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Fed Chair Powell faces questions on risk to housing market as people struggle to pay mortgage and rent

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Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell answer Minnesota Senator Tina Smith's questions on producing jobs.

Video Transcript

JULIE HYMAN: Tina Smith, Democrat of Minnesota, is asking questions. Let's listen back in.

TINA SMITH: --sector in our economy right now and what challenges you see ahead for us as we are living through this crisis. And I appreciate what you said. The most important policy objectives should be to keep people in their homes and keep them paying the bills.

JEROME POWELL: So these are longer-running problems which are, of course, under particular pressure right now. But as an example, a lot of the jobs are in big urban areas more and more. That's where the job creation is. You know, the cost of-- the cost of living in those places is higher and higher, very high. And often people who are in the service industries providing their services have to commute very long times to be able to afford to live in a place [INAUDIBLE].

So it's a-- you know, it's an issue that's been with us for a while. It's not one really that the Fed can affect much other than by affording, you know, fair lending laws and things like that. But we can't really directly affect those, but they are important to our economy.

TINA SMITH: Well, and I realize that you don't want to comment specifically on the specific policy issues that we have confronting us here in Congress, but in general, do you see a risk to the housing market as the economy continues to take a downturn in the months ahead?

JEROME POWELL: Well, I think there are multiple risks. One is just to the extent forbearance doesn't do the job, you may have people losing their homes. That's something-- given that this is a natural disaster in a way, that's something that it would be great to avoid.

You also see the housing industry coming, I wouldn't say to a halt, but under great pressure. Activity being slowly-- that's a lot of jobs right there. So I think, you know, really it comes down to sensibly, thoughtfully opening up the economy in a way that builds confidence and keeps people safe. I think that's really important that we do that well. And if we do, you know, these other things will take care of themselves over time.

This is a issue that I think we should continue to work on and talk about the challenges that people will have if they do lose their home. The ripple effect of people not being able to pay their rent or their mortgage and then the impact that that has all the way up through the housing continuum I think is a great concern. And if you don't have a safe place to live, then nothing else in your life works. I believe that this is something that's really important for us to address in the next package.

Thank you very much, Mr. Chair.