MNI TRANSCRIPT: Powell: Framework Review Done by Mid-year

     WASHINGTON (MNI) - The following is the portion of a transcript from

Federal Reserve Chairman Jerome Powell's press conference after the FOMC meeting

Wednesday:

     Q: In terms of the review on Chris' question earlier, there was a general

feeling now in the markets and among analysts that you're basically setting us

up for some form of inflation target averaging where you let the inflation rate

run above the 2% target for some time to make up for the time that it is spent

below that. Is that a fair or reasonable assessment of where you think you're

going to end up? What would you, Chairman Powell, think of that idea personally

and as long as I'm asking, do you have any more details on when we can expect

the results of the review?

     A: I'll just say that we undertook the review because we felt and I felt

that it was time to incorporate the realities of what we could call the new

normal into our policy framework, and some aspects of that new normal would

include ongoing powerful, global disinflationary trends which have led to lower

than target inflation many places in the world. Secondly, a flat Phillips curve

by which I means low levels of sensitivity of inflation to resource utilization,

for example, low unemployment. And thirdly, a much lower neutral real interest

rate here and around the world. So, those are challenging conditions for

monetary policy to deliver on our statutory goals of maximum employment and

stable prices; although, I would say that under our existing framework, we've

been able to succeed or get close to succeeding most of the time lately to

achieve those goals, although we do struggle as other central banks do with the

inflation goal. So this is about reviewing our strategy, tools, and

communications to assure that they're the best that we can do to achieve those

goals in this environment on a sustained basis. And we continued our discussions

at this meeting. I'm very, very pleased at the process so far. It's included the

14Fed Listen events around the country which we engaged with a full range of

people and groups across American Society and this was a very, very positive

experience and I think we learned a lot. We now had a series of a number of FOMC

meetings where we reviewed what we learned and dug into strategies and I expect

to conclude the review and announce the conclusions around the middle of the

year. Right now we're just at the point of coming together to put all of that

together, so I think I'm not the person who should be telling you my personal

preferences right now. I'm trying to, and we're trying to come together as a

group around a set of answers. I feel very positive that we're going to come up

with some good results and I'm just going to have to wait until we get to that

point to announce them.

--MNI Washington Bureau; +86 (10) 8532-5998; email: ryan.hauser@marketnews.com

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