Steve Daines: The Biden-Admin ‘Will Waste No Time Attempting To Sell A Fairy Tale’

  • 2 months ago
Before a Congressional Recess, Sen. Steve Daines (R-MT) questioned Federal Reserve Chair Jerome Powell on inflation rates during a Senate Banking Committee hearing.

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00:00Chairman Powell, thanks for being here today.
00:03Certainly, it's not lost on anybody here,
00:04election season's in full swing.
00:07And so from now until election day,
00:10my Democratic colleagues in Congress,
00:11as well as the Biden-Harris administration
00:14will waste no time attempting to sell a fairy tale
00:17to the American people that financially and economically,
00:22they're better off now than they were almost four years ago.
00:27When President Biden took office,
00:29inflation was at 1.4%.
00:32His failed policies drove us to the highest inflation
00:35we've seen in 40 years.
00:37I can tell you the folks back home in Montana aren't fooled
00:41because in every part of their lives,
00:43inflation is not some kind of hypothetical.
00:47They see the everyday impacts
00:49of the decades high inflation brought on by the policies
00:54of the Biden administration
00:55and facilitated by congressional Democrats.
00:58The cost of most goods and services across the economy
01:02are more expensive than they were in 2020.
01:05And that is a fact that no amount of political spin
01:08or mental gymnastics can make go away.
01:11Here's just a couple of examples.
01:13Breakfast cereal, prices have increased 28%
01:16since January of 2020.
01:18Gas prices increased 36% from a national average
01:22of $2.63 a gallon to $3.58, $3.58 per gallon.
01:27Egg prices, egg prices have jumped $3 per dozen in 2024,
01:32double the cost of a buck 45 in February of 2020.
01:37And this dishonesty doesn't stop with inflation.
01:41On the labor market,
01:43while President Biden and Senate Democrats
01:45are celebrating a victory lap
01:47in light of the recent jobs report
01:50showing a 206,000 new jobs last month,
01:55they're willfully ignoring the fact
01:57that more than a third of these job gains
01:59came from the government sector.
02:02Mr. Chairman, I commend you
02:05for the job you have done thus far
02:07in trying to rein in inflation.
02:09I encourage you to continue the fight
02:12despite the political pressures you may face.
02:15I'm also encouraged by the comments
02:17you made earlier this month
02:19about the dire need for Washington
02:21to address its fiscal imbalance.
02:24I couldn't agree more.
02:27I've said many times and continue to believe
02:29that Washington's culture of reckless spending,
02:32of excessive borrowing is leading us down
02:34a very dangerous path by leaving future generations
02:38with mountains of debt.
02:40And I'm happy to hear you agree with that assessment.
02:44Mr. Chairman, given that it's an election year,
02:46you're undoubtedly facing immense political pressure
02:49to lower rates.
02:51Thus far, you've done an admirable job
02:54in using the tools at your disposal
02:56to fight inflation and I urge you to continue
02:59to be led by data and not calendars or political influence.
03:04You said as recently as last week
03:05that while things are trending in the right direction,
03:08you would need to see further evidence
03:10before cutting rates.
03:13So here's my question, Mr. Chairman.
03:15What specifically are you looking at and looking for
03:19as we head into the next FOMC meeting
03:21and how do you factor in this recent labor data
03:25and certainly the significant part
03:27of that being government jobs?
03:29So we're looking for two things, really.
03:31One is just more good inflation data
03:33and we had quite a lot of good inflation data
03:35the last seven months of last year.
03:37Then we had kind of a bump in inflation
03:39in the first quarter and now we've had one good
03:42and one very good inflation reading
03:44and we need more good data so that we can be confident
03:47that what we're seeing is really,
03:49that's where inflation's going,
03:50that it's going back down toward 2%.
03:52We don't need to see it at 2%.
03:53Right now we're at 2.6% so that's on inflation.
03:58On the labor market, to your question,
04:02we've seen that the labor market
04:04has cooled really significantly
04:08across so many measures and a number of people here today
04:11have pointed them out
04:12and the unemployment rate has moved up.
04:14You see a labor market that is now pretty much in balance,
04:17pretty much where it was in 2019.
04:19It's not a source of broad inflationary pressures
04:22for the economy now but it's still a strong labor market.
04:264.1% unemployment is a very good
04:29and historically low unemployment rate.
04:31So we have a mandate to support maximum employment
04:34and we also are paying close attention
04:36and if we see that the labor market
04:38were weakening unexpectedly,
04:40which is to say more than what we've seen
04:43in a material way, unexpectedly,
04:46then we could also respond to that
04:48because we have a dual mandate
04:50and we now see the two mandates
04:52as more in balance than they were.
04:55A year ago, really, the focus had to be
04:57and was on inflation.
04:58Now we need to be focusing on both goals.
05:02Chairman, thank you.
05:02I wanna get one question on Basel III and then we will.
05:06In March, this committee agreed
05:08that it was seriously flawed
05:10and need to be completely rewritten.
05:12I was encouraged to see reports last month
05:15that the Federal Reserve had provided
05:16other financial regulations,
05:18possible changes to the proposal.
05:21My question is I continue to believe
05:23the proposal should be scrapped altogether,
05:25but could you share what changes you're planning to make
05:28and the status of the ongoing development
05:30of the updated proposal?
05:32So we've had extensive discussions
05:34led by Vice Chair for Supervision Barr
05:36with the FDIC and the OCC.
05:38We've made a lot of progress
05:39in getting close to an agreement
05:41on a set of proposed changes.
05:43The work that remains is to agree on a process forward,
05:48how we're gonna move forward.
05:49It is our view institutionally
05:52that we need to put the changes out for comment
05:55for some period of time
05:57so that the public,
05:59all members of the public who wanna comment
06:00can see them again and comment on them again
06:03and see them in the context
06:04of the quantitative impact survey that we did
06:07and that that's the right way to proceed.
06:09That's how we would ordinarily proceed
06:10and we don't see why we would deviate from that.
06:13And this is the conversation we're now having
06:16with the leadership of the FDIC and the OCC
06:18and my hope is that we'll be able to come together
06:21around a way to proceed forward very soon.
06:23I had hoped we would have done so by now
06:26but I believe we will do so fairly soon.
06:28Hey, Mr. Chairman.
06:29Thank you for joining.

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