🚨Conservative News & Finance • Federal Reserve News • Interest Rates Today

Added: 2026-06-03

[00:00:00]Twice this past month, I've traveled to Dover Air Force Base, and it's been something. I wanted to be with those heroes as they return to American soil.

[00:00:11]And I was with them and their families, their parents, their wives, the husbands. We salute them. And now we must honor them by completing the mission for which they gave their lives.

[00:00:23]And every single one of the people, their loved ones said, "Please, sir, please finish the job." Every one of them. And we are going to finish the job. And we're going to finish it very fast. We're getting very close. I want to thank our allies in the Middle East, Israel, Saudi Arabia, Qatar, the UAE, Kuwait, and Bahrain. They've been great, and we will not let them get hurt or fail in any way, shape, or form.

[00:00:53]Many Americans have been concerned to see the recent rise in gasoline prices here at home. This short-term increase has been entirely the result of the Iranian regime launching deranged terror attacks against commercial oil tankers and neighboring countries that have nothing to do with the conflict. This is yet more proof that Iran can never be trusted with nuclear weapons. They will use them and they will use them quickly.

[00:01:20]that would lead to decades of extortion, economic pain, and instability worse than we can ever imagine. The United States has never been better prepared economically to confront this threat.

[00:01:33]You all know that. We built the strongest economy in history. We're going through it right now. The strongest in history. In one year, we've taken a dead and crippled country. I hate to say that, but we were a dead and crippled country after the last administration and made it the hottest country anywhere in the world by far with no inflation. Record setting investments coming into the United States over $18 trillion and the highest stock market ever with 53 all-time record highs in just one year. It all positioned us to get rid of a cancer that has long simmerred. It's known as the nuclear Iran. And they didn't know what was coming. They've never imagined it. Remember, because of our drill a baby drill program, America has plenty of gas. We have so much gas. Under my leadership, we are number one producer of oil and gas on the planet. Without even discussing the millions of barrels that we're getting from Venezuela because of the Trump administration's policies, we produce more oil and gas than Saudi Arabia and Russia combined.

[00:02:48]Think of that. Saudi Arabia and Russia combined. And that number will soon be substantially higher than that. There's no country like us anywhere in the world. then we're in great shape for the future. The United States imports almost no oil through the Hormo Strait and won't be taking any in the future. We don't need it. We haven't needed it and we don't need it. We've beaten and completely decimated Iran. They are decimated both militarily and economically and every other way. And the countries of the world that do receive oil through the Hormone Strait must take care of that passage. They must cherish it. They must grab it and cherish it. They can do it easily. We will be helpful, but they should take the lead in protecting the oil that they so desperately depend on. So to those countries that can't get fuel, many of which refuse to get involved in the decapites. And in any event, when this conflict is over, the strait will open up naturally. It'll just open up naturally. They're going to want to be able to sell oil because that's all they have to try and rebuild. It will resume the flowing and the gas prices will rapidly come back down. Stock prices will rapidly go back up. They haven't come down very much. Frankly, they came down a little bit, but they've had some very good days over the last couple of days. Thanks to the progress we've made, I can say tonight that we are on track to complete all of America's military objectives shortly. Very shortly, we are going to hit them extremely hard over the next two to three weeks. We're going to bring them back to the stone ages where they belong. In the meantime, discussions are ongoing. Regime change was not our goal. We never said regime change, but regime change has occurred because of all of their original leaders death. They're all dead. The new group is less radical and much more reasonable. Yet, if during this period of time, no deal is made. We have our eyes on key targets. If there is no deal, we are going to hit each and every one of their electric generating plants very hard and probably simultaneously.

[00:05:10]We have not hit their oil, even though that's the easiest target of all because it would not give them even a small chance of survival or rebuilding.

[00:05:21]But we could hit it and it would be gone and there's not a thing they could do about it. They have no anti-aircraft equipment. Their radar is 100% annihilated. We are unstoppable as a military force. The nuclear sites that we obliterated with the B2 bombers have been hit so hard that it would take months to get near the nuclear dust and we have it under intense satellite surveillance and control. If we see them make a move, even a move for it will hit them with missiles very hard. Again, we have all the cards. They have none. It's very important that we keep this conflict in perspective. American involvement in World War I lasted one year, seven months, and five days. World War II lasted for 3 years, 8 months, and 25 days. The Korean War lasted for three years, 1 month, and two days. The Vietnam War lasted for 19 years, 5 months, and 29 days. Iraq went on for eight years, 8 months, and 28 days. We are in this military operation so powerful, so brilliant against one of the most powerful countries for 32 days and the country has been eviscerated and essentially is really no longer a threat. They were the bully of the Middle East, but they're the bully no longer. This is a true investment in your children and your grandchildren's future. The whole world is watching and they can't leave the power, strength, and brilliance. They just can't believe what they're seeing. They leave it to your imagination, but they can't believe what they're seeing. The brilliance of the United States military. Tonight, every American can look forward to a day when we are finally free from the wickedness of Iranian aggression and the spectre of nuclear blackmail. Because of the actions we have taken, we are on the cusp of ending Iran's sinister threat to America and the world. And I'll tell you, the world is watching. And when we do, when it's all over, the United States will be safer, stronger, more prosperous, and greater than it has ever been before. May God bless the men and women of the United States Armed Forces, and may God bless the United States of America. Thank you very much and good night.

