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Expiries for Jul29 NY cut 1000ET (Source DTCC)

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Price Signal Summary - USD Faces Selling Pressure

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Schatz downside structures

     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 wanted to ask about financial stability risks. Recently the IMF and
some other global policy makers have been expressing concerns over the high
level of risky corporate debt. So as rates get lower in the U.S. and around the
world, are you more worried about financial stability risks and reach for yield?
     A: We monitor financial stability risk very carefully all the time. It is
what we do since the financial crisis. Currently we don't see large imbalances,
this long expansion is notable for the lack of large financial imbalances like
the ones we have seen certainly before the crisis happened. So we have a four
part framework I will quickly mention the first is lever arranging the financial
system which is low by historical standards. Second is funding risk which is the
risk of runible funding. And that risk is also quite low for banks but also for
the nonbanking financial sector. If you look at asset prices, we see some high
asset prices but not broadly across a range. We don't see bubbles and that kind
of thing. Then that leaves the fourth which is lever arranging the nonhousehold
sector. House holds we don't see leverage. We see them in good shape. Plenty of
households are not in great shape. But the -- that hooefs businesses. Leverage
among corporations and other forms of business private businesses is
historically high. We is have been monitoring it carefully and taking
appropriate steps. So that's what I would say. But it is corporate debt is one
part of a larger part of our framework. And it is something that we are paying
quite a bit of attention to and it has been part of the last couple of shared
national credit exams.
--MNI Washington Bureau; +1 202 371 2121; email: brooke.migdon@marketnews.com
[TOPICS: MMUFE$,M$U$$$]