Powell: Opening Remarks

Economic activity in the manufacturing sector contracted in November for the ninth consecutive month, following a two-month expansion preceded by 26 straight months of contraction, say the nation's supply executives in the latest ISM® Manufacturing PMI® Report. The report was issued today by Susan Spence, MBA, Chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee. "The Manufacturing PMI® registered 48.2 percent in November, a 0.5-percentage point decrease compared to the reading of 48.7 percent in October. The overall economy continued in expansion for the 67th month after one month of contraction in April 2020. (A Manufacturing PMI® above 42.3 percent, over a period of time, generally indicates an expansion of the overall economy.) The New Orders Index contracted for a third straight month in November following one month of growth; the figure of 47.4 percent is 2 percentage points lower than the 49.4 percent recorded in October. The November reading of the Production Index (51.4 percent) is 3.2 percentage points higher than October's figure of 48.2 percent. The Prices Index remained in expansion (or 'increasing' territory), registering 58.5 percent, up 0.5 percentage point compared to the reading of 58 percent reported in October. The Backlog of Orders Index registered 44 percent, down 3.9 percentage points compared to the 47.9 percent recorded in October. The Employment Index registered 44 percent, down 2 percentage points from October's figure of 46 percent. US ISM Manufacturing Nov: 48.2 (est 49.0; prev 48.7) - Price Paid: 58.5 (est 57.5; prev 58.0) - New Orders: 47.4 (prev 49.4) - Employment: 44.0 (prev 46.0)

My testimony today will focus on two areas. First, the current state of the banking sector, as detailed in the fall 2025 Supervision and Regulation Report, which accompanies my submission to the Committee. Second, progress on my priorities as Vice Chair for Supervision since my confirmation earlier this year. My priorities relate to the efficiency, safety and soundness, and stability of our financial system and the effectiveness and accountability of our regulation and supervision of that system. The financial sector plays a critical role in our economy because it serves as an essential intermediary to channel savings into productive investments and enable the flow of money, credit, and capital throughout the economy. Our supervision and regulation must support a safe and sound banking system that fosters economic growth while also safeguarding financial stability. Banking Conditions Let me begin by providing an update on banking conditions. As the Supervision and Regulation Report shows, the banking system remains sound and resilient. Banks continue to report strong capital ratios and significant liquidity buffers, which position them well to support economic growth. The overall health of the banking sector is demonstrated by continued growth in lending, a decline in non-performing loans across most categories, and strong profitability. Notably though, nonbank financial institutions continue to increase their share of the total lending market, providing strong competition to regulated banks without facing the same capital, liquidity, and other prudential standards. Fed's Bowman: Working on capital and liquidity rules tied to Stablecoin Fed's Bowman: Nonbank firms increasing their share of the lending market.

BOE'S BAILEY SAYS DON'T KEEP HIGHER LEVELS OF CAPITAL THAN NEEDED BOE'S BAILEY SAYS GILT MARKET IS NOT UNUSUAL AMONG BOND MARKETS IN SEEING CHANGE IN STRUCTURE AND TRADING BANK OF ENGLAND'S BAILEY SAYS ASKED ON OBR LEAK, SAYS WE LOOKED VERY CLOSELY AT REPORT, BOE USES DIFFERENT RELEASE PROCEDURES BANK OF ENGLAND'S BAILEY SAYS WE DID NOT OVERDO THINGS ON BANK REGULATION AFTER GLOBAL FINANCIAL CRISIS, BUT WE LEARN FROM EXPERIENCE BANK OF ENGLAND'S BAILEY SAYS NOT FOR US TO COMMENT ON RELATION BETWEEN TREASURY AND OBR