[00:07:58]>> The ethics folks, they've cleared you, but they've said you got to sell some assets. Is that right?

[00:08:05]>> Uh, yes, sir.

[00:08:06]>> Okay. And these assets that you have, you can't just hold a yard sale, can you?

[00:08:13]>> Uh, no. Not for most of them, sir.

[00:08:14]>> Okay. So, it takes a fair a reasonable period of time, right?

[00:08:20]>> Uh, yet yes, sir.

[00:08:20]>> And you're going you've promised to sell them, right?

[00:08:23]>> Uh, I did. And if you don't sell them, we'll know and the ethics folks will know, right?

[00:08:29]>> Uh, yes. I'd be in violation of the ethics agreement if I refuse to sell them.

[00:08:33]>> But you're going to sell them, right?

[00:08:34]>> Uh, yes, Senator. I will.

[00:08:36]>> Okay. Can we agree?

[00:08:40]Can we agree that politicians have the right to offer you advice about what to do with interest rates? Uh, Senator, we can agree and it's not something that I would shy away about what you ought to do within. I'm not going to appoint anybody who wouldn't agree to lower interest rates.

[00:09:00]Have you agreed with the president that you're going to lower interest rates?

[00:09:04]>> Uh, Senator, I'm glad you framed it that way. The president never asked me to predetermine, commit, fix, decide on any interest rate decision uh in any of our discussions. Uh nor would I ever agree to do so.

[00:09:20]>> So the president has never sat you down, looked you in the eye, and said, "Here's the deal, Scooter. I'm going to appoint you, but you got to agree to lower interest rates." That didn't happen or it did happen. Uh the president never once asked me to commit to any particular interest rate decision period and nor would I ever agree to do so if he had but he never did. I was honored he nominated me like everyone else in the committee in the world. I've heard his view on interest rates. It sounded very similar to me to every other president in economic history that I've studied.

[00:09:56]>> Okay. I I've got a I've got one more question because I'm about to run out of my parliamentary inquiry time. Um I've heard your argument the last few months about artificial intelligence has made us so productive um labor labor so productive that that companies don't have to raise prices.

[00:10:20]Therefore uh inflation isn't isn't a problem. Therefore, rates can be cut. Do you really believe that right now?

[00:10:28]>> No, I that is not how I would characterize the story on AI.

[00:10:32]>> Okay. But you've said what I just said, haven't you?

[00:10:35]>> Uh I have said that this is the most uh disruptive moment in modern economic history in the US and the world. I've said that artificial intelligence AI short. Let me stop you because the chair is going to cut me off.

[00:10:51]>> Sorry. Here's my worry that a lot a lot of this stuff about artificial intelligence making us more productive is a bunch of hype by people who want to sell stock in an IPO.

[00:11:02]>> Okay. I'd be careful there. Yeah.

[00:11:03]>> Thank you, Mr. Chairman. I'll get to my five minutes in a little bit.

[00:11:10]>> You come back about midnight, sir. We'll go ahead start it all over again. Brand new day, sir. Brand new day. Thank you for your patience, Senator.

[00:11:19]>> Thank you, >> Cortez Masto. Thank you uh Mr. Walsh.

[00:11:22]Thank you uh for taking the time with me. I appreciate meeting with you.

[00:11:26]Congratulations on this nomination and uh welcome to all your family friends who are here. Um let let me um talk to you about a couple of things on it's really around economic theory and we have talked a little bit about this when when we were meeting. Inflation has been um above the Fed's target for five years. Would you agree with that?

[00:11:48]>> Uh yes, Senator.

[00:11:49]>> Yeah. And core PCE inflation has been running at about 3% a full point above that Fed target. Correct.

[00:11:56]>> Yes.

[00:11:56]>> And so some Federal Reserve officials have said that this excess is due to tariffs. Do you agree with that?

[00:12:05]>> Uh Senator, I don't. I if I can make two points. Um >> uh much as we discussed in in your office, I think the data that's being used to judge inflation is quite imperfect data. And among the projects that the economics profession and if I'm confirmed as chairman of the Fed, the Fed needs to do is to try to use our new understanding and new data sources to see what's really the inflation rate in the economy. We used to use core PCE core measures so we'd exclude food and energy because it was sort of a rough swag as to what was going on. We don't have to do a rough swag anymore. What I'm most interested in is what's the underlying inflation rate. Not what's the one-time change in prices because of a change in geopolitics or a change in beef, but what's the underlying generalized change in prices in the economy? And my broad sense is that these inflation uh uh risks and the inflation damage the last several years is improving somewhat. It has improved somewhat in the last year. The measures I prefer are looking at things that are called trimmed averages where we take out all of the tail risks, all of the one-off items. And we ask ourselves whether the generalized change in prices is having second order effects on the economy. Again, they're not where they should be, but I think that the trend is quite favorable.

