In opening remarks during today’s semi-annual Humphrey-Hawkins hearing with Federal Reserve Chair Janet Yellen, Congresswoman Maxine Waters (D-CA), Ranking Member of the House Financial Services Committee, commended the progress made under the leadership of the Federal Reserve, Democrats in Congress, and the Obama administration, but noted that “significant work remains” to elevate the needs of the most vulnerable populations.
In her remarks, Waters also raised concerns with the Federal Reserve's lack of progress on implementing the "living will” requirements under the Dodd-Frank Act that are designed to end "Too Big to Fail."
Full text of the remarks, as prepared for delivery, is below.
Thank you Chair Yellen for being here with us today to discuss the state of the economy and your role in ensuring that a full recovery is achieved for all.
As a result of your herculean efforts, the efforts of Democrats in Congress, and the Obama Administration, we have truly made tremendous progress since the darkest days of the financial crisis.
Over the past 71 consecutive months our economy has added more than 14 million private sector jobs, and the unemployment rate has fallen by more than half.
But despite this commendable progress, significant work remains. Wages have yet to see real gains, 7.8 million workers remain jobless, 6 million workers are involuntarily working part-time jobs, and another 2 million Americans indicate they would join the workforce if only the economy were strong enough to support them.
With inflation consistently running below target, I question whether the expected path for further raising rates over the course of 2016 may over emphasize concerns about inflation, and underestimate the weakness in our labor market.
Absent of a full recovery, I fear that further raising rates is a step that takes us further away from what is needed to ensure that the needs of vulnerable populations are met.
At today’s hearing, I also hope we can explore the ramifications of an exit strategy that relies heavily on paying private sector banks not to lend the funds they hold in reserve, and discuss reasonable alternatives that may exist that do not involve a massive transfer of wealth from the Federal Reserve to private sector banks.
Finally, many of us have been very patient with the Fed's implementation of the "living wills" requirements in the Dodd-Frank Act that are designed to end "Too Big to Fail," and I know you have to give careful consideration to this. But after not one, not two, but five submissions, the Federal Reserve has yet to impose consequences for living wills that are not credible. It is time we understand that we have given a lot of opportunities to the banks to get it right, and they haven’t done that.
Chair Yellen, I look forward to hearing your views on the economy and welcome the opportunity to discuss how to more effectively elevate the needs of the most vulnerable populations and promote a safe and sound financial system.