At a Senate Banking Committee hearing on Wednesday, Sen. Katie Britt (R-AL) asked Chair of the Federal Reserve Jerome Powell about efforts to reduce the cost of childcare.
00:12Thank you very much, Madam Vice-Chair. Chair Powell, thank you for being here with us today.
00:18I want to start just by echoing the comments of Senator Cortez Masto when it comes to community banks.
00:24I obviously believe that community banks and credit unions, financial institutions that serve everyday Americans and main streets across the great state of Alabama and our country are so critically important to people being able to actually achieve the American dream.
00:40And I want to make sure, I know we've talked about this the last few times that you've been in front of us, we've talked about the rewrite of Basel III, we've talked about long-term debt, we've talked about Reg II, we've talked about a ton of things,
00:50and talked about my concern that no one was looking at the cumulative impact of those things and the trickle-down effect.
00:56I just want to get a commitment from you that as you are reviewing rulemaking across the board that you will consider and make sure to make the perspective of the smallest U.S. banks and non-financial industries,
01:08like the ag sector, who did not maybe have a seat at the table in previous administrations, but give them a seat at the table and make sure that you're thinking about the impact on those individuals and the people they serve.
01:19I'm happy to make that commitment.
01:21Thank you so much, Chair Powell.
01:23I also want to talk to you about an issue that has been brought up briefly today by another colleague of mine, but that is about childcare.
01:31So when we look at the childcare crisis in this country, we know that our economy loses about $122 billion a year because of affordability and accessibility, reliability, if you will, of childcare.
01:44It is said that anyone who has a child between ages zero and five actually spends 22% of their income on childcare.
01:53We have done the studies and looked at the numbers and 59% of stay-at-home and or part-time working parents say that they would like to re-enter the workforce,
02:03but that affordability or accessibility is an impediment to do that.
02:07As we are looking to build back America, as we are looking to create opportunity and bring those things into fruition,
02:14would you agree that taking a look and being able to address, not asking you to comment on any specific proposal,
02:21but addressing some of the shortfalls related to accessibility and affordability of childcare would have a positive long-term impact on the economy?
02:30So I think there's quite a bit of research showing exactly that, and we really saw it during the pandemic.
02:35As I think you know and pointed out, it's not a role, it's not an issue that we play a role on,
02:41but clearly it would contribute, childcare would contribute to participation in the labor force by many.
02:49Absolutely, and as Alabama looks, we look at our labor participation rate.
02:53It is five points lower than the national average.
02:55We continue to look to ways to get people re-engaged in the workforce and know that addressing this head-on will help us be able to achieve that.
03:02So thank you so much, Chair Powell.
03:04I look forward to continuing to work to get that done.
03:08So there has been some angst vocalized about the reconciliation bill and the president's trade policies,
03:15and from my perspective, much of that skepticism is both unfair and premature.
03:20Market resiliency and recent economic data actually continues to reflect confidence in the U.S. economy.
03:28Look at the recent Treasury auction, which was notably successful and saw stronger-than-expected demands for 30-year bonds,
03:35and stable, even slightly declining yields.
03:38To me, this demonstrates that investors still view the U.S. debt as an attractive asset,
03:44regardless of the ongoing policy discussions and debates and forging a pathway forward.
03:50And those fundamentals of the economy, you know, actually remain quite strong.
03:54Chair Powell, would you agree that the components of our economy actually remain quite strong?
03:59And how does the Fed consider this type of strong auction performance in the context of your market expectations and monetary policy discussions?
04:10As you point out, the Treasury market is working fine just now.
04:14Liquidity is adequate and, you know, bond prices are responding to economic events,
04:19and so bond market's in good shape.
04:22In terms of the strength of the economy, I would strongly agree.
04:25The labor market's in a solid place.
04:28The economy's growing.
04:30Inflation is in a pretty good place, come much closer to 2%.
04:35So it's still a very solid economy.
04:37We are watching the labor market very closely, as we always do.
04:40And a couple of things in particular.
04:43One is just a very low hiring rate, which goes with a low layoff rate.
04:48But if we were to start to see layoffs, we would see unemployment go up quickly.
04:52And so we're watching that carefully.
04:55But really, the labor market has remained solid.
04:58And I would agree with your overall characterization.