[00:13:27]>> And these trend averages in the data that you're looking at now, it's not traditionally the norm that economists would use in this position. Is that correct? uh some of some in the economics profession are increasingly looking to these median type measures but among the projects I would hope to undertake as one of the first reforms at the Fed is a data project where we would go off and we would evaluate with the public sector and the private sector including the Bureau of Labor Statistics a survey of a billion prices and what I'm really most interested senator is what's the change of that 500 millionth and one price because that's inflation That's a change in the generalized level. In a market economy, prices change all the time and I don't want to be confused by that. I want to know what inflation really is and I still think there's some work to do >> and and I respect listening to you today and talking with you. I respect you truly believe as an as a economist and a theorist in this theory in in in in what you are talking to us today about which is traditionally not the norm and many are disagreeing with you on that and and publicly disagreeing and so I understand that. Um, but I guess the position I have is I hope you're right, but at the end of the day, my concern is people are suffering right now with high cost and and we need to address it. And I don't know how long it's going to take for your economic theory um to gain traction or to be proven that it's going to benefit so many people in this country right now. And here's here's one other thing because I don't have that much time and and this is what is also a concern of mine, so I want you to address it. Um earlier you've been on the Federal Reserve Board and you were there during the financial crisis of 2008. We and I you and I talked about this. I was the attorney general then.

[00:15:12]It hit Nevada so hard. Here's what I do know and um at that time um in 2006 you attended numerous meetings where housing experts pleaded with you to stop predatory mortgages. In fact, Gail Burks, who was the CEO of Nevada's Fair Housing at that time, who I worked with, repeatedly warned Fed leadership, including you, about predatory lending practices such as flipping loans or misinforming seniors about reverse mortgages. And in 2007, you said, and I quote, "Subprime mortgages have gotten a bad name in this environment, and in some cases, that's not just." You also said that you don't see any immediate systemic risk issues among big banks.

[00:15:57]And you said that at that time. And then just recently, and this is what I want you to address, uh, Senator Warren has said that you told her you had no regrets during this tenure. H how can we trust that your economic theory when you were wrong then is going to be the accurate theory we need now to help so many families and businesses that are struggling with the policies that we're dealing with now?

[00:16:19]>> Uh, Senator, uh, let me address a few things. The chairman is going to cut me off uh, when he must, but I would say this. Um, for many years before the global financial crisis, I warned about the very real risks of Fanny May and Freddy Mack blowing up, which they did.

[00:16:35]I think that part of the housing market was vulnerable for many years and not enough was done about it. Even in spite of my protestations and my urging about GSSE reform, it wasn't done. I think that compounded the financial crisis.

[00:16:49]Secondly, I think subprime mortgages then, subprime assets then were indicative of prices of almost every financial asset that were mispriced.

[00:16:58]What I suggested then and what I believe now is that some prime mortgages were just indicative of a set of prices that were incorrect and they all repriced.

[00:17:09]Just to give one fine example before I turn to the chairman.

[00:17:11]>> Perhaps perhaps no examples right now.

[00:17:14]Let's go to Senator Hagerty. want to give you opportunity to finish that exchange.

[00:17:19]>> Thank you, Mr. Chairman, and um Mr. Wsh, I want to welcome you and your family.

[00:17:24]Um and I want the committee to know that I have known Kevin Walsh for 30 years.

[00:17:30]We first crossed paths back in 1992, shortly after Kevin graduated from Stanford. We both worked on the White House staff at that point in time. And I just want to say this that the man testifying before us today is the same man that I got to know then. Serious, disciplined, with a true heart for public service. And I want to say this, I've said it before. Kevin Walsh is the man for the moment.

[00:17:57]His background, his experience, and his discipline are precisely what we need to bring our economy into its full potential. I'm delighted to see him here today as we both reinforce competence here at home and do the same thing abroad. And if I think about Kevin's qualifications, think about the contrast with the nominations that we saw with the last administration.

[00:18:21]I think this committee will recall that President Biden nominated a prospective federal bank regulator, frankly a graduate of Moscow State University in Russia, who advocated for replacing private bank deposits with retail accounts held at the central bank.

[00:18:38]Those who might criticize Kevin for his private sector success miss the point.

[00:18:43]Kevin's experience is not a liability.

[00:18:45]It's an asset.

[00:18:47]It brings a practical understanding in terms of how markets function to bear, how capital is allocated, and how policy decisions shape the real economy.

[00:18:58]Mr. Walsh, how will your experiences in both the public and the private sector shape your governance of the Fed should you be confirmed?

[00:19:06]>> Uh, Senator, thank you very much and thanks for the the kind introduction. uh for your colleagues on on this panel. Um Senator Hager and I shared a desk uh 91 and '92. So I've known him for a very long time. Um I think the my prior experience at the Fed, which uh some of your colleagues made reference to are going to allow me to hit the ground running. Uh this is as consequential a moment for the US economy and frankly for the institution as any point since the late 1970s. And so my experience at the Fed, my understanding of the people, the culture, the governance, and of the things that are ripe for reform are going to give me a leg up. We don't have a long time to do new studies and contemplate what reform should be. We have a short window to try to bring inflation back down to where it should be to ensure price stability. And because AI that Senator Kennedy referenced is so consequential and AI is quickly becoming at something like escape velocity, it's important to revisit the Fed's models and see whether this innovation cycle, while it could have over time improvements in the price level and make the Fed's job on inflation easier, um there's a question about what that means for employment, which is another part of the Fed's mandate. So I think that's part and parcel of what what uh my background and suggestion and uh history would suggest.

[00:20:35]But if I can make one other point, um what the Fed needs is a reform to its frameworks and reforms to its communications. I've seen the what the Fed's done well and often I'll give them one cheer or two, but now more than ever the Federal Reserve needs three cheers and that's what I hope to deliver. Well, let's stay on this point. Uh, particularly, and you've mentioned this in your commentary, the the the point of the Fed's mission creep over the years.

