MNI TRANSCRIPT: Powell: Goal Is for FFR "Well Within" Range

     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: As recently as 2018, interest on excess reserves was at the top of the

band, sort of dragging the Fed Funds Rate up. Over the course of the adjustment

since last year, it's moved steadily down closer to the bottom of the band, so

if you're moving it back up, how high do you want to get it? Are we looking to

get interest on excess reserves at the top of the band again as the Fed Fund

Rate moves to the middle of the band? And should we see movements in IOER as

indicator that we're approaching ample?

     A: our stated goal is to keep IOER and Federal Funds rate well within the

range, that's it, well within the range, and that clearly, 5 basis points from

the bottom or top isn't that, so that's why we moved back up. You're right, last

year we were -- we saw some tightness as reserves were draining out of the

system, we saw the gradually moving up, and in hindsight we know what was

happening. With ample reserves, we see that it's possible to bring the interest

on reserves rate up to 10 basis points, so now we are well within the range, I

would say.

     Q: You don't think as fed funds go up to toward the center that IOER is

going to end up at the top?

     A: Don't know that. We want it to be well within the range. We'll continue

to adjust it to the extent appropriate. Ultimately what we're trying to do is

deliver a Federal Funds Rate well within the range and IOER is just a tool to

do, that and if we need to make changes to keep it well within the range, we'll

do that. The thing that matters for the economy is that we keep the Federal

Funds Rate, which is the rate that of course transmits into other money market

rates which ultimately transmits into all kinds of financial conditions, that's

what we care about. So ultimately, we will use that tool to keep it well within

the range.

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

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