"The level to which we raise rates is a separate question from the speed at which we move," Federal Reserve Chair Jerome Powell said Wednesday in explaining the central bank's decision to pause rate hikes at its June meeting. It may "make sense" for the Fed to raise rates at a "more moderate pace" than it has in the past 15 months, he said. Earlier, Powell in his statement repeated the expectation that rates will rise more this year . "Regulations should be transparent, consistent and not too volatile," Powell said in his semi-annual monetary policy testimony at the House of Representatives when asked about his thinking in terms of evaluating capital requirements on banks. The Fed will look at what levels of capital increases would be justified, he said. There's a question of "weighing and balancing" costs of increasing capital requirements. Still, the central bank needs to make sure Fed rule changes avoid hurting small banks. 10:54 AM ET: "Gradually, businesses are reporting they're better able to find workers," but the labor market is still very tight, he said. There's still a large gap between number of job openings and the number of workers available to fill them: ~1.6-1.7 job openings per worker available, down from 2 job openings per worker about two years ago. 10:49 AM ET: Powell declined to comment on whether he thinks banks' capital requirements need to be increased. He's waiting to see what the Fed review's proposals are. 10:47 AM ET: "We need to update" the Fed's approach to liquidity issues, he said. The Silicon Valley Bank, Signature Bank, and First Republic Bank failures were all partly a result of liquidity issues, he said. "Liquidity regulations" weren't strong enough, he added. 10:44 AM ET: In discussing the mid-sized regional banks that failed earlier this year, there needs to be "stronger supervision" for banks of "this size," he said. 10:40 AM ET: Republican representatives question Powell about the Fed's "so-called holistic" review of banks' capital requirements. Powell said the biggest U.S. banks are "very strongly capitalized," are competitive globally, and are near the top of the league tables. 10:36 AM ET: The Fed should have a strong role in regulating stablecoins, Powell said. "We do see payment stablecoins as a form of money." Developing... check back for updates. Dear readers : We recognize that politics often intersects with the financial news of the day, so we invite you to click here to join the separate political discussion.