[00:21:01]Um, if you think about what the Fed has done, they've strayed into what I would call politically contentious areas.

[00:21:09]They've gone well beyond their core mandate. And we've seen this across the Federal Reserve system. And what the Fed has done is eroded its credibility as what it should be, which is an a-olitical and independent central bank.

[00:21:22]In bank regulation and supervision, the Fed's focused on non-material and often politically charged areas. I'm thinking about climate change policy here.

[00:21:29]Elsewhere in the Federal Reserve system, we've seen regional reserve banks used as platforms for promoting very divisive partisan policies. There, I'm thinking about DEI, climate policy, even racial reparations. The Minneapolis Fed even went so far as to publicly lobby for an amendment to a state constitution on education policy. How far beyond the remmit can they get? In the 2020 monetary policy review, the Fed even sought to redefine its legislative mandate of maximum employment as a broad quote broad and broad-based and inclusive goal close quote. I mean, that's tacitly understood to mean that the Fed should accept higher inflation to privilege select groups of Americans.

[00:22:08]And while the Fed undertook this social engineering, it also financially engineered a massive footprint in our market. QE provided near unlimited bid for government debt which of course made it easy for us to subsidize more government debt here. It subsidized government financing and it encouraged frankly what I view as very reckless federal spending. In each of these examples, we see a clear pattern. The Fed has strayed beyond its core mandate to encroach upon policy decisions that ought to be left to those of us that are democratically accountable. Mr. Worsh, the Fed's own actions have eroded its credibility. What do you think should be done to regain public trust?

[00:22:45]>> Uh, Senator, uh, robust reform. The Fed can deliver on the mandate that you gave it if it sticks to its nitting as it wanders into areas upon which it has neither authority or expertise. It loses its focus. And I'll just give one example. In 2020, as you reference, when the Federal Reserve changed its inflation framework in August of 2020, inflation was running at around 1.72%.

[00:23:13]And the Fed changed its framework, rewrote in some sense the remitt you gave it, and they asked for a little more inflation. They ended up with a lot more, and that's was the foundation for the inflation surge that happened in the subsequent years, which we're still living with.

[00:23:31]>> Thank you, Mr. Wars. Thank you, Mr. Chairman, >> Senator Smith.

[00:23:37]>> Thank you, Mr. Chair. Good morning, Mr. Wars. It's still morning. Um, so, um, let me start with this. I think you have said that you have confidence that this economy has potential. I think that's fair to say. And you've also said that this is a time of great consequence for the nation's economy, perhaps one of the most significant hinge points um, in a couple of generations. Is that that's fair to say?

[00:24:00]>> Yes, sir.

[00:24:01]>> Thank you. And so I agree with that and I I actually want to go a bit further because I think that it seems to me that this economy is amazing for rich people, people who have a lot of capital. Um and in fact we can see in 2025 billionaire wealth grew three times faster than the average rate of the previous five years.

[00:24:21]Um and wealthy households hold a massive portion of the nation's wealth. And this, I think, is the tipping point that our economy actually faces right now.

[00:24:32]And I can tell you that in Minnesota, a lot of people are telling me that it is harder and harder for them to afford the basics. They aren't rich. They don't have enough money to pay their bills, to pay their doctor's bills. Um, so I want to look at this with you for a few minutes. And I want to um I want to start with inflation. So last week, President Trump said that gas prices are quote not very high and quote, "We're having some fake inflation because of the fuel." So understanding what you've been saying about data and measurement and all of that, let me just ask you, do you think that gas prices going up 20% is fake inflation?

[00:25:10]>> Uh, Senator, the gas prices like beef prices, eggs, milk, and the rest, they move. And when they move in the wrong direction, the American people are hurting by it. There's no question about it.

[00:25:20]>> That's right. American people feel it.

[00:25:22]It doesn't It's not fake to them. It's money that they don't have in their pocket because gas is up 20%. Um I think my in my constituents would say that that inflation is real and not fake.

[00:25:33]Okay, so let's look at unemployment. At the State of the Union, the president said, quote, "The economy is the roaring economy, excuse me, this is the quote.

[00:25:42]The roaring economy is roaring like never before." So do you agree with that statement? Is that how you see the economy that is roaring like never roaring before?

[00:25:53]>> So So Senator, if I can clarify two things. One, there's a difference between the change in prices and inflation. The change in prices happen in a market economy. When inflation moves up, that's because the Fed had something to do with it. Now on on the state of the economy, I would say that the broad contours of the economy are improving. the potential of the economy, the real results of the economy are improving, but I think it can improve more and I think uh in the years ahead I think the economy's potential is strengthening.

[00:26:22]>> So um you know the reality is that the economic data understanding what you're saying about economic data being not imperfect that there was almost zero job growth in 2025. And so that looks to me like not a roaring economy it looks like a weak economy which is what my constituents are telling me back in Minnesota. Let me go to one last um one last um look at this. Around the country, uh the average cost of home insurance rose 12% last year. Now, in my home state of Minnesota, not a coastal state, um premiums rose 34% in 2025. Um this is of course caused by extreme weather events, hail, floods, tornadoes, hurricanes, climate change. So, is that inflationary and from in your perspective? is that increase in home insurance, property and casualty insurance. Isn't that >> about, you know, just the real cost that families are facing right now? And I appreciate that you were pushing back on that comment that the president had about calling the energy prices and the fuel price increases that we're having fake inflation because right now Americans have paid more than 8.4 billion dollars more in gas during the first year, first month of this war.

