MNI TRANSCRIPT: Powell on Balance Sheets

     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:  I'm curious on your balance sheet point.  You talked about the

committee thinking about resuming organic growth, you know... over time.  I

guess the question is... if you have shrunk your balance sheet maybe a little

too small to the point that reserves are too scarce to get through usual

periods, is organic growth in the balance sheet enough to get to a point of

ample reserves that can get us through tough times or would you need to see

something above that and is that a possibility the committee would consider?  

     A: I think it's hard to deal with every hypothetical possibility.  I think

for the foreseeable future, we're going to be looking at, if needed, doing the

sorts of things we did the last two days.  These temporary open market

operations.  That'll be the tool we use.  The question will be... as we go

through quarter-end, as we learn more, you know... how much of this really has

to do with the level of reserves?  And I think we'll learn quite a lot the next

six weeks. 

--MNI Washington Bureau; +1 202 371 2121; email: alexandra.kelley@marketnews.com

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