MNI TRANSCRIPT: Powell on Economic Resilience

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

Federal Reserve Chairman Jerome Powell's press conference Wednesday:

     Q: What kind of steps could we take to help the economy as a whole, be more

resilient to this kind of exogenous shock?

     A: It's a extraordinary shock, unlike anything certainly that's happened in

my lifetime. 

     A couple things come to mind. I think the time will come for a careful

assessment of the answers to those questions. It's early to be asking them. We

are still putting out the fire. We are still trying to win. I think we will be

at that for a while. You know, but I'd point to a couple directions. 

     We worked hard to strengthen the banks much higher levels of capital

liquidity, far greater sense of what the risks are they are running and how to

manage them. The breakdowns that we have seen in market function have been in

the capital markets. I wouldn't rush in with regulation into the capital markets

and we did plenty of things, lot of reform in the capital markets, money market

reform, central clearing, all these important things, but there will no doubt be

with the size and force of this shock will no doubt reveal weaknesses in the

financial architecture, and we will have to go to work on those. I also think,

you know, it tells you the importance of getting your fiscal house in order. The

U.S. really hadn't gotten back to where we needed to get on fiscal policy. So we

have an already high level of debt to GDP and rising quickly, when the shock

arrived. Now we have the fiscal capacity to deal with it, I believe. But we will

need to ideally you would go into a unexpected shock like this with a much

stronger fiscal posture.

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

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