[00:27:35]fertilizer. 70% of respondents to the Farm Bureau survey said that fertilizer is uh unable to be afforded right now just given the price increases. Are you concerned that there could be real long-term incre in long-term effects of this war in Iran? Uh you know, especially if we're continuing to see these challenges when it comes to fuel and fertilizer. Uh, Senator, I if my reform agenda, if confirmed, stands for anything, it's for the central bank, especially the Fed chairman to stay in its lane.

[00:28:06]>> I know that, but you also want to wander outside of it. I'm happy.

[00:28:09]>> But you're also you're also charged with forecasting in terms of understanding where our economy is going. So, does an impact of that magnitude rise to something that the Fed should keep an eye on and be concerned about? uh the Fed should be have an open mind towards all sorts of data, but the things that central banks can affect are things that are not one-off in nature, but are persistent and find their way into the generalized price level.

[00:28:33]>> And that's something I want to I wanted to ask you about that because you talked about a fundamental policy change when it comes to the Fed and I guess I wanted to just get a little bit more clarity on that. You know, Senator Lumis mentioned about the balance sheet uh and the concern you have about that. Do what level do you think the balance should be at? you know, if it's 6.7 trillion now, where do you think the goal is in your mind?

[00:28:55]>> So, I haven't fixed a particular number, but any changes, Senator, in the balance sheet would be part of a public discussion, debated rigorously, and if and when the central bank comes to a judgment about a new balance sheet policy, which I hope the central bank would, it would be described well in advance. As I mentioned, it took 18 years to create this balance sheet problem and we won't be able to fix it in 18 minutes. And so that's why I think deliberation here is important. But it suffices to say it should be smaller and at least as important. It should not be holding long-term Treasury assets as if it's the fiscal authority gets into politics.

[00:29:33]>> I appreciate you saying that it's important to be able to have that public discussion. I mean, one thing that's come up as I've been engaged with different experts is concern about rapid reduction. uh if you are moving in that speed that it could generate a number of concerns including upward pressure on long-term interest rates. So I guess I just wanted to check do you share that concern you know as you are thinking about how to reduce it. Do you also understand though that there are concerns about rapid reduction in the speed with which you're trying to go down? Yes, Senator. And that kind of regime change would have to be deliberate, well orchestrated, well um choreographed and well described so that uh unnecessary upset are not done to financial markets as we go to a policy regime change much more focused on interest rates.

[00:30:19]>> With that, I'll yield back.

[00:30:20]>> Thank you, sir. Senator Rickettts.

[00:30:23]>> Thank you, Mr. Chairman. Thank you, Mr. Waters. It was great to see you in my office. Thanks for coming by. I want to continue to talk about inflation because it is something that is incredibly important. You I think you share the view that inflation is a silent tax on American households. Is that accurate?

[00:30:39]>> Uh Senator, it's accurate. It's the most regressive tax that anyone in Washington could come up with. If you were trying to do the most harm to the least welloff among us, inflation would be the way to do it.

[00:30:51]>> Yeah. And my colleagues on the other side of the aisle have been talking about that. And I note, at least I don't recall that they ever talked about that during the Biden administration because it was during the Biden administration that we saw this record inflation, this 40-year-old high inflation. And yet my Democrat colleagues were silent about it back then. Now they want to talk about it. But of course, American households were hurting back then as well. Uh inflation was caused by President Biden's irreckless policies and reckless spending. Let's look at ARPA, a B a partisan bill that was passed by the Democrats, which cost taxpayers $1.9 trillion.

[00:31:30]When ARPA was passed in March of 2021, inflation was at 2.6%. Inflation quickly accelerated by it was over 5% by May, June, and July, and by the end of the year, December, it was 7%.

[00:31:43]Does federal government spending have anything to do with inflation, Mr. Walsh? Uh, Senator, uh, as we talked about in your office, my view of inflation is a bit different from some.

[00:31:54]I don't think inflation comes about when the economy grows too much or hardworking Americans get increase in their wages. I think inflation comes about when the government prints too much, by which I mean the central bank.

[00:32:06]And broadly speaking, the government spends too much. And so, we're spending too much money and now we've been cleaning up their mess ever since. I will also note the Republicans have been taking efforts to reduce the deficit. I think year to date it's down about 10.6% from where it was last year or uh and this is why it's so important we get our spending under control. I think you also talked about the balance sheet and one of the things about the balance sheet is that I think if I hear you're saying it's too big and it benefits people who have financial assets but if you don't have financial assets you haven't seen the benefit of a a large balance sheet at the Fed. Is that accurate?

[00:32:47]>> Uh, Senator, it's broadly accurate. Uh, when the large balance sheet was created in the 2008 financial crisis, the agreement between my colleagues and I was that we would only use this in a emergency scenario because the transmission mechanism for a large balance sheet goes two ways through signaling effects and through asset prices. Now, at the time of the financial crisis, financial asset prices were down 60 or 70%. And so it was understandable interest rates were at zero. But in the ordinary course, the central bank, an independent body, should not be adopting a set of policies that have that kind of distributional consequence. That's why interest rates are a better way to be setting monetary policy. So if I I don't want to put words in your mouth, but just what I hear you saying is let's reduce the size of balance sheet because that benefits maybe half the American population and then let's focus on interest rates and inflation so we can benefit all Americans. That if we take interest rates down that benefits all Americans, you said it gets into the nooks and crannies. That if we get inflation under control that is how we benefit all Americans and the size of the balance sheet has only benefited some Americans.

