Federal Reserve Chair Jerome Powell has run the U.S. central bank for the last four years, but his most significant work may have come in the past two years during the COVID-19 pandemic. President Joe Biden recently nominated Powell to a second term helming the Fed. The Senate Banking Committee will question the bank regulator on Tuesday. They will likely focus on current economic issues like inflation and unemployment, but questions about stablecoin regulation, central bank digital currencies and others may come up.

11:53 a.m. (LL) Sen. Cynthia Lummis (R-Wyo.) opened her time by asking Powell to “please throw me a lifeline here and help me support your nomination.”

“As you know Chairman Powell I’m terribly concerned about the manner in which Wyoming’s Special Purpose depository institutions are being treated by the Federal Reserve, we’ve discussed,” Lummis said.

Powell told Lummis that he believes there are “good arguments for for viewing SPDs as depository institutions for this purpose” and that the Fed would be considering the issue, but that the consideration would take time.

“I think you do understand that we, you know, we started granting these. There’ll be a couple hundred of them pretty quickly, and we have to think about the broader safety and soundness implications. And you know, it’s just hugely presidential, that’s really why we take our time with it,” Powell told Lummis.

11:42 a.m. (LL) Powell was asked if the Fed had considered actively selling securities rather than letting them gradually run off the balance sheet. Powell said the Fed has not made any decisions.

11:42 a.m. (CL) Sen. Chris Van Hollen (D-Maryland) asked Powell whether he’s ever embellished his resume or publication history. Powell said “I don’t think so.”

11:38 a.m. (LL) Hearing proceedings have been slow. Warren complained about corporate profits, Kennedy complained about government spending.

11:05 a.m. (CL) Sen. Tester asked Powell to provide an overview of the pandemic pre- and post-pandemic. Powell said that pre-pandemic the labor market was “great.”

”So then the pandemic comes in, it updates everything. And so the question really is, what are things going to how’s it going to be different? And we’re only beginning to see that because we’re not out of the pandemic.”

10:53 a.m. (ND) Sen. Mike Crapo (R-Idaho) asks the question that’s been on all of our minds: Where’s the Fed’s digital currency report?

Powell says “the report really is ready to go and I would expect we will drop it, I hate to say it again, in the coming weeks, but it really is in a situation where it’s ready to go … it was hard to– we didn’t get it quite to where we needed to get it but it’s effectively there now and I will tell you it’s, we’re, you know, it’s within weeks we will be publishing it. And by the way, it’s more going to be an exercise in asking questions and seeking input from the public rather than taking a lot of positions on various issues, although we do take some positions.”

10:42 a.m. (LL) “Price stability is half our mandate,” Powell says. “There’s no basis in the law for preferring maximum employment and price stability, or vice versa. They’re equal. However, at different times, One of them is farther away from its goal, and that’s the one we need to focus on a little bit more. Sometimes that’s maximum employment. Sometimes it’s inflation. I’d say now it’s inflation.”

10:40 a.m. (CL) Powell blames overbuying of durable goods for supply chain issues: ”this really is a problem both have very strong elevated demand, particularly in a part of the economy, the goods sector, the durable goods sector, things like washing machines and cars and all the things that people bought during the support of the pandemic, when they couldn’t spend money on travel and services. That’s where there’s spending is running at a level 20% about where it was before the pandemic and it’s just kind of overwhelmed the supply chains, most of which are global,” Powell says.

10:39 a.m. (LL) It’s a long road to normal: “if you look back through history there are times when when wages have moved up in a way that has fostered persistent inflation and that hurts everyone. It particularly hurts people on fixed incomes. So we don’t see that right now. But we do see these are the biggest wage increases in decades. And so we’re watching carefully and you know, to the extent we are looking at this year, what we see is an economy that where the labor market is recovering incredibly rapidly, really beginning around the end of the middle of last year that the unemployment rates have been dropping it more than three tenths of a percent per month, since since last June,” Powell says.

10:38 a.m. (CL) Powell says inflation remains well above the Fed’s target, which “is telling us that the economy no longer needs or wants the very highly accommodative policies that we’ve had in place.”

10:36 a.m. (CL) Powell saying low interest rates aren’t going anywhere is an interesting tidbit – the actual quote is “We have been and probably remain in an era of very low interest rates,” which was particularly interesting.

10:32 a.m. (LL) Powell said the Fed might raise interest rates depending on inflation in response to a question from Toomey: “if we see inflation persisting at high levels longer than expected, then then we will you know, then we’ll, if we have to raise interest rates more over time, we will we will use our tools to get inflation back.”

10:27 a.m. (LL) “What we saw at the end of last very long, longest in our history expansion was that as the labor market tightened, the benefits began to go more broadly to those at the lower end of the income spectrum and to groups that have been more marginalized from an economic standpoint. And that’s that was seen, I think, very broadly as a highly desirable set of outcomes. So our tools do not generally have direct distributional effects, but I do think that we see now, the great benefits that strong labor market can bring to right across the whole population and for the whole economy,” Powell said.

10:25 a.m. (LL) Powell, in his opening remarks, highlighted the economy’s current strength: “We know that high inflation exacts a toll particularly for those less able to meet the higher costs of essentials like food, housing, transportation. We are strongly committed to achieving our statutory goals of maximum employment and price. We will use our tools to support the economy and a strong labor market and to prevent higher inflation from the entrenched. We can begin to see that the post pandemic economy is likely to be different in some respects. on the pursuit of our goals, we’ll need to take those differences into account.”

10:20 a.m. (LL) Sen. Pat Toomey (R-Pa.), the ranking member on the committee, opened his remarks noting the bipartisan support for Powell and the work he did in stabilizing the financial system during the pandemic. He also said the Fed is fighting the “last war” and expressed concerns about the current level of inflation.

“The Fed does not have a mandate to advance politically charged causes that are irrelevant to its mandate, like global warming or advancing so called racial justice,” Toomey said.

10:10 a.m. (ND) Sen. Sherrod Brown (D-Ohio), the Banking Committee’s chair, praised Powell in his opening remarks, discussing his work, as well as the role of the economy in supporting Americans. And there actually was a pretty significant crypto mention right up top: A warning that cryptos and stablecoins might be a risk to the U.S. economy.

“The Fed needs to take seriously the systemic risks that threaten our economic progress, like cryptocurrencies and stablecoins and most importantly, climate change,” Brown said, later adding that crypto bubbles are like risky Wall Street schemes.

10:00 a.m. (ND) This hearing is about to kick off. In his introductory remarks, released Monday, Powell discussed the Fed’s COVID response and financial stability, among other issues.