account in deciding on the appropriate path of policy. >> steve beckner of mmi madam chair, good to see. you mentioned that the dollar has stabilized and, in fact
since mid-march i believe it's giving up a good bit of its gains from last summer. to what extent now do you think that will be an ongoing drag from the dollar, taking into account the dollar retreated? and overall how important is the dollar exchange rate and monetary policy these days relative to the past? >> well, i think we still are since last summer, have seen an appreciable increase in the valley of the dollar vis-à-vis most of our trading partners am including emerging markets. so it is a significant appreciation of the dollar. and i think we have seen that it is had a negative effect on net exports, and so serve as something of a drag on the economy, and probably that drag is going to continue for some time to come.
so it is a factor affecting the outlook. in addition, import prices for non-oil imports continue to fall, and i think that's serving to push down core inflation a little bit. eventually i expect that impact to ebb. but it is a factor affecting the outlook. that said we obviously have no target for the dollar. we take movements in the dollar at its economic impact is one of many factors affecting the outlook. and despite the appreciation of the dollar the committee obviously thinks that the economy is likely to do well enough to call, likely call for some tightening later this year. >> john from american banker i'd
like to ask a record to a question if i could. last month senator elizabeth were and congressman elijah cummings sent a letter to the doh -- asking that an inquiry into the fed and other regulators of implementation of the community reinvestment act. and something that c.a.r. eight as it is implemented now is not giving blighted communities like in baltimore, other places enough access to basic banking services. dodo you think that the fed is doing everything it can in its invitation to get access to those communities to to these kind of services? do you think it needs to be doing more? >> so we take it very seriously and evaluate for those banks that we supervise. we have a set of guidelines and are very conscientious in attempting to evaluate
performance but it's something that we certainly take into account in assessing applications that we receive for mergers and we have very active programs to try to bring together community groups with banking organizations to try to provide them with information about how they can assess community needs and best address them. but we are looking at it and continued to look to see whether there are ways in which invocation could be improved. >> thank you very much. [inaudible conversations] >> live now to the senate floor on this thursday where lawmakers
will be spending a 10th day working on the 2016 -- and provides up to six or $12 billion for the pentagon and they finish consideration of all eminence, final passage is likely at some point today. andand out lie to the floor of the u.s. senate here on c-span2. -- and now live to the floor of the u.s. senate here on c-span2. the president pro tempore: the senate will come to order. the chaplain dr. barry black will lead the senate in prayer. the chaplain: let us pray. eternal god, you are perfect in wisdom and goodness. thank you for the great and mysterious opportunities of our lives. empower our senators
to seize these opportunities thereby fulfilling your purposes for their lives in this generation. may your spirit guide them in their thoughts, words and deeds, providing them with the wisdom they need to navigate through life's turbulent seas. keep their thoughts pure their words truthful and their actions trustworthy, giving them consciences void of offense toward you or humanity. inspire them to be mindful of their eternal destiny and their accountability to you.
use them today as instruments for your glory. and lord, comfort the families and loved ones of the victims of the charleston, south carolina church shooting. we pray in your merciful name. amen. the president pro tempore: please join me in reciting the pledge of allegiance to our flag. i pledge allegiance to the flag of the united states of america and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all.
mr. reid: mr. president? the presiding officer: the democratic leader. mr. reid: i don't know another way to describe what i heard this morning in my morning briefing and then the news accounts of this sickening revelation of what took place in south carolina last night. think about this. the sanctity of a house of worship was violated as a gunman opened fire at a historically black emmanuel a.m.e. church in charleston, south carolina. we know now at least ten -- i'm
sorry -- at least nine people are dead. others, of course, hurt. i don't know how else to describe it. this individual was like a sheep in wolf's clothing. he sat among the congregation for a substantial amount of time before he pulled out a weapon and started firing at people. the thought of people who are in a house of worship being gunned down as they gathered to pray is heart wrenching devastateing and is the ultimate act of coward islamicice and hatred. as our good chaplain said, our hearts go out to the families and friends of the people who
were gunned down in that church. it's hard for me to comprehend anything so awful. so on behalf of the senate family we send our support our sympathy to the charleston law enforcement as they try to capture this murderer. i hope the perpetrator will be swiftly apprehended and brought to justice. mr. president, i had some remarks i was going to give, but they could be deemed partisan in nature, and i think i can give those at some other time. i don't feel it would be appropriate for me now to talk about things that are i feel kind of inappropriate today with this pall hanging over our country. so mr. president based upon
that i would ask that the chair announce the business of the day. the presiding officer: under the previous order the leadership time is reserved. the senate will be in a period of morning business for one hour with senators permitted to speak therein, with the time equally divided with the majority controlling the first half, the democrats controlling the final half. mr. reid: mr. president i would note the absence of a quorum. the presiding officer: the clerk will call the roll. quorum call:
a senator: mr. president? the presiding officer: the majority whip. mr. cornyn: i ask unanimous consent the quorum call be dispensed with. the presiding officer: without objection. mr. cornyn: mr. president typically i will come to the floor and talk about the business at hand before the senate but i think in light of the horrific news that we all woke up to this morning i want to just touch briefly on the tragic events that have unfolded overnight in charleston, south carolina. though we don't know all the facts, by all appearances the gunman targeted worshipers while
they were in church in a way that certainly shocks all of our conscious and sensibilities. and is the sort of act that i think we all find hard to understand and is truly unspeakable. but law enforcement is doing what it does best, which is conducting its investigation including looking for the suspect, and i think it's appropriate that we all offer our thoughts and perhaps a private prayer for all of those who were affected by this senseless and horrific tragedy. obviously, the senate has got some important business to do and i'll come back later and talk more specifically about the defense authorization bill in the -- and the next business we have in line which is to make sure that our troops get paid and that we provide them the resources that they are -- that they so justly deserve and are entitled to.