00:00Professor, what's a sock puppet?
00:04I heard the reference from Senator Warren.
00:06Yeah, what is it?
00:07I'm not sure I know.
00:08I think it's that thing you stick your hand in.
00:11Yeah, kind of like this?
00:12Yes.
00:13What's a human sock puppet?
00:15Isn't a human sock puppet somebody who will do what somebody else tells them to do?
00:21I think that's what the senator was trying to suggest.
00:24Are you going to be the president's human sock puppet?
00:28Senator, absolutely not.
00:30Are you going to be anybody's human sock puppet?
00:33No, I'm honored the president nominated me for the position,
00:36and I'll be an independent actor if confirmed as chairman of the Federal Reserve.
00:40My friend Senator Warren, and she has my friend, suggested that, I wrote it down,
00:47you will use your power, you might use your power to bail out your friends if they get in trouble,
00:53kind of like President Biden did with Silicon Valley Bank and Signature Bank.
00:58She didn't say the last part.
01:00I just did.
01:01Are you going to do that?
01:03No, Senator.
01:04Okay.
01:06The ethics folks, they've cleared you, but they've said you've got to sell some assets.
01:13Is that right?
01:14Yes, sir.
01:14Okay.
01:16And these assets that you have, you can't just hold a yard sale, can you?
01:22No, not for most of them, sir.
01:23Okay.
01:23So it takes a fair, a reasonable period of time, right?
01:28Yes, sir.
01:29And you've promised to sell them, right?
01:32I did.
01:33And if you don't sell them, we'll know and the ethics folks will know, right?
01:38Yes.
01:38I'd be in violation of the ethics agreement if I refuse to sell them.
01:41But you're going to sell them, right?
01:43Yes, Senator, I will.
01:44Okay.
01:45Can we agree that politicians have the right to offer you advice about what to do with interest rates?
01:57Senator, we can agree, and it's not something that I would shy away from.
02:01I've heard many senators from this very committee in years past express strong views on interest rates.
02:07Humble central bankers should be listening and then making their own decisions.
02:10Some, but some politicians matter more than others.
02:14And generally speaking, presidents matter, their opinion matters more than, say, a senator.
02:24President Trump has offered his opinion about what you ought to do with interest rates.
02:28Is that right?
02:29Senator, he has not made his opinion on that a secret to anybody.
02:33Yeah, and every president has that you're aware of.
02:40Yes, and they all tend to be in the same direction, Senator Kennedy.
02:43Okay.
02:44Now, the problem is, can we agree that your credibility as Fed chairman is the most important thing you have?
02:52It's the most important thing to me, it's the most important thing to the institution,
02:56and it's the most important thing to the successful conduct of policy.
02:59Okay.
02:59If the markets think the change.
03:01That's a yes, right?
03:01Yes, Senator.
03:02Okay.
03:04The problem is that President Trump has said he's not going to appoint anybody who wouldn't agree to lower interest
03:11rates.
03:13Have you agreed with the president that you're going to lower interest rates?
03:17Senator, I'm glad you framed it that way.
03:20The president never asked me to predetermine, commit, fix, decide on any interest rate decision in any of our discussions,
03:31nor would I ever agree to do so.
03:33So the president has never sat you down, looked you in the eye, and said,
03:37here's the deal, Scooter, I'm going to appoint you.
03:41But you've got to agree to lower interest rates.
03:43That didn't happen, or did happen?
03:45The president never once asked me to commit to any particular interest rate decision, period,
03:53and nor would I ever agree to do so if he had, but he never did.
03:57I was honored he nominated me.
03:59Like everyone else in the committee in the world, I've heard his view on interest rates.
04:04It sounded very similar to me to every other president in economic history that I've studied.
04:08Okay, I've got one more question because I'm about to run out of my parliamentary inquiry time.
04:18I've heard your argument the last few months about artificial intelligence has made us so productive,
04:27labor so productive that companies don't have to raise prices.
04:33Therefore, inflation isn't a problem.
04:37Therefore, rates can be cut.
04:39Do you really believe that right now?
04:41No, that is not how I would characterize the story on AI.
04:45Okay, but you've said what I just said, haven't you?
04:48I have said that this is the most disruptive moment in modern economic history in the U.S. and the
04:56world.
04:56I've said that artificial intelligence, AI, short for American history.
05:01Okay, let me stop you because the chair is going to cut me off.
05:03Oops, sorry.
05:04Here's my worry that a lot of this stuff about artificial intelligence making us more productive
05:10is a bunch of hype by people who want to sell stock in an IPO.
05:14Okay, I'd be careful there.
05:16Thank you, Mr. Chairman.
05:19I'll get to my five minutes in a little bit.
05:23You come back about midnight, sir.
05:25We'll go ahead and start it all over again.
05:27Brand new day, sir.
05:28Brand new day.
05:29Thank you for your patience.
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