In this report, we assess the equality and regulatory aspects of Chairman Powell’s testimony today before Senate Banking.  Mr. Powell took strong criticism from Senate Banking Chairman Crapo (R-ID) about the continuing size of the FRB’s portfolio and from Sen. Toomey (R-PA) about any policy shift that permits the Fed to let inflation run “hot.”  While he assured Republicans that implementing EGRRCPA is the FRB’s “highest priority,” Chairman Crapo urged him to go beyond the tailoring (see FSM Reports SIFI30 and SIFI31) and CBLR (see FSM Report LEVERAGE16) proposals.  Chairman Crapo is focused particularly on stress-test relief for midsized BHCs and FBO tailoring.  Ranking Member Brown (D-OH) decried weak wage growth and demanded that the FRB get “creative” in combatting it.  Mr. Powell defended the FRB’s commitment to fulfilling its maximum employment goal.  Despite Mr. Powell’s assertions to the contrary, Sen. Warren (D-MA) suggested that the FRB’s review of the BB&T/SunTrust merger will be unfair.

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