[00:33:57]So what you're really about is trying to change a policy at the Fed that has really benefited under the last administration people who have lots of money. Actually, not just the last administration, people the previous administrations, but you also want to make sure we get off of the inflation. I mean, during the Biden administration, we saw four years in a row of declining real wages for American households. And what you want to do is get that inflation under control so that all American households benefit. Is that fair?

[00:34:23]>> Uh, that is fair. Uh I'm going to paraphrase uh former chairman Paul Vulkar uh where he said something along the following lines. You would need to have a PhD from an elite institution to believe that inflation doesn't have something to do with money.

[00:34:40]>> Okay, great. Real briefly. I've only got a few seconds left here, but I'm going to hit upon switch topics on you real briefly. uh chairman pow and secretary bassent met with leaders of our largest banks recently to talk about advanced AI models like mythos from anthropic toi identify banking um vulnerabilities that's apparently very good at finding those vulnerabilities when confirmed will you what will you do to modernize the Federal Reserve's internal risk assessments tabletop or scenario planning exercises to ensure that we can anticipate and defend against the type of emerging risks that potentially models like mythos could present if used in the wrong hands >> have about 20 seconds to answer that.

[00:35:17]>> 20 seconds uh Senator um uh a lot is the short answer. The 15-second answer beyond that is the pace of change in these technologies is accelerating. Uh AI, which I think of really is American ingenuity, gives America a huge head start relative to our uh competitors around the world, but it's not without real risks and real challenges. And a forward-looking reform oriented central bank needs to be on the front end of it.

[00:35:45]Great. Thank you very much. I look forward to your leadership.

[00:35:48]>> Senator Ggo.

[00:35:49]>> Thank you, Mr. Chair.

[00:35:50]>> How are you?

[00:35:51]>> In uh 2019 interview with Bloomberg, you said monetary policy is important not for decision it makes but for reasons it gives for the explanations. Mr. Walsh, the Federal Open Market Committees or um that the Fed sets US monetary policy through interest rates decisions at those meetings. Do you commit to maintaining the current practice of holding a meeting at least once every eight weeks? Yes or no?

[00:36:13]Uh, Senator, by by statute, as we talked about in your office, I believe the statute requires a minimum of four meetings, but four is not enough. So, having more meetings than that is appropriate, but I've not even begun to look at the meeting schedules for 2027 and beyond. Uh, of course, subject to confirmation.

[00:36:30]>> So, then do you commit to holding a press conference at least on the day of the FOMC meetings?

[00:36:36]>> Uh, Senator, um, uh, right now press conferences are held periodically. If you ask me my true personal opinion, uh, right now Fed chairs and other central bankers around the FOMC, they speak quite frequently. There is no lack of transparency. But I would say this, >> I think truth seeeking is more important than repetition. If one has a press conference, one wants to deliver some important news. Perfect. Follow up on that. Then, would you commit to taking questions at those press conferences?

[00:37:08]Um I if a press conference were held, I think it would be incumbent to hear what uh the reporters of the day had in mind.

[00:37:15]>> Thank you. I'm glad you know our our personal meeting regarding this uh was very enlightening. Um earlier today you said to Senator Kennedy that President Trump never demanded you to cut interest rates in your job interview. Is that your sworn testimony?

[00:37:29]>> That is Senator.

[00:37:30]>> Okay. Well, someone here is lying then.

[00:37:33]uh because either you or President Trump because in an interview with the Wall Street Journal of December 12th, President Trump confirmed that he pressed you on your commitment to support interest rates cuts and I quote during a 45minute meeting with Walsh on Wednesday at the White House. The president pressed Walsh on whether he could trust him support interest rate cuts if he were chosen to lead the central bank. According to PIPA familiar with the meeting, Trump in the general interview confirmed that repeating uh Mr. Chairman, I'd like to enter for the record uh the Wall Street Journal article December 12th, Trump says he's leaning towards Walsh or has it to lead the Fed. So, you know, this brings up an issue of credibility at this point.

[00:38:14]Who's lying here? Is it you or the president? Because the president confirmed that he did ask you to cut interest rates.

[00:38:20]>> Uh Senator, there's of course a third alternative. You cite a couple of reporters for a leading financial newspaper. I recall reading that story at the time.

[00:38:31]>> Did you issue a correction?

[00:38:32]>> I think those reporters either need better sources or better journalista standards.

[00:38:37]>> Did you ask for a correction?

[00:38:40]>> There are things in the newspaper center I see all the time that don't strike my ear as correct.

[00:38:44]>> So it is in your opinion that the president then is lying when he said he did not ask you. Uh, I can only repeat to you, Senator, what I said to several of your colleagues.

[00:38:54]>> So, you did not you right now under sworn testimony are saying just to right now that the president of the United States in that job interview did not asked you to cut interest rates.

[00:39:05]>> The president never asked me to commit to interest rate cuts at any particular meeting over the period of my uh tenure at the Fed. He didn't ask for it. He didn't demand it. He didn't require it.

[00:39:17]And nor would I have ever done so. So, if these reporters come back and say to do another follow-up on this and they confirm what they heard, what will your response be?

[00:39:26]>> Well, my response would be what I suggested to you a few moments ago. Um, as I read that story in real time, I remember thinking they either need better journalistic standards or better sources.

[00:39:36]>> So, you know, here's my problem. Uh, Mr. Chair and colleagues, I, you know, and and Mr. Worsh, I think you're incredibly qualified. A lot of us are actually worried about the integrity of the Federal Reserve. We're worried about what this means for the economic markets and we're worried about what's this means for inflation. We're worried about your independence. And now we're hearing direct contradictions whether or not you were directly asked by the president to cut interest rates and you're saying no and he's saying yes. And I think for a lot of us there's a question now of credibility. And I think there's a real reason why uh many of us are not voting no. As a matter of fact, until you verbally spoke to Mr. Kennedy and answered his question that he did not answer ask the president did not ask you uh to cut interest rates. This was not even going to be brought up. So there's definitely right now a true question about who is lying here. It's either you or it's the president. I yield back.

[00:40:32]>> Senator, if I if I might respond.

[00:40:34]>> Certainly.

[00:40:34]>> Uh thank you. Uh I take my responsibility to be an independent leader of the Federal Reserve very seriously if confirmed by this body. I take the integrity of the office and my personal integrity very seriously. And um uh I I stand by every word I said.

[00:40:56]The president never asked me to commit to any such thing, nor would I ever do so.

[00:41:01]>> Mr. Banks?

[00:41:04]No sir.

[00:41:05]>> Thank you, Mr. Chairman. Governor Worsh, congrats on your nomination. Uh, as we spoke about uh during our meeting in my office, I strongly support your nomination and look forward to voting for you to be the next chairman of the Federal Reserve reserve and it can't happen soon enough. Um, one policy area that we strongly agree on is the threat that China poses to America's economy.

[00:41:26]In fact, you've written publicly that China is deliberately positioning its financial system to rival US leadership and actively working to elevate its currency on the global stage. Can you talk for a minute minute about how the Federal Reserve reinforces the strength of the US dollar as the world's uh reserve currency in the face of that challenge?

[00:41:48]>> Sure. Uh Senator, it's great great to see you again. We talked about some of these issues of the G2 rivalry, the rivalry between the US and China in your office. Uh if confirmed as chairman of the Federal Reserve, I will then have to say that it's the Treasury Secretary's business to talk about the dollar. It's the Fed chairman's business to talk about interest rates. Um but I think I can say this quite comfortably. Uh the dollar is the is the lynchpin of the global economy. The United States and the Federal Reserve is a beneficiary of the strength of the dollar. The US financial system is the most important financial system in the world and the central bank's been charged with really important responsibilities and overseeing it and supervising it. Um there are risks to the US position in the world including economic the economic statecraft agenda led by Secretary Bess secretary Rubio is an important one. on that the Fed will play a supporting role in ensuring that the financial system is as safe as it can be and work with them because it's outside of the conduct of monetary policy to ensure the US is on its front foot and in a position of strength during this period of um rivalry between the US and uh another nation around the world.

[00:43:05]>> What what are some of those? I understand uh the role of the Treasury Department versus the Fed, but what are the most important steps that the Fed can take to reinforce confidence in the US dollar?

[00:43:15]>> Uh deliver stable prices, Senator. Uh deliver an economy that uh improves from here even further, where uh real take-home pay moves up, where inflation falls, and the US economic growth potential is the best in the world. I mentioned earlier senator something that I really do believe. Um AI is a testament to American ingenuity. The United States is the best positioned country in the world to take advantage of it so that the US economy, US workers benefit from it. Um that the US is in a better position than anyone else, but it's filled with challenges, geopolitical challenges, technology challenges. So the sooner that we can hit the ground running on reform agenda, the better.

[00:44:02]>> You you wrote in an op-ed in 2021 in the Wall Street Journal that I recommend everyone reads. It's one of the reasons that I wholeheartedly support you because of what you it says a lot about you in this op-ed. But you you talked about how the PRC is actively promoting its digital yuan currency with the explicit goal of creating an alternative payment system that sidesteps US sanctions. You've been very clear that China is not playing by the rules. China is buying over 80% of Iran's sanctioned oil and Chinese currency through Chinese banks completely outside Swift. The Iranian government says it is charging ships to transit the Straight of Hormuz and collects payments via crypto and Chinese currency. What tools does the Federal Reserve have to defend the dollar's role as countries route payments through the Chinese financial systems to do business with Iran and other adversaries?

[00:44:56]>> Yeah, Senator, thank you. Um, as we talked about before, monetary policy is independent, but outside of monetary policy, the Federal Reserve can be working handinhand with the rest of the government. Um, the Federal Reserve is independent inside of government, not independent of government. Um what the US can do with respect to the dollar is have a more robust uh payment system.

[00:45:24]The Fed has a number of payment systems that most financial participants in the world use. I would say they all are in need of substantial reform. Uh there's a system called Fed now which some describe as Fed yesterday. There's a series of new technologies that the Fed needs to oversee and needs to architect so that the payment system in the US is the safest, most efficient uh uh most capable in the world. Otherwise, we'll be losing uh losing to adversaries around the world in being the lynch pin of the global economy.

[00:45:56]>> Thank you. Your your leadership is so important and it's important uh right now. We we need you on the job right now, not not later, right now. So, I look forward to uh voting for you quickly and and seeing you confirmed and getting you on the job. With that, I yield back.

[00:46:10]>> Thank you, sir. Senator Blunt, Rochester.

[00:46:13]>> Thank you, Mr. Chairman and Ranking Member Warren. Uh also, thank you, Mr. Worse, um for taking the time also to meet with me uh earlier this week. Um I I share many of the concerns of different committee members about us kind of putting the cart before the horse. Um, and in one regard it is the whole issue of independence of the Fed.

[00:46:38]And I know you have made commitments both in your testimony and here today um with us in the process of watching the president try to fire Chairman Pal as well as Governor Lisa Cook. Um, it really raises a lot of red flags for us.

[00:46:57]Um, even Justice Kavanaaugh said that no president has fired a sitting governor in the 112year history of the Fed, which was structured to be independent of day-to-day politics, and that it would weaken, if not shatter, the independence of the Federal Reserve. There are a lot of questions here today as well about both ethics and whether or not all the paperwork is in and uh even uh Senator Warren's question about you know selling of the assets and whether they would be transparent is something that's important again to um ensure confidence and so I I I shared some of those concerns with you in person when we met and I share them here for the record. I did have a question. I want to focus on AI, but I did have a question beforehand that I wanted to clarify. Um, you mentioned your desire for reform as well as regime change at the Fed.

[00:47:52]>> Good afternoon everybody. Thanks for being here.

[00:47:56]On Saturday night, as you all know, an act of violence occurred at a gathering that symbolizes something fundamental to our system of government. the ability of a free press and public officials to come together in celebration and not fear. The act was stopped because of the courage and it was excuse me that act that horrible act was stopped because of the courage and professionalism of law enforcement. The officers who responded without hesitation and did their jobs as they were trained to do.

[00:48:31]Secret Service agents promptly tackled and detained the suspect, Cole Thomas Allen.

[00:48:38]The president and all the protectees and participants at the dinner were safe. One brave officer was injured and is receiving care and has been released from the hospital.

[00:48:53]I want to make this clear.

[00:48:56]This man was a floor above the ballroom with hundreds of federal agents between him and the president of the United States.

[00:49:08]The Department of Justice approaches incidents like this with urgency and clarity of purpose. Violence has no place in civic life. It cannot and will not be used to disrupt democratic institutions or intimidate those who serve them and it certainly cannot continue to be used against the president of the United States.

[00:49:32]We are investigating this matter fully.

[00:49:36]We will apply the law fairly and we will ensure that accountability is swift and certain.

[00:49:43]But we also should recognize what did not happen. Law enforcement did not fail. They did exactly what they are trained to do. This was not an accident.

[00:49:54]It was the result, as we know now, of preparation.

[00:49:59]But the men and women who protected us that night were trained, professional, and had an enduring commitment to the rule of law.

[00:50:09]Today, the Department of Justice filed three federal charges in United States District Court against Cole Thomas Allen. The first count is attempted assassination of the president of the United States.

[00:50:23]This count is punishable by up to life in prison.

[00:50:26]The second count is interstate transportation of a firearm to commit a felony. This is punishable by up to 10 years in prison. And the third count is discharge of a firearm during a crime of violence, which is punishable by a mandatory minimum term of imprisonment of 10 years, a maximum of life, and the 10 years is consecutive to any other sentence imposed.

[00:50:50]Just to go through very quickly the timeline, which many of you in this room already know, the defendant Allen made a hotel reservation at the Washington Hilton for April 24th through April 26th.

[00:51:06]On April 21st of this year, he traveled by train from Los Angeles to Chicago and then from Chicago to Washington DC.

[00:51:17]On April 24th, he arrived in Washington DC at approximately 1:00 in the afternoon and checked into the Washington Hilton.

[00:51:26]Approximately um at 8:40 on the night of April 25th, Allan approached a security checkpoint on the terrace level of the hotel, which is again a floor above where the dinner was taking place. He ran through the magnetom holding a long gun. As he did so, US Secret Service personnel assigned to the checkpoint heard a loud gunshot.

[00:51:51]One secret off Secret Service officer was shot in the chest, but was wearing a ballistic vest that worked.

[00:51:58]This heroic officer who was hit fired five times at Allen, who was not shot, but fell to the ground and was promptly arrested.

[00:52:10]I want to thank everybody who worked tirelessly on Saturday, Sunday, and continuing today. This includes members of the FBI, and Director Patel is going to address that in a minute. It in includes members of the Metropolitan Police Department who were immediately on the scene, the chief, the mayor to make sure that law enforcement was available to do their jobs and had had all the tools they needed to do so. And lastly, um, the United States Attorney's Office here in DC, our US Attorney, Janine Piro, and her team, a prosecutor stayed up all night long, didn't sleep all day yesterday, making sure that we got what we needed from all over the country. It included search warrants in California, search warrants here in DC, multiple interviews that have been conducted already of witnesses and of of family members of of the charged individual, and and continue to work hard today. This investigation is ongoing. It's not complete. A lot of the information that that the media is hearing through leaks or sources, some of it is true, some of it is not true.

[00:53:15]And at the right time, you will hear information from us um as appropriate.

[00:53:20]I'd like to ask our US attorney, Janine Piro, to say a few words and then followed by Director Patel. Thank you.

[00:53:30]>> Thank you, Mr. Attorney General Cole Allen's journey of accountability in the criminal justice system starts today.

[00:53:40]Todd Blanch just indicated to you the charges. Those charges are only three charges that are in the complaint that has been presented in federal district court about an hour ago. There will be additional