MNI TRANSCRIPT: Powell on Fed Resources

     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: Given that inflation, whichever measure you choose has either remained

where it is or not increased over the past year, as you have been dropping the

policy rate, what is it that gives you confidence that the fed has the tools to

get inflation back up to target, or even overshoot as you just indicated that

some people are considering doing?

     A: Well, it's just that there is still empirically by many different, by

the work of many different analysts, there is a relationship between resource

utilization by which I mean unemployment and inflation. It is just relatively

weak. By the way, that is not a bad thing. That means that we can run at low

levels of unemployment and have an historically good in some dimensions labor

market without having to worry about inflation. It also means though that it's

not easy to move inflation up. You say why is there confidence, I would say

there is more humility than there is confidence in this at this point. It has

been very challenging to get inflation to be at target. If you look around the

world, the United States of all major economies has been closest to it. But

still hasn't quite been able to achieve it. I would point out that this year,

which has been a good year for the economy, inflation, core inflation is running

at 1.6 percent, whereas it ranked close to 2 percent most of last year. It's a

real challenge. But I think we are using our tools as best we can to meet that

challenge.

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

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