MNI: Powell Excerpt: Tariff Impact On Prices

     WASHINGTON (MN) - The following is a response of Federal Reserve Chairman

Jerome Powell to a question from a reporter at his press conference following

Wednesday's Federal Open Market Committee meeting.

     Question: Just to follow-up on the tariff question, you said earlier that

it seems the effects of the tariffs so far haven't quite materialized. 

Those weren't your words verbatim, but Wal-Mart, gap, Coca-Cola, general motors,

Macy's have all said that they expect the tariffs to effect the prices of

everyday consumer goods. My question is should there be an effect, when would

you expect to see that, and at what point do you start to become worried that

it's actually going to effect consumer spending and dampening economic growth? 

     Powell: It's a risk. You could see prices moving up. We don't see it yet,

but you could see retail prices moving up. The tariffs might provide a basis for

companies to raise prices in a world where they've been very reluctant and

unable to raise prices, where raising prices is very difficult with the ability

to shop on the Internet. 

     Again well, don't so it in the numbers, and, you know, until we see it in

the numbers, it's hard to say how one would react. The other question would be

if you are just talking about the effect on inflation, is it just a one-time

increase in the price level or is it actually fuelling higher inflation going

forward, and that's a real -- 

that's an important question in how we would think about the appropriate

response.

     Question: Is there a sense of timing in terms of when you might see that

kick in? The effect of.

     Powell: Don't see it yet, but you are hearing -- I mean, broadly across the

economy, it's not just tariffs. You are hearing --

we're hearing a lot of talk of labor shortages, of material costs in particular

industries. 

     We're hearing what amount to supply side constraints and things like that,

but we're not seeing it. We're seeing a sort of modest increase in wages. 

Inflation right around 2%. No sense of it moving up really. 

We're not seeing it yet. You know, we just aren't. We're watching very

carefully. 

--MNI Washington Bureau; +1 (973) 494-2611; email: harrison.clarke@marketnews.com

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