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Powell: there's a 'long way to go' to reach maximum employment

Yahoo Finance's Brian Cheung breaks down Fed Chair Jerome Powell's testimony before the House Financial Services Committee.

Video Transcript

ZACK GUZMAN: And interesting, as you point out, to kind of see that come in the backdrop of what we're hearing from Fed Chair Jerome Powell back in front of Congress again today. He was asked yesterday about Bitcoin and cryptocurrencies, what the Fed could be doing there. I want to bring on our own Brian Cheung, who's been watching all of this play out, as he's in front of the House today.

And Brian, it was interesting to see him respond to some of those interesting questions coming from congressmen and women. But today, a lot of the same messaging, I suppose, in terms of the Fed being more accommodative for longer.

BRIAN CHEUNG: Yeah, absolutely. And just to kind of maybe transition from the point you were just talking about on Bitcoin, no specific commentary from the-- effectively, the nation's top economists about where he thinks Bitcoin kind of plays a role in this economy. He's kind of tried to dodge that question before.

But he did talk about a digital dollar and maybe the opportunity for the Fed to further explore some sort of central bank-issued currency even this year, but said that there's still legal questions about whether or not the Fed has the authority to do that.

But yes, broadly speaking, the economic outlook from the Fed chairman mostly the same as exactly what he had told the Senate Banking Committee in his testimony yesterday. He said that they've been very specific in saying they're not going to lift off until they see conditions just right, but said that they haven't tried to be specific about asset purchases, their quantitative easing program. There could be some flexibility on that front.

But the need for accommodative policy, at least for right now, according to Jay Powell, is clear. They need to get the employment numbers back to where they were pre-pandemic. Here's what he told the House Financial Services Committee.

JEROME POWELL: If you include people who were in the labor force and, indeed, working in February and a couple of other adjustments, you get to almost a 10% unemployment rate. So there's a lot of slack in the labor market and a long way to go to maximum employment.

BRIAN CHEUNG: And this is all coming as a slew of other Fed officials are also set to speak today. In fact, Lael Brainard, Fed governor, is speaking at Harvard right now. She's talking about a pretty staggering statistic showing that if you were to disaggregate the overall unemployment rate, if you take the lowest wage quartile, the lowest wage quarter of the country, they're facing depression-era levels of unemployment, get this, at around 23%.

Something to really keep in mind with that K-shaped recovery. And there's also Fed Vice Chairman Richard Clarida set to speak later today. So a lot of Fed commentary coming this week, Zack and Akiko.