Mark Warner Presses Fed Chair Powell: ‘We’ve Got To Star Bringing Mortgage Rates Down’

3 months ago

Before the Congressional recess, Sen. Mark Warner (D-VA) questioned Federal Reserves Chair Jerome Powell on housing affordability during a Senate Banking Committee hearing.

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Transcript

00:00Senator Tellis. Senator Warner of Virginia is recognized. Thank you, Mr. Chairman. Chairman Powell,

00:05it's good to see you again coming this late in the questioning. I'm going to at least hit a couple

00:11of the items that my colleagues otherwise already hit because I make sure it's noted that I raised

00:16them as well. I first want to agree with the chairman, you know, I probably hear more on housing

00:22and housing affordability than any other issue and I agree with the chairman. I know we've

00:27discussed this around a rate cut and I understand most of your answer but I still want to add my

00:34two cents here. We've got to find a way to start bringing mortgage rates down and let people get

00:39unlock that housing market and again we've discussed the rate cut issue and I know you've

00:44got to navigate that but I hope it's sooner than later. I will not recap what I've done

00:52in the last couple hearings with you but I do think the discount window proposal that I've

00:57gotten that I know you're working on, you know, before we think about additional regulations that

01:02we do need in some cases, I think the discount window is an underused tool. It was one of the

01:06initial original tools for the Fed. A lot of my colleagues have talked about quantitative easing

01:11or I mean Basel III endgame. I do hope when we get the revisions that we'll see the quantitative

01:18analysis that again Senator Tellis already raised and other colleagues have raised. I also hope that

01:24one of the questions I raised in my March letter to you was, you know, making sure any new regulatory

01:29structure, how it intersects with existing regulatory structure in terms of market risk, credit risk

01:37and I again hope that we will have that as the revisions come out. I think one of the things that

01:43this debate around Basel III raised was that it is my understanding at least

01:52looked at, you may be all looking at revisions to liquidity standards as well and

01:59wanted to see what you could say about that and whether that part of those standards are under

02:06review and what you're thinking is. Yeah I think that that actually connects to the Silicon Valley

02:10Bank questions as well where I think we there seems to be a need to update assumptions about

02:16liquidity and that's a separate proposal that we're also working on and you know very

02:22important I think we saw how fast that run was it was just exponentially faster than prior runs

02:28that's the new world and you know that's some estimate of what that world is is baked into

02:33things like the you know the liquidity coverage ratio for example. Right and wasn't that the case

02:38what you know if you had 25 cents on every depository dollar leave in six hours no matter

02:42what the capital standards are and one of the things I guess you know there was a lot of talk

02:47after SVB that we need to think about internet driven runs a lot of us raised concerns

02:56candidly I'm not sure I've heard any good proposals so when it comes to you guys or

03:00from folks listening how we think about this new internet driven world and frankly

03:05I think some of the irresponsible behavior by some of the folks that were major depositors

03:11in SVB who in many ways shouted fire in the crowded theater and we've not seen any action

03:17there so I would welcome additional ideas as well and that kind of brings me in my last

03:23questions around around supervisory reform I know the GAO criticized the Fed's

03:31supervisory procedures in the role they played in the 2023 failures.

03:36It is a whole brand new world are we going to look at will your changes to supervisory standards be

03:47comprehensive will they be one-off how how do you think about that in light of the GAO

03:53report and also in light of just the SVB and a few of the other failures we saw last year.

03:57Vice chair Barr is his vice chair for supervision is leading a process of

04:04looking at our at the way we supervise banks and thinking about how we can be faster where

04:11it's appropriate more forceful where it's appropriate and I think you know the they've

04:16taken a pretty deep dive and tried to learn these lessons and then implement them in a way that is

04:23appropriate so that's that's that's a big project going on at the Fed right now which really vice

04:28chair for supervision leads. I think I remember lots of conversations with the chairman with you

04:36with the FDIC and that Thursday through Sunday and I think the the solution you guys came up

04:40with the administration came up with by Sunday night was a good one but they were pretty scary

04:46three or four days there and it did seem like the process I don't know completely how you get fully

04:50ahead of that but I firmly believe that there should have been a clearer early warning system

04:59and trying to make sure that that we wouldn't be in that kind of crisis situation going forward

05:04and again I would strongly encourage any additional thoughts on this technology

05:08risk and how we get that right. Thank you Mr. Chairman.

Mark Warner Presses Fed Chair Powell: ‘We’ve Got To Star Bringing Mortgage Rates Down